Should retail traders trade in VIX futures
Many traders have asked me " Shall we trade in VIX Futures with elections round the corner ? "
Today retail investors can trade in existing derivative products with small amounts ranging between Rs 25,000 and Rs 1 lakh. In comparison, in VIX futures the margin requirement is too high.The minimum contract value of Rs 10 lakh,it does not sound encouraging for retail investors. "Please do remember It is not an investment tool. It is a hedging tool"
The India VIX gives a sense of how much of a swing trader expect in the market over the next 30 days. It does this by taking the prices of the near and middle month out of money options contracts and uses the Chicago Board Options Exchange methodology to arrive at the volatility.VIX, which has a negative co-relation to Nifty. So, it covers the risk of Nifty stocks. Whatever stock the investor buys, he can buy a
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Today retail investors can trade in existing derivative products with small amounts ranging between Rs 25,000 and Rs 1 lakh. In comparison, in VIX futures the margin requirement is too high.The minimum contract value of Rs 10 lakh,it does not sound encouraging for retail investors. "Please do remember It is not an investment tool. It is a hedging tool"
The India VIX gives a sense of how much of a swing trader expect in the market over the next 30 days. It does this by taking the prices of the near and middle month out of money options contracts and uses the Chicago Board Options Exchange methodology to arrive at the volatility.VIX, which has a negative co-relation to Nifty. So, it covers the risk of Nifty stocks. Whatever stock the investor buys, he can buy a
posted by Bramesh at
12:15 PM
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