Disliked{quote} Hi Y..I need to become familiar with trading it (or derivatives of it)....so just need to check out a few things first. I am familiar with the historical low volatility of VIX....but uncertain at the moment of the method to trade VIX and if there are associated holding costs....which would dampen my enthusiasm if there are holding costs cause this insane market could keep plugging away like this till kingdom come. I think R a few weeks back put me onto some brokers who were offering VIX...just need to do some homework first. If you are concerned...Ignored
the multiplier is $ 1,000, so at $ 11.00, the contract would be worth $ 11,000.
the contracts expire monthly. the margin is quite high and the further out you go, the lower the margin.
for the June 2018 contract you still have around $ 2,300 margin = 21%
no holding costs.
more interesting perhaps is to trade VIX with cfd`s on futures with a forex broker.
as an example the margin at ActivBrokers is 0.25% - no holding costs, which they compensate for with higher spread.
the tick value is 0.05, so I assume most futures will trade with a spread of 0.05/0.10, but ActivTrades has a spread of 0.15.
certainly not bad seeing that you would trade the odd time to build a position.
I certainly wont buy any commodities which are not close to their historical low.
Look at oil in the financial crisis in 2008: down from $147 to $33 a barrel.
I think you`re better off to wait until the sxxt hits the fan. oil will go a lot lower than the $ 52.00 it is now imo.
generally we should be looking at 2008 for what to expect.
1