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INTO THE FUTURES
By Journal of Indexes Staff

VIX Sees Record Volumes

January was a pretty good month for VIX futures contracts trading on the CBOE Futures Exchange (CFE), despite the decline in the stock markets: The contract volume was up 91% from January 2007, with 85,731 contracts trading hands for the month. That’s about 89% of the CFE’s total contract volume for January.

VIX futures contracts, not surprisingly, have been doing well in the increasingly volatile market environment. January wasn’t even the highest-volume month in recent history. In November 2007, one of the more volatile months of the year, a total of 173,864 VIX futures contracts were traded, a 303% increase over November 2006. August 2007 was another fairly volatile month that saw a dramatic increase in the number of VIX futures contracts traded.

The CBOE says hedge funds account for much of the volume, as hedge fund managers use the futures to hedge against spikes in implied volatility. VIX futures contracts were launched in March 2004.
 

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