The VIX Term Structure chart displays the prices of forward VIX futures contracts – also known as VX Futures – across expiration dates. This chart shows traders the shape of the curve (the term structure) over the next 9 months to understand market conditions and expectations of market volatility. Traders can use this chart to understand the risk of future volatility, and to better inform VIX options and futures trades.

Within SpotGamma’s VIX Term Structure, users can visualize how the price of specific futures contracts have shifted over time. Within the settings window in the top right of the chart, select Add Additional Dates to Compare and enter the dates that you would like to compare. This indicates specifically whether traders expect SPX 30-day implied volatility to increase or decrease over time, based on VIX future prices.

Specifically, the VIX Term Structure shows whether VIX Futures are in Contango or Backwardation. The term “Contango” is used to describe scenarios where the futures prices are higher than the spot price. When the term structure is in Contango, traders are expecting more volatility further out, and less volatility in the short-term. The term “Backwardation” refers to scenarios where the futures prices are lower than the spot price. When the term structure is in Backwardation, traders expect more volatility in the short-term compared to further-dated expirations.