What are VOL Indices and how do they work? – Headway

VOL Indices are Synthetic Indices based on standard random price movements without additional spike or event mechanics.

The number in the instrument name indicates its relative volatility level. The higher the number, the larger the price movement between individual ticks can generally be.

For example, this does not mean that every tick movement on VOL_20 will always be larger than on VOL_10.

However, over time, the average magnitude of price changes on VOL_20 is expected to be greater.

The direction of each price movement is random and symmetrical: the probability that the next tick will be higher than the previous one is the same as the probability that it will be lower.

Related articles