- Wealth PMS
We now have trades on the Volatility Index (VIX) futures. In a more detailed post to Capital Mind Premium, I spoke of how the VIX was constructed, and provided a background into Option Pricing. To summarize, one part of the option pricing calculation includes an estimation of volatility in the subsequent days to expiry.
The reason you pay “time value” to options is that there is a risk of the stock being volatile in . . .