VIX futures are Cboe futures contracts on where the VIX index (expected 30-day S&P 500 volatility) will be at expiration. The standard VX contract is worth $1,000 × the VIX futures price, and the Mini (VXM) is worth $100 ×. They usually trade above the spot VIX in calm markets (contango) and below it in panics (backwardation). You can't trade the VIX index directly, so VIX futures and the products built on them are how traders get volatility exposure.
"The VIX spiked 40% today" is a headline you'll see a few times a year. What most traders don't realise is that you can't buy the VIX itself. You trade VIX futures, or products built on them, and they behave very differently from the index. That gap is where many volatility trades go wrong.
What the VIX measures
The Cboe Volatility Index (VIX) is calculated from S&P 500 option prices and represents the market's expected volatility over the next 30 days, as an annualised percentage. A VIX of 20 implies an expected annualised move of about 20%, roughly 1.25% a day (20 ÷ √252).
Rough regimes:
| VIX level | Typical market mood |
|---|---|
| Under 15 | Calm, low volatility |
| 15–20 | Normal |
| 20–30 | Elevated uncertainty |
| 30+ | Stress or panic; big daily swings |
Contract specifications
| VIX futures | Mini VIX futures | |
|---|---|---|
| Symbol | VX | VXM |
| Exchange | Cboe Futures Exchange (CFE) | CFE |
| Multiplier | $1,000 × futures price | $100 × futures price |
| Tick size | 0.05 | 0.05 |
| Tick value | $50 | $5 |
| Settlement | Cash, to a Special Opening Quotation (SOQ) of the VIX | Cash |
| Expirations | Monthly (plus weeklies) | Monthly |
A 2-point move in VX is $2,000 per contract, and $200 in VXM. VIX futures expire on a Wednesday, typically 30 days before the following month's standard S&P 500 options expiration, and settle to a special opening quote calculated from SPX options that morning.
Score the Setup Before You Take It
TRADZY's Void Engine rates any setup 0–100 across 12+ variables: structure, trend alignment, volume, momentum and key levels.
Score a Setup Free →Contango and backwardation: the key concept
Each VIX futures month is a bet on where the VIX will be at that month's expiration, not today. Together they form the term structure.
- Contango (the usual state): later months trade above spot VIX. Markets are calm, and the curve prices in some future uncertainty. As time passes, futures tend to drift down toward spot.
- Backwardation (stress): front months trade above later months and are often below spot. Panic is now, and the market expects it to fade.
This is why buying VIX futures, or long-VIX ETFs, as a long-term hedge tends to lose money: in contango you keep selling cheaper expiring futures and buying pricier later ones, month after month. That's roll decay.
Why VIX ETFs don't track the VIX
Products that are long VIX futures lose value over time in contango, often heavily. They can spike during crashes, but they're designed for short holding periods. Inverse-volatility products do the opposite: they gain slowly in calm markets and can lose most of their value in a single volatility spike, as happened in February 2018. Read the prospectus of any volatility product before trading it.
How traders use VIX futures
Hedging equity portfolios. Long VIX futures (or VIX calls) can rise sharply when stocks crash, offsetting losses. The cost is carry decay in calm periods, so timing and sizing matter.
Trading volatility spikes. After extreme spikes, the VIX has historically tended to mean-revert. Some traders short front-month VX or buy VIX puts after panics. This has large tail risk: a spike can keep spiking.
Term structure trades. Spreads between months (for example, long the second month, short the front) trade the shape of the curve rather than its level.
A market signal. Even if you never trade VIX futures, the term structure is useful context. Backwardation means stress, so cut size in your stock and index trades.
Risk management
- Know your multiplier: $1,000 (VX) or $100 (VXM) per point.
- VIX moves are extreme. 20–50% single-day spikes happen. Size accordingly, and prefer VXM or defined-risk options.
- Short volatility has asymmetric risk: small, frequent gains and occasional very large losses. Hard stops can gap.
- Watch expiration dates. Settlement uses a special opening quote that can differ from the prior close.
For how the VIX fits into a broader sell-off read, see Why Is the Stock Market Down Today? and our stock market crash guide. Futures basics are in What Is Futures Trading?
TRADZY's analytics show how your results change across volatility regimes. Many traders find their edge disappears when the VIX is above 25, and that's worth knowing before the next spike.
FAQ
Can you buy the VIX directly?
No. The VIX is a calculated index. You get exposure through VIX futures, VIX options, or ETFs and ETNs that hold VIX futures.
What is the multiplier for VIX futures?
$1,000 per point on the standard VX contract, and $100 per point on Mini VIX futures (VXM). The minimum tick of 0.05 is worth $50 and $5 respectively.
Why do VIX ETFs lose value over time?
Most hold VIX futures, which usually trade in contango. Rolling from cheaper expiring contracts into more expensive later ones creates steady decay when markets are calm.
What is contango in VIX futures?
When later-month VIX futures trade above nearer months and above spot VIX. It's the normal state in calm markets and reflects expected future uncertainty.
When do VIX futures expire?
Usually on a Wednesday about 30 days before the next month's standard S&P 500 options expiration, settling to a special opening quotation of the VIX.
Put This Into Practice
- Score your next setup 0–100 with the Void Engine before entering
- Log the trade and tag the setup in the TradLog
- Review weekly: keep what pays, cut what doesn't
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Educational content, not financial advice. Trading involves substantial risk of loss.