Brokers with volatility index products, such asthe CBOE VIX 75, allow investors to measure risk or fear within a market and to capitalise on the resulting profit potential. Here, we list the best brokers with volatility indexes alongside detailed reviews. Find out how to trade volatility indices today.
VIX Brokers
Pepperstone
Pepperstone offers spread betting and CFD trading to both retail and professional traders. Clients can trade FX, indices, commodities and shares on MT4, MT5 and cTrader platforms.
CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs.
XTB is one of the largest stock exchange-listed FX & CFD brokers in the world, offering access to over 2100 instruments on their xStation platform.
81% of retail accounts lose money.
CMC Markets
CMC Markets is headquartered in London and listed on the LSE (FCA Regulated). It offers competitive spreads on a global range of assets via its Next Generation platform.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% (April-June 2022) of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
What Is A Volatility Index?
Volatility indexes are real-time stock market indicators showing expected volatility over a certain period of time. Investors use them to gauge market sentiment and to capitalise on potential price swings.
You may have come across brokers with the Volatility 75 Index before (traded with the ticker symbol: VIX). The VIX is part of the Chicago Board Options Exchange (CBOE) and is the most established index for quantifying predictions of volatility. The index shows the implied volatility of the S&P 500 (SPX) basket of 500 weighted US stock options over the next 30-day period. Many of the top brokers with volatility index instruments offer this product.
If the value of the VIX index increases, it typically means that the S&P 500 is falling and vice versa. You can check out a live Volatility 75 (VIX) chart on TradingView now, to see how the market is moving today. We’ve also covered how to trade the Volatility 75 Index in detail here.
There are other volatility indexes available to trade too, including the EU Index (VSTOXX) which is the best volatility benchmark in Europe. Alternatively, India’s volatility gauge is based on the option price of the NIFTY Index. Other popular indices include the CBOE Gold (GVZ), the FTSE 100 VIX (VFTSE) and the NASDAQ 100 Volatility (VXN).
For those who prefer quieter markets, there’s also the S&P 500 Low Volatility Index, which measures the performance of the 100 least volatile stocks in the S&P 500. You can check out the historical data and methodology on the S&P Global website. We’ve also listed brokers with volatility index products on the S&P 500 above.
Synthetic indices are simulated markets that are not affected by world events and news. Nonetheless, they do act like real monetary markets and are based on a cryptographic random number generator. These indices are also audited by an independent third-party so that they cannot be manipulated.
Within the synthetic index market, there are three states to be aware of: Trend Higher (where prices rebound into a bullish direction), Trend Lower (where ‘up’ moves are sold off and the market moves into a bearish direction) and Sideways Range (where little movement occurs in either range). Traders should look out for brokers that allow them to trade range markets as well as bullish and bearish.
Pros Of Brokers With Volatility Indexes
As volatility increases, the potential to make more money follows. Investing in volatility indices means capitalising on this. Brokers with volatility index instruments offer access to an interesting and less common asset, helping to diversify portfolios.
Brokers with volatility indexes are also incredibly useful when attempting to understanding whether markets have reached extreme positions, in either direction. With this being said, there are certain limitations that we’ve detailed below.
Cons Of Brokers With Volatility Indexes
Arguably, a volatility index reveals little more than what is already accessible. Much is already shown in the past and current performance of the S&P 500 Index, for example. The daily changes in the VIX show what has happened and what is happening now. But, as all traders will know – past performance is not a guarantee of future trends. Therefore, there is the risk that brokers with volatility indexes offer limited additional insights.
Plus, daily fluctuations are a challenge to keep up with. The regular evaluations of a volatility index can be repetitive and breathless, relying upon this takes up a large amount of time, with the reward unpredictable.
A common occurrence in investing is when too much attention is paid to a short term number, rather than the bigger picture, which could be the case here. Day-to-day, there is limited benefit in monitoring the VIX, but on a month-to-month basis, you might gain much more.
Best Brokers With Volatility Indexes
Brokers with a volatility index are few and far between. So, we’ve detailed thetop 4 forex brokers offering the Volatility 75 Index and other relevant indices.
Deriv – Using Synthetic Indices And The VIX
Derivis one of the market-leading brokers with volatility index instruments, offering synthetic volatility indices alongside the VIX 75. It provides access to high leverage, tight spreads and a selection of two powerful platforms. There are 10 volatility index instruments available across margin trading, options or multipliers, allowing you to utilise almost any strategy.
Plus, Deriv is known for its fast order execution and deep liquidity, making it ideal for small and large traders.
Instruments
Deriv’s volatility indices correspond to simulated markets, with constant volatilities of 10%, 25%, 50%, 75% and 100%. You can choose between different tick speeds, generated either every two seconds for indices 10, 25, 50, 75 and 100, or every one second for indices 10 (1s), 25 (1s), 50 (1s), 75 (1s) and 100 (1s)
It also offers a range of other synthetic indices, including ‘crash’ and ‘boom’ (500 and 1000), step indices, and range break indices (100 and 200)
Plus, you can trade and profit from range markets as well as trend higher and lower
Accounts
With the Synthetic Indices EUR account, investors can trade contracts for difference (CFDs) on synthetic index instruments that replicate real-world movements. The account offers up to 1:1000 leverage, with fixed or variable spreads and market execution
Deriv is also one of the few brokers with volatility index instruments that offers a free demo solution for clients to practice trading strategies. Traders enjoy unlimited virtual funds for as long as needed, which is ideal for beginners looking to try out these exciting markets
Platforms
Positions are executed on the DTrader or MT5 platforms
DTrader offers trading directly from charts with a real-time price feed for Rise (up) and Fall (down), among others. Arguably, there’s greater control with DTrader because traders can choose the volatility rate and the contract length. You can also open multiple index trades simultaneously, providing flexibility
MT5 allows leveraged CFD investing using technical indicators and tools alongside a selection of plugins, signals and bots. There is a number of pending order limits, plus, you can program your own robots using DBot, the broker’s own programming tool
To get started,register for a Synthetic Indices account and set up your platform password through the website, you can begin investing straight away
Fees & Payments
Deriv clients enjoy zero commissions and no minimum deposit in the Synthetic Indices account. Depending on the payment method chosen, there may be a minimum deposit or withdrawal amount. Some methods may also involve a transaction fee
The broker also offers low-pip spreads on CFDs and a useful calculator for margin and swaps on the website. These help you to estimate the costs of keeping positions open overnight
IC Markets – Using The VIX
IC Markets offer two types of accounts, a Standard solution and a Raw Spread account (which is their market-leading option)
There’s no commission on the Standard account, but there is a mark-up applied to the spread of 1 pip above the raw inter-bank rate from their liquidity providers. This is a competitive rate vs alternative brokers with volatility indexes.
Raw Spread accounts show raw inter-bank spreads received from liquidity providers. There is a commission charge of $7 per standard round turn
To open an account with IC Markets, simply click on the “Open a Live Account” link on their website and complete your application form
Once your online application form has been approved by their client team, you will be emailed your account login details and password, and then you’re ready to go
Pepperstone – Using The VIX
One of the best all-round brokers with volatility index products
Pepperstone offers both demo and live accounts
Demo accounts automatically expire after 30 days but can be changed to a live account
There’s a selection of three platforms for volatility index trading: MT4, MT5 and cTrader
They recommend an initial deposit of £500 to trade, but this is not a requirement
To open a live account, just visit the homepage, select ‘Live Account’, then ‘Open a Live Trading Account’
It will take about 10 minutes to complete the set-up process
You’ll be prompted to complete an onboarding quiz and provide your account opening ID documents
Once they have verified your documents, they’ll send through your login information
IFC Markets – Using The USVIX
There are no fees to open an IFC Markets account
Commission is charged for opening and closing positions on stock CFDs. This varies depending on the stock exchange – starting at 0.1% of the position volume
You can only have one of each type of account, either: real or demo, one platform, account type (Beginner, Micro, Standard Fixed/Floating), currency, netting or hedged
Opening an account is quick, easy and free. You just need to register to open an account using the broker’s website
Final Word On Brokers With Volatility Index
Brokers with volatility indexes provide traders with an asset class that is unrivalled by your traditional forex brokers. Therefore, they’re a popular option for those looking to branch out to new instruments.
When trading in a volatile market, there are a number of ways to stay ahead of the game. Sentiment plays a large part in many strategies for stock markets, so with this in mind, a volatility index is useful. With that being said, an index still has its limitations and is far from perfect. It is at the trader’s discretion to decide how much to rely on its insights.
FAQs
How Is The Volatility Index Calculated?
The CBOE Options Exchange (CBOE Options) calculates the VIX Index using standard SPX options and weekly SPX options. Standard SPX options expire on the third Friday of each month and weekly SPX options expire on all other Fridays. Only SPX options with more than 23 days and less than 37 days to the Friday SPX expiration are used. These are then weighted to yield a constant maturity 30-day measure of the expected volatility of the S&P 500 Index. Brokers with volatility index instruments may offer products on various major exchanges.
How Is Implied Volatility Different From Actual Volatility?
Rather than measuring realised or historical volatility of the S&P 500, the VIX projects its implied or expected volatility 30 days in the future. Implied volatility is a prediction only. It’s important to note brokers with volatility index products should have appropriate risk warnings on their website.
Why Is The Volatility Index Sometimes Referred To As The “Fear Gauge”?
The media and brokers with volatility index instruments often refer to the VIX as a “fear gauge” since it is a measure of investor sentiment. The VIX tends to rise as investors perceive a higher likelihood of prices declining, and so it is a good predictor of market-wide concern.
When Is A Good Time to Trade Volatility Index 75?
The best time to trade the Volatility Index 75 is when the price reacts to previous support or resistance levels. Results from research on the best time to trade Volatility 75 indicate that major trend reversals, range breakouts and price jumps happen around the 11:00 GMT and 23:00 GMT. We’ve listed some of the best brokers with volatility index assets in our guide above.
Instead, the only way investors can access the VIX is through futures contracts and through exchange-traded funds (ETFs) and exchange-traded notes (ETNs) that own those futures contracts.
Instead, the only way investors can access the VIX is through futures contracts and through exchange-traded funds (ETFs) and exchange-traded notes (ETNs) that own those futures contracts.
The primary way to trade on VIX is to buy exchange-traded funds (ETFs), and exchange-traded notes (ETNs) tied to VIX itself. ETFs and ETNs related to the VIX include the iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) and the ProShares Short VIX Short-Term Futures ETF (SVXY).
The best broker for synthetic indices is Deriv. Formerly known as Binary, Deriv is a forex broker with over 22 years experience in the Forex market, and over 2.5 million registered forex traders.
And for the advanced retail trader set, there are tradable products such as VIX futures (available on the thinkorswim® platform from TD Ameritrade) that can help to further level the playing field between retail and professional traders.
How to trade the VIX? There is no way to invest directly in the VIX, but there are securities that you can invest in that aim to mimic the VIX. First, there are futures contracts. Traders can buy futures contracts based on the VIX.
VIX (CBOE Volatility Index) can theoretically reach any value from zero to positive infinite. It can not be negative, but there it no theoretical limit on the upside. VIX can definitely go over 100.
The Bottom Line. Investors interested in the VIX ETF space should consider investing for a short period of perhaps a day. Many of these products are highly liquid, offering excellent opportunities for speculation. VIX ETFs are highly risky, but when traded carefully, they can prove to be lucrative.
Theoretically, VIX oscillates between 15 and 35. Any value around or below 15 represents low volatility against values higher than 35, which indicate high fluctuations in the market.
When you see volatility is high and starting to drop you need to switch your option strategy to selling options. The high volatility will keep your option price elevated and it will quickly drop as volatility begins to drop. Our favorite strategy is the iron condor followed by short strangles and straddles.
Like all indices, the VIX cannot be bought directly. However, the VIX can be traded through futures contracts and exchange traded funds (ETFs) and exchange traded notes (ETNs) that own these futures contracts.
Webull is honored to become a strategic partner with Cboe® to improve user experience by providing premier options market data such as SPX®, XSP, and the Cboe Volatility Index® (VIX® Index).
"If the VIX is high, it's time to buy" tells us that market participants are too bearish and implied volatility has reached capacity. This means the market will likely turn bullish and implied volatility will likely move back toward the mean.
Options on the VIX are european-style, which means they can't be exercised until the expiration date. Additionally, they're cash-settled, as the VIX doesn't have tradable shares that can be purchased or sold by exercising.
Another way to approach trading options in a low VIX environment is through debit spreads. A vertical spread involves buying an option at one strike price while simultaneously selling another option at a different strike price but within the same expiration month.
ProShares Ultra VIX Short-Term Futures ETF provides leveraged exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration.
United States - CBOE Volatility : VIX was 16.94000 Index in May of 2023, according to the United States Federal Reserve. Historically, United States - CBOE Volatility : VIX reached a record high of 82.69000 in March of 2020 and a record low of 9.14000 in November of 2017.
In the real world, traders stay in VIX ETFs for 1 day, not 1 year. VIX ETFs are emphatically short-term tactical tools used by traders. Products like VXX, an exchange-traded note (ETN), are incredibly liquid, often trading more than their total assets under management, or AUM, in 1 or 2 days of trading.
ViX is dropping the plus sign from its branding. Henceforward, its free streaming tier will continue to be styled “ViX,” while its paid subscription tier will be named “ViX Premium.” There will be no discontinuation of either tier, and the content offerings on the two plans will remain the same.
In general, VIX values of greater than 30 are considered to signal heightened volatility from increased uncertainty, risk and investor fear. VIX values below 20 generally correspond to more stable, less stressful periods in the markets.
A VIX level above 20 is typically considered “high.” A VIX below 12 is typically considered “low.” Anything in between 12 and 20 is considered “normal.”
The difference between the VIX and the VXX is that the VXX is an ETN (exchange-traded note) that tracks the performance of a basket of VIX futures contracts. On the other hand, the VIX index is a theoretical construct that reflects the market's expectations of future volatility and cannot be bought or sold directly.
In general, VIX values of greater than 30 are considered to signal heightened volatility from increased uncertainty, risk and investor fear. VIX values below 20 generally correspond to more stable, less stressful periods in the markets.
Commodities. Commodities are typically more volatile than currency and equity markets due to the lower levels of liquidity or trading volume than other asset classes, as well as the constant exposure to weather events and other production issues that might affect supply and demand.
There are two ways to use the VIX in this manner: The first is to look at the actual level of the VIX to determine its stock-market implications. Another approach involves looking at ratios comparing the current level to the long-term moving average of the VIX.
The performance of the VIX is inversely related to the S&P 500 – when the price of the VIX goes up, the price of the S&P 500 usually goes down. If the VIX is rising, demand for options is increasing, and therefore, becoming more expensive. If the VIX is falling, there's less demand, and options prices tend to fall.
The VIX index measures volatility by tracking trading in S&P 500 options. Large institutional investors hedge their portfolios using S&P 500 options to position themselves as winners whether the market goes up or down, and the VIX index follows these trades to gauge market volatility.
The three most widely followed indexes in the U.S. are the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite. The Wilshire 5000 includes all the stocks from the U.S. stock market.
Top of our list of the best indices for trading is the US Standard & Poor's 500 Index (known as S&P 500). It is based on the market cap of the largest 500 companies listed on the NYSE or the NASDAQ. Because of its diversity, this index is one of the most traded stock indices. Its movements are widely followed.
Commodities, index, Treasury—you can trade all that and more. Use this interactive table to get the lowdown on every futures product currently available through TD Ameritrade.
1. Paul Tudor Jones (1954–Present) The founder of Tudor Investment Corporation, a $11.2 billion hedge fund, Paul Tudor Jones made his fortune shorting the 1987 stock market crash.
The covered call strategy is one of the safest options strategies that you can execute. In theory, this strategy requires an investor to purchase actual shares of a company (at least 100 shares) while concurrently selling a call option.
The Cboe Volatility Index (VIX) is often considered to be a gauge of investor uncertainty. Learn how to trade the VIX with tips found in this guide. By Jayanthi Gopalakrishnan May 2, 2023 5 min read. 5 min read. Photo by TD Ameritrade.
When the VIX is low, volatility is low. When the VIX is high volatility is high, which is usually accompanied by market fear. Buying when the VIX is high and selling when it is low is a strategy, but one that needs to be considered against other factors and indicators.
VIX of 13-19: This range is considered to be normal and volatility over the next 30 days when the VIX is at this level would be expected to be normal. VIX of 20 or higher: When the VIX gets to be above 20, you can expect volatility to be higher than normal over the next 30 days.
A VIX level above 20 is typically considered “high.” A VIX below 12 is typically considered “low.” Anything in between 12 and 20 is considered “normal.”
Simply put, VIX measures the expectation of stock-market volatility as communicated by options prices. Rather than measuring “realized” or historical volatility, VIX projects “implied” or expected volatility–specifically 30 days in the future–by measuring changes in the prices of options on the S&P 500.
What's the difference between ViX and ViX+? ViX is a free service that offers more than 100 channels, thousands of your favorite movies, series, soap operas, live sports from the best soccer leagues, and 24/7 news. ViX+ gives you all 40,000 hours of content ViX has to offer, plus over 10,000 hours of premium content.
Some of the most commonly used tools to gauge relative levels of volatility are the Cboe Volatility Index (VIX), the average true range (ATR), and Bollinger Bands®.
What is the Volatility 75? The Volatility Index (VIX) is widely considered the foremost indicator of stock market volatility and investor sentiment. It is a measure of the market's expectation of near term volatility of the prices of US 500 stock index options.
Introduction: My name is Kareem Mueller DO, I am a vivacious, super, thoughtful, excited, handsome, beautiful, combative person who loves writing and wants to share my knowledge and understanding with you.
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