Term of the Day: VIX Option

TERM OF THE DAY - NOVEMBER 2, 2011 Add Investopedia to Safe Sender List Find Investopedia on VIX Option What Does it Mean? A type of non-equity option that uses the CBOE Volatility Index as the underlying asset. This is the first exchange-traded option that gives individual investors the ability to trade market volatility. Trading VIX options can be a useful tool for investors wanting to hedge their portfolios against sudden market declines, as well as to speculate on future moves in volatility. Investopedia Says... A trader who believes that market volatility will increase now has the ability to profit on this outlook by purchasing VIX call options. Sharp increases in volatility... Read more » TODAY'S NEWSLETTER IS SPONSORED BY: Slideshow - 6 Ways To Make Better Options Trades Learn how to make better options trades with the average monthly range.  View the Slideshow » Special Feature - Technical Analysis Do you prefer analyzing charts rather than financial statements? Technical analysis does just that. Click here for more. Related Terms Bull Call Spread Butterfly Spread Call Option Hedge Index Option See More » Related Links Introducing The VIX Options Volatility - The Birth Of A New Asset Class Getting a VIX on Market Direction See More » Find Term Of The day Useful? Check out our other FREE newsletters! Stock Watch Weekly Forex Weekly News To Use Warren Buffett Watch Investing Basics The Chart Advisor Report Professionals in the Money You are currently subscribed to term-of-the-day as: newsforward@autoforextradingpro.com To unsubscribe or change your email settings, please click here. Copyright © 2011 - All rights reserved. Investopedia ULC.