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Volatility Representation


Guest JimmyRCRD

Question

Guest JimmyRCRD

Hi all,

 

I've been trying to make sense of exactly what the IG volatility index tracks. I can understand that it tracks the futures price vs the spot price. 

 

My  main point of difference is that does the IG VIX futures pricing influence the pricing in regards to the options contracts they offer. There is a very persistent and oddly annoying trend of IG forum support staff giving the answer which is more or less not the answer the OP is looking for. 

 

What I would like to know is very simple. Does the VIX futures level scale the option prices on IG's side of things vs the actual prices? Are the prices taken directly from the actual options prices with the bid/ask spread and fees added in? It's confusing seeing the actual VIX level at 26, then the IG VIX level at 31. Should I track the actual VIX with something else or should I look at the IG VIX for a more comprehensive view of your options pricing in relation to my options 'contracts'?

 

Feel free to ask for any clarification on what I'm asking.

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