The Relationship Between the VIX and VX

Market volatility, as measured by the VIX (spot volatility) and /VX (futures volatility) displays some very interesting patterns. First, volatility is almost always in a state of contraction, so <a href="https://ontt.tv/gRfot">when volatility does expand rapidly</a>, it’s fighting against market pressure to contract back to lower levels quickly. But second, while future volatility as measured by /VX is normally higher than current volatility as measured by the VIX, also known as contango, there are times when this relationship is flipped, and the market is said to be in backwardation.<a href="https://ontt.tv/Q15PX">Did you catch our show on how to determine Delta/Theta levels for your portfolio</a>?