Weekly options on VIX have been added to our product offering, allowing you to trade volatility on the short term instead of only monthly or longer dated options.
New VIX Weeklys can be traded in all of Saxo’s platforms, including in the dedicated Contract Options Chain in SaxoTrader.
New weekly expirations are listed on Thursdays (excluding holidays) and expire on Wednesdays but have a Last Trading day on the business day before. CBOE may list up to six consecutive weekly expirations for VIX options.
The VIX uses prices on the S&P 500 Index (SPX) options, and it is constructed to reflect investors' view of the 30-day implied volatility (IV). The IV is often referred to as the extrinsic value of an options price.
Because of this short-term maturity and the accelerated time decay, most traders prefer to sell Weeklys rather than buy them. Covered call, naked puts are examples of some selling strategies that attract investors to these listings. Spreads are also frequently used with the instrument, especially credit spreads as well as calendar and diagonal spreads.