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Using and Trading VIX Volatility Derivatives Futures Options ETFs and ETNs

The newest asset class – volatility – has only had listed trading instruments since 2004, when VIX futures were listed on the CBOE Futures Exchange. The growth of derivatives and related products has been tremendous, and these products should be understood and utilized by most traders.

This seminar will cover the basics of VIX futures and options. While they are useful for speculation, their usage is better in spreads and as clues to broad stock market direction. Strategies will be described that take advantage of spreading opportunities that often arise.

In recent years, ETNs and ETFs on these products have proliferated. Descriptions of the basics of the most liquid of these will be given, along with advice on what to avoid and what to look for when trading this somewhat misunderstood aspect of the volatility space. Finally, it will be shown how to use these products to protect a portfolio of stocks.

  • The CBOE has called VIX options the single most successful product ever listed.
  • VIX derivatives, while extremely useful, are not necessarily straightforward.
  • Learn the basics of VIX futures, options, and ETNs.
  • Proper valuation of VIX options.
  • Use VIX derivatives to protect a stock portfolio.
  • Recognize when to use highly profitable spread strategies.

About Lawrence G. McMillan

Lawrence G. McMillan
Lawrence G. McMillan

Lawrence G. McMillan is the author of Options As a Strategic Investment, the best-selling work on stock and index options strategies. He currently authors a unique daily advisory service – Daily Volume Alerts – and also edits and publishes "The Option Strategist", a derivative products newsletter covering equity, index, and futures options. In these capacities, he is the President of McMillan Analysis Corporation, which he founded in 1991. He has spoken on option strategies at many seminars and colloquiums in the United States, Canada, and Europe. In addition, he trades his own account actively, and he manages option-oriented accounts for certain individuals.

Mr. McMillan is the recipient of the Sullivan Award for 2011, awarded by the Options Industry Council in recognition of his contributions to the Options Industry.

Prior to founding his own firm, Mr. McMillan was a proprietary trader at two major brokerage firms – Thomson McKinnon Securities and Prudential-Bache. He initially worked for Bell Telephone Laboratories in Whippany, NJ, from 1972 to 1976. Mr. McMillan holds a B.S. degree in mathematics from Purdue University (1968) and an M.S. in applied mathematics and computer science from the University of Colorado (1972).

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