July VIX settlement took place this morning

By Lawrence G. McMillan

July $VIX settlement took place this morning.  The official settlement price was 19.10, just slightly below last night's $VIX close of 19.21.  All outstanding June futures and options contracts will settle at that price.  For example, if you own a July 20 put and didn't sell it prior to today, it would settle for 0.90 ($90 per contract), since it is 90 cents in the money (20 minus 19.10).

The settlement price is only a snapshot of $VIX trading, so it is not reliable for discerning trends.  That said, this is roughly the average of the last three months, meaning that $VIX hasn't really gone much of anywhere in that time. 

The accompanying graph shows all the $VIX settlements since the inception of $VIX futures trading in May, 2004.  One thing that stands out on the graph is that this current bull market has been accompanied by a higher $VIX than was the one in 2004-2006.