Thursday, November 5, 2009

[TheOptionClub.com] Volatility Options

 

I'm currently studying the VXO, VXN, and VIX. For each of these markets, the lowest value in the past twenty years has never really ventured very far, if at all, below 8 or thereabouts. When any of these index's are around 10 to 15, is this the same situation as when Cotton is at twenty year lows at 30 or Coffee twenty year lows at 50 in terms of value. Cotton and Coffee are backed by tangable products, and are not going to zero. Volatility is only a number, back by nothing. However, isn't it always going to 'at least' 1 or 2? Also, are there futures contracts with any of these markets with liquidity, or does everyone trade the options that are based on the underlying, since the underlying's volume in nil. Thanks for the info.

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