CBOE Volatility Futures

CBOE Volatility Futures are financial contracts that allow investors to bet on the future level of market volatility, as measured by the CBOE Volatility Index (VIX). The VIX reflects expected market turbulence; higher values indicate greater uncertainty. By trading these futures, investors can hedge against or speculate on changes in volatility. For instance, if someone believes that market turmoil is coming, they might buy volatility futures, anticipating that their value will rise. Conversely, if they expect calm markets, they might sell them. This provides a tool for managing risk and influencing investment strategies.