Index Options, Including the Cboe Volatility Index
Chapters in this video
What this video covers
- How aggregate exercise price differs for equity options and index options: underlying security units versus the index multiplier
- Why currently traded index options settle in cash against a calculated value rather than through delivered shares
- How broad-based, market, narrow-based, industry, and micro narrow-based classifications work, including the single-country rule
- How an Individual Stock or exchange-traded fund (ETF) Based Volatility Index estimates expected volatility from real-time bid and ask quotes rather than executed trades
- How standard monthly volatility index options and VIX options determine exercise settlement dates, including their different holiday adjustments
- How the Special Opening Quotation (SOQ) uses opening prices, bid and ask averages when no trade occurs, and the five-cent ask exception
- How expiration, settlement calculation, and the last trading day relate, including why trading ends before expiration
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