Volatility Trading: AI Analysis of VIX Term Structure and Volatility Strategies

Volatility itself can be traded as an asset class.

VIX Term Structure

Contango (upward-sloping) vs backwardation (inverted) in VIX futures signals market stress levels.

Implied vs Realized Spread

The volatility risk premium — the persistent gap between implied and subsequently realized volatility — is one of the most reliable return sources in options markets.

Skew Analysis

Put-call skew reveals demand for downside protection. Extreme skew often precedes either actual declines or mean reversion in skew itself, creating trading opportunities.