VIX Options

Stock market traders are always looking for more options. One set of options that could be a useful tool for traders are VIX options. These options let traders hedge their portfolios against sudden drops in the market. VIX Options are non-equity options that use volatility indexes as their underlying asset. This is the first exchange traded option that gives individual investors the opportunity to trade market volatility.

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When traders believe that market volatility is on the rise, they can then purchase VIX call options to profit from that possibility. Sudden increases in volatility usually equate to falling markets. That makes VIX options a natural hedge instead of using index options.

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