VIX Futures Trading Strategy Backtest And Example

Want to know about the VIX futures trading strategy? Introduced in 2004, VIX futures offers market participants the ability to trade a liquid volatility product based on the VIX Index — an index that measures implied volatility in the U.S. equity market. VIX is one of the most common barometers of market sentiment. For speculative traders, the index is not only a useful tool for assessing risk, as its futures also presents a way to speculate on volatility itself.

A VIX futures strategy refers to the methods and techniques you can use to trade VIX futures, which are financial derivative products that represent a contract to trade a specified unit of the index at a pre-agreed price on a future date.

This strategy may include using technical or fundamental indicators to analyze the market in order to determine an exact entry point. VIX futures trade on Cboe Futures Exchange (CFE) and allows traders to speculate on volatility and diversify their portfolio.

In this post, we answer some questions about the VIX futures strategy and we also make a backtest. We would also like to remind you that we have hundreds of trading strategies in our library.