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Trading Reference Links
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VEGA is the change in the price of the option for a change in the
volatility. Investors who trade portfolios of options(pension
funds...hedge funds, etc)buy and sell volatility levels to hedge out
vega changes in their "ongoing" option trading. The challange with the
existing VIX is that it is not a "true" trading measure...it is more of
a benchmark as opposed to a "tradeable" value. The new Index will
actually be a tradeable value, although the index itself will not trade,
the value could be replicated using SPX combos.
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