Calling All Fans!

We're letting tastynation call the shots! Give us your trade idea or let us solve your problems.

Submit

Market Measures

Monday – Friday | 9:00 – 9:20a CT

Price and IV

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Index price and volatility tend to have an inverse relationship, which means that when index prices decrease, the corresponding implied volatility index tends to increase. This is backed up by our study in SPY, QQQ, DIA, IWM and their corresponding volatility products VIX, VXN, VXD and RVX.

According to our study, when the indices' prices fall by 1%, the corresponding IV indices will increase, but at different scale.

More specifically:

  • VIX rises by 9% when SPY fall by 1%,
  • VXN rises by 6% when QQQ fall by 1%,
  • VXD rises by 7% when DIA fall by 1%,
  • RVX rises by 5% when IWM fall by 1%.

Tune in as Tom and Tony discuss using this information when trading.

Market Measures More installments

See All »

Latest tastytrade Videos As of July 17

Most Shared From the last 30 days