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The global growth of VIX has primarily been driven by fundamental factors rather than structural factors such as extended trading hours or distribution channels, but extended trading hours will support that growth.
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Rather it is a function of market activity: What is the VIX trading at? Is volatility rising or falling?
Because of the ease of access, VIX options and futures have broadened out the playing field and reduced that complexity. Now investors of all shapes and sizes can trade volatility; the upshot being that liquidity has deepened in tandem with the global growth of VIX. It is this diversification of clients and the strategies being utilized that has been key to the global growth of VIX and SPX.
Two key trends, aside from client and strategy diversification, have stood out at CBOE over the last decade:. Weeklys are options contracts that expire at the end of day each Friday and may be listed with expirations of up to six consecutive weeks out. That investors will be able to choose VIX futures and options contracts that expire on a weekly basis rather than just monthly will add another layer of precision to the way they manage their portfolios. Right now, VIX futures have an expiration once a month.
FAQ - Trading Hours
Again, this is not to suggest that the contract would only exist for 24 hours. Instead, it would be a case of extending the level of precision further by allowing traders to select contracts for expiration on different days of the week, in addition to Fridays in the case of SPX. Not that they exist for just one day and expire. Thanks to extended trading hours and the imminent introduction of VIX Weeklys futures and options, CBOE is enhancing the way that global investors manage their portfolios, and volatility, more effectively.
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Ask Matt: Trading stock options in after hours
After-hours options trading occurs during one of two sessions outside of normal market hours. These periods are called after-hours options trading , which occurs after the market has closed, or pre-market trading, which is a session before the opening bell rings. In general, both sessions may be referred to as extended-hours trading.
After-hours options trading can be beneficial for:.
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The ability to trade during extended hours has now been made possible by a computerized matching system referred to as the electronic market. Simply put, the electronic market works by matching up buy and sell orders. When it finds a match, the trade is completed. In the event no match is found, the order will not be completed.
SPX options after hours : options
Many companies will offer trading services after hours and charge the same commissions as those performed during the regular market day. There are several order types available to you if you decide to take advantage of extended-hours options trading. These include:.
There are some differences between regular session trading and trading that occurs after hours. When trading after hours, not all types of orders may be accepted, and you can only use limit orders for buying, selling, or shorting. You may not be able to place orders that contain special conditions or restrictions such as:.
The restrictive nature of these special orders, both with timing and completion, makes it difficult to trade after hours. Therefore, these types of orders are often not accepted when trading before or after regular session hours commence.
Order/Ex Management
After-hours trading was once reserved for institutional investors, but now with the ECN capability, it is widely available for any level of investor. The new system also allows institutional investors to invest anonymously, if they choose to do so. After-hours trading has become more widely utilized in the past few decades, and an increasing number of investors are actively embracing it.