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VIX Trading System & Backtesting Tool
The widely followed VIX is a measurement of the S&P 500’s expected movement over a 30-day period. Most traders monitor the VIX to measure risks in the stock market, but this is short-sighted. To see the clear picture, traders must follow VIX Term Structure.
Why You Should Follow the ENTIRE VIX Term Structure
By focusing on the S&P 500's movement over a 30-day period, it's easy to lose sight of the bigger picture. Check out this example:
NOVEMBER 15, 2019
The VIX (30d) was trading at 12.07, and the 9-day VIX was 9.67. This is considered “normal”.
FEBRUARY 17, 2020
The VIX (30d) spiked 226% from $12.07 to $39.16, but the action was hidden in the 9-day which jumped from $9.67 to $54.74, a 466% spike higher.
MARCH 16, 2020
The VIX (30d) continue to rise to $82.69.The 9-day VIX, again, tells the most accurate picture of the current trading environment.