Based on the principle of variance swap, the volatility index of 50ETF is compiled on the basis of the option contracts of the SSE 50ETF in recent months and next month, reflecting investors' expectations of the volatility of the SSE 50ETF in the next 30 days. SSE 50ETF Volatility Index is not only an important indicator to reflect investors' sentiment, but also an important target of derivatives market, which can be used as a powerful tool for investors to manage risks.
Simply put, volatility is the severity of the underlying asset price fluctuations. The more violent the price fluctuation, the greater the probability that the option will become true value, and the easier it is for the buyer as an option to make a profit. From the perspective of the disk, the greater the fluctuation, the more the underlying asset price will go out of a sharp unilateral trend. Therefore, analyzing the volatility can be equivalent to analyzing whether the price will go out of the unilateral potential, especially whether it will go out of the unilateral potential.
Volatility can generally be divided into four categories: future volatility, predicted volatility, historical volatility and implied volatility.