What Is VVIX and Why Options Sellers Should Track It

VVIX is the volatility of volatility index. If the VIX measures how uncertain the market is about future price movement, the VVIX measures how uncertain the market is about that uncertainty itself. In practical terms, it tracks how much the VIX is expected to swing around.

For options sellers — particularly those running iron condors — VVIX provides a signal that the VIX alone does not: whether the current volatility environment is stable or erratic.

What VVIX Measures

The VIX (CBOE Volatility Index) reflects 30-day implied volatility for the S&P 500. It is calculated from S&P 500 option prices. A VIX of 16 means the market expects approximately 1% daily movement on average.

VVIX is calculated the same way, but using VIX option prices rather than S&P 500 options. It measures implied volatility of the VIX — how much the VIX itself is expected to move over the next 30 days.

CBOE publishes both indices. A VVIX reading of 80 is considered normal. Elevated readings above 100–120 signal that the VIX is expected to be highly unstable — meaning volatility itself is about to become unpredictable.

Why This Matters for Options Sellers

Options sellers profit when implied volatility is stable and tends to decrease over time. When VVIX spikes, it is a warning that the VIX is about to become erratic — which can create sudden repricing of options premium even if the underlying index has not moved much yet.

Think of it as a leading indicator for volatility regime shifts. A rising VIX with a rising VVIX is more concerning than a rising VIX with a stable VVIX, because the former suggests the volatility expansion is accelerating and uncertain, while the latter suggests volatility is rising in a more predictable, controlled way.

For iron condors, a high VVIX environment means:

• The VIX may spike suddenly, causing rapid mark-to-market losses on short vega positions
• Strike placement that looks safe today could become insufficient quickly
• Position sizing and width of spreads should be conservative

VVIX vs VIX: What Each Signals

Both indices rising together signals a potential risk-off environment. VIX elevated while VVIX is calm suggests a measured volatility increase, which tends to be more manageable for premium sellers. VIX below average while VVIX is elevated is a warning that calm conditions may not persist.

How to Use VVIX in Practice

VVIX is not a trade trigger on its own. It is context for sizing and entry decisions.

High VVIX (above 100): Consider reducing position size, widening spreads to give more buffer, or waiting for conditions to stabilize before entering new iron condors. This environment has historically been associated with elevated tail risk.

Moderate VVIX (80–100): Normal operating range. Pay attention to direction — is VVIX rising or falling? A falling VVIX from an elevated level often precedes a calmer period favorable for premium collection.

Low VVIX (below 80): Volatility is expected to be stable. This can be a favorable environment for options sellers, though low VIX alongside low VVIX may mean premium is thin.

Tradematic uses institutional market data — including gamma levels, dealer hedging flows, and volatility regime indicators — to determine optimal entry timing for iron condors. Understanding what VVIX signals helps you understand why an automated strategy may be more or less active in different periods.

Reading VVIX Alongside IV Percentile

VVIX is most useful when combined with other volatility metrics. IV percentile and IV rank tell you whether current implied volatility is high or low relative to its own history. VVIX tells you whether that volatility level is stable or about to shift.

An environment with high IV rank and low VVIX is often optimal for premium sellers: you are collecting rich premium in a stable volatility environment. An environment with high IV rank and high VVIX is higher risk: the premium is rich, but volatility may not settle in your favor.

Also see how to use the VIX for iron condor timing — which covers the base-level VIX signals that VVIX builds on.

Historical VVIX Spikes and What They Preceded

VVIX has historically spiked before or alongside major market dislocations:

• 2020 (COVID crash): VVIX reached above 170 as the VIX spiked to 85. Options sellers faced extreme losses during this period.
• 2022 (rate hike cycle): VVIX elevated for most of the year as the Fed raised rates rapidly, sustaining high VIX volatility.
• 2024 August sell-off: VVIX briefly spiked above 130 as yen carry-trade unwinds triggered rapid VIX movement.

These events show that high VVIX is not always followed immediately by a crisis — but sustained high VVIX signals an environment where managing risk tightly matters more than maximizing premium collection.

Frequently Asked Questions

What is VVIX? VVIX is the CBOE Volatility of VIX Index. It measures the expected 30-day volatility of the VIX itself, derived from VIX option prices. A normal reading is around 80–95; above 100–120 indicates heightened instability in the volatility environment.

How is VVIX different from the VIX? The VIX measures expected volatility for the S&P 500 index. VVIX measures expected volatility for the VIX itself — one level up the volatility chain. A high VVIX means the VIX is expected to swing significantly, regardless of what level the VIX is currently at.

Should options sellers avoid trading when VVIX is high? Not necessarily avoid, but adjust. High VVIX warrants smaller position sizes, wider spreads, and more conservative strike placement. The environment carries elevated tail risk that higher premium alone may not compensate for.

Where can I track VVIX? CBOE publishes VVIX data at cboe.com. Many broker platforms and financial data sites also display VVIX alongside the VIX.

Does Tradematic factor in VVIX when making trading decisions? Tradematic uses institutional market data including volatility regime indicators to determine iron condor entry timing. The strategy is designed to adapt to changing volatility conditions rather than trade indiscriminately.

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Trading involves risk and losses can occur. Past performance does not guarantee future results. Options trading is not suitable for all investors. Only allocate capital you are comfortable risking.