Predicting Market Moves Using VIX | What Else Ya Got

Share it with your friends Like

Thanks! Share it with your friends!

Close

How the VIX is used to calculate the expected move of the S&P 500 and how you can use it when selling premium!

Check out more options trading videos: http://ow.ly/FeVO2

The VIX is often used a measure of volatility for the overall market. This makes the VIX very useful in that we are able to calculate the expected move of the S&P 500 over the next 30 days, using the VIX. However, this raises the question, how accurate is the VIX at predicting these moves?

Today, Tom Sosnoff and Tony Battista answer this question. First, they show the formula for calculating the expected move using the VIX. Then they guys see how accurate the VIX has historically been at predicting these moves. They find out that it is very accurate but tends to overstate. Next, the guys look at the difference between a low VIX and a high VIX. They find out that both environments overstate the actual moves of the S&P 500 but when the VIX is high, it provides more premium in the options and a larger edge!

Nobody rants like these ex-floor traders. Tom Sosnoff and Tony Battista touch on topics no body else wants to go near.

You can watch a new What Else Ya Got? episodes live and check out all previous episodes everyday at http://ow.ly/EoyGW!

======== tastytrade.com ========

Finally a financial network for traders, built by traders. Hosted by Tom Sosnoff and Tony Battista, tastytrade is a real financial network with 8 hours of live programming five days a week during market hours. From pop culture to advanced investment strategies, tastytrade has a broad spectrum of content for viewers of all kinds! Tune in and learn how to trade options successfully and make the most of your investments! Plus, access our visual trading platform, dough, to learn the basics of options trading and manage your portfolio! With hours of tutorial videos and unique tools on a simple, easy-to-use trading interface, dough.com is here to make learning how to trade options fun!

Subscribe to our YouTube channel: http://goo.gl/s2bAxF

Watch tastytrade LIVE daily Monday-Friday 7am-3:15pmCT: https://goo.gl/OTv3Ez

Follow tastytrade:
Twitter: https://twitter.com/tastytrade
Facebook: https://www.facebook.com/tastytrade
LinkedIn: http://www.linkedin.com/company/tastytrade
Instagram: http://instagram.com/tastytrade
Pinterest: http://www.pinterest.com/tastytrade/

Comments

Tristan Marroquin says:

Could you buy options with low IV to sell them at high IV? or would you have to be too directionally right?

CS91 says:

MORE VIX VIDEOS PLEASE!!!!!

David W. Johnson says:

YOU GUYS SHOULD EACH OPEN A SEPARATE $25,000 ACCOUNT AND GROW IT TO 1 MILLION WITH YOUR STRATEGIES. SHOW US HOW IT'S DONE.

Comments are disabled for this post.