I repeat.....The price of call options and put options can be used to calculate implied volatility (which is what the VIX is a measure of), because volatility is one of the factors used to calculate the value of these options. Higher (or lower) volatility of the underlying security makes an option more (or less) valuable, because there is a greater (or smaller) probability that the option will expire in the money (i.e., with a market value above zero). Thus, a higher option price implies greater volatility, other things being equal......... This discussion was not really about the suitability of the VIX as a trading tool but as an example of what contrarian could constitute contrarian thinking. There are hundreds of ratios one can use to determine market profile but this is not what that was about.
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