Options traders embrace market volatility

According to Reuters, there's at least one group of traders that is embracing the recent spike in market volatility: options traders. Volatility is back, and options traders love it -- especially traders of Volatility Index (VIX) options:

'œAs a VIX options trader, you don't really care whether markets go up or down. The key is whether it is volatile... The crowd in the pit does not bet on the direction of the stock market. It bets on the magnitude of the move.'
As might be expected, options turnover on the VIX has been active with the return of volatility. In mid-July, the Chicago Board Options Exchange (CBOE) reported that VIX options volume increased to an all-time high of 322,484 contracts. In fact, VIX options were the CBOE's second-most actively traded index product behind its top contract -- S&P 500 options.

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[image: Market Volatility by Robert Shiller]