VIX interpretation

Course Name: Volatility Trading Strategies for Beginners, Section No: 13, Unit No: 16, Unit type: Quiz

It's supposed that only options B and C are the correct, what about A? The VIX is obtainned multipliying the 30-day implied volatility by square root of 12 (months), so even when we're calculating an 30-day volatility, we're annualizing the expected outcome, so the option A should be also included as correct answer.

 

Hi Daniel,



The point over here is that while the VIX is expressed in annualised terms, it represents the expected annualized volatility over the next 30 days. It would be improper to extrapolate the volatility to year level.



But I understand your viewpoint and we have updated the quiz accordingly.

I understand, thank you for the clarification and for updating the quiz.