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Minyan Mailbag: What is the difference between VXO and VIX?


...the VIX is basically "New" Coke, while the VXO is "Coke Classic."


Prof. Warner -

What is the difference between VXO and VIX?

Minyan UK


The short answer is that the VIX tracks volatility in the S&P 500, while the VXO measures volatility in the S&P 100 (OEX). If you are looking right here, right now, that is the only important info.

Going back in time though, prior to the fall of 2003, the VIX tracked the OEX, and the VXO did not exist. Simultaneous with the changeover, the CBOE added extra strikes to the "new" VIX calculation, while leaving the VXO as it was.But here's the most confusing part; to go back and chart the "old" pre-2003 VIX, you, of course, have to hit it up as VXO.

So in essence, the VIX is basically "New" Coke, while the VXO is "Coke Classic."

Here is a link to a more "official" explanation from the Chicago Board Options Exchange, AKA the CBOE.

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