VIX Indices
What are VIX Indices?
VIX indices are widely used measures of market volatility, derived from options pricing on underlying equity indices. The most recognised example is the CBOE Volatility Index (VIX), which reflects the market’s expectation of volatility over the next 30 days based on S&P 500 index options.
Often referred to as the “fear index”, the VIX provides insight into investor sentiment. When uncertainty or market stress increases, demand for options rises and implied volatility increases. Conversely, during periods of confidence, volatility tends to decline.
Beyond a simple indicator, VIX-related products – including futures and OTC derivatives – allow market participants to trade, hedge and manage exposure to volatility as an asset class.
About our online course
Our VIX Indices course explores how volatility indices are constructed, interpreted and applied in financial markets.
You will gain practical insights into implied volatility, the relationship between volatility and option pricing, and how VIX-based instruments are used for hedging, speculation and portfolio diversification.
The course also examines the differences between US and Australian volatility indices and highlights the opportunities and limitations of trading volatility in practice.
Program Content
- Volatility in practice and the role of the VIX as a market sentiment indicator
- Construction of the VIX and the importance of implied volatility
- Historical vs. implied volatility and the relationship with option pricing
- VIX futures, trading strategies and portfolio applications
Learning Outcomes
- Explain the purpose, construction and interpretation of the VIX
- Distinguish between historical volatility and implied volatility
- Analyse the relationship between volatility and option prices
- Compare the US VIX with the S&P/ASX 200 VIX
- Evaluate the use of VIX futures and volatility derivatives for hedging, speculation and diversification
- Assess the risks and practical challenges of trading volatility
What you will learn
Who is this course for?
- Financial advisers and representatives
- Derivatives and trading professionals
- Risk and compliance specialists
- Portfolio managers and analysts
Units of Competency
Pre-requisite
Recognition of Prior Learning
Certification
You will be awarded a Certificate of Completion. It will be available online for you to download and print immediately.
ASIC-supervised licensees: RG146 Derivatives
FAS-Supervised licensees (self-report): Technical competence
