What is vix premium?

The VIX premium, or VIX options premium, refers to the price that investors pay for options on the CBOE Volatility Index (VIX). The VIX is a popular measure of market volatility, often referred to as the "fear index" because it tends to increase during times of market uncertainty and decrease during periods of market stability.

VIX options allow investors to speculate on the future volatility of the market. The VIX premium is the cost of buying or selling these options, and it reflects the market's expectations for future volatility. Generally, the higher the VIX premium, the greater the expected volatility in the market.

Investors use VIX options to hedge against volatility, as a way to profit from market swings, or as a way to protect their portfolio during turbulent times. However, trading VIX options can be complex and risky, as the VIX itself can be highly volatile and difficult to predict.

Overall, VIX premium is an important indicator of market sentiment and can provide valuable insights for investors looking to manage their risk exposure in volatile markets.