** Interested in learning how to trade VIX futures and ETFs? **Do not miss out the next great opportunity to short vol.

Find out more at VIXMon.com's trader seminars.

The images above show the MOVE and VIX indexes for the last 5 years, and ratio=VIX/MOVE. While it appears from the plot that MOVE started increasing much earlier in apparent anticipation of 2008, corresponding to low points in the ratio plot, subsequent rise in the VIX was much more severe than that of the MOVE.

To get a better view of the relationship between the two indexes I conducted a number of regression-based tests. The results all indicate that indeed MOVE index can help predict future level VIX. The simplest model for the VIX level based on the MOVE is

**VIX = EXP(-1.84+1.06*LN(MOVE))**

You can type the formula directly into Excel. MOVE index closed yesterday at 98.70, implying VIX price of 20.65, compared to the last VIX price of 20.88.

** Interested in learning how to trade VIX futures and ETFs? **Do not miss out the next great opportunity to short vol.

Find out more at VIXMon.com's trader seminars.

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