Tool Tutorials

VIX vs VX30 Radar Tutorial

Chapter 1

Understanding Term Structure Mechanics

The VIX vs VX30 Radar evaluates the point gap between spot VIX and VX30 alongside its 5-day rate of change (Gap 5D Change). By applying a Dual-Variable Matching Protocol (Spot VIX Level + Gap Rate of Change), the tracker identifies statistically equivalent historical setups to project forward VIX spike probabilities across 5-, 10-, and 20-session trading windows.

1. Conceptual Hierarchy

The slope of the volatility curve reveals whether market participants are paying a premium for immediate volatility protection or long-term hedging:

Contango Environment (Standard Calm Market) 18.58 19.35 Point Gap +0.77 Points Spot VIX (Today's 30-Day Volatility) VX30 Future (Volatility 1-Month Out)
The 30-day future prices 0.77 points above spot VIX. That upward slope is contango, and it is the shape the curve holds through most calm stretches.
  • Positive Point Gap (Contango): VX30 > Spot VIX. Forward volatility trades at a premium to spot. This upward-sloping curve is typical of quiet, calm market regimes.
  • Negative Point Gap (Backwardation): Spot VIX > VX30. Inverted curve where immediate volatility trades at a premium to forward contracts. Signals urgent, spot-driven hedging demand during active market stress.
Radar Focus

The tool evaluates more than the absolute curve shape. It also measures the speed and direction at which the point gap is expanding or contracting.

2. Baseline System Inputs

The system captures two live inputs from the active session:

System Inputs = ( Spot VIX Level , VIX to VX30 Point Gap )
Example Input Pair: ( Spot VIX = 18.58 , Point Gap = +0.77 Points )
See today's reading
Chapter 2

Gap Rate-of-Change & Dual-Variable Matching

A point gap of +0.77 can occur during a quiet market drift or during the onset of a market shock. The trajectory of the gap separates these environments.

1. Point Gap & 5-Day Rate of Change

The point gap measures raw term structure distance, while the 5-day change measures its momentum:

Point Gap = VX30 − Spot VIX
Example Execution: 19.35 − 18.58 = +0.77 Points (Contango)
Gap 5D Change = Point Gap (Today) − Point Gap (5 Sessions Ago)
Example Execution: 0.77 − 0.44 = +0.33 Points (Widening / Steepening)
VIX to VX30 Term Structure Curve Shift Gap 5D Change = +0.33 Points Widening +0.44 +0.77 5 Sessions Ago Current Session
The gap grew from 0.44 to 0.77 across five sessions. That widening is the reading the radar matches on, and it is what the banner reports next to the gap itself.

2. Dual-Variable Matching Protocol

Candidate historical sessions must satisfy two independent constraints simultaneously:

Candidate Match Filter 1. VIX Level Filter Matches historical sessions where Spot VIX sat near active level (e.g., 17.58–19.58) 2. Gap Rate-of-Change Filter Matches historical sessions where the gap shifted in the same direction (+0.33)
Both constraints have to hold on the same session. The VIX filter keeps the starting point comparable; the gap filter keeps the curve moving the same way.
Why Directional Alignment Matters

A gap change of +0.33 (steepening) and −0.33 (compressing / flattening) carry opposite market implications. Matching strictly on size without holding direction constant would pool calm and stressing environments together, distorting forward probabilities.

Chapter 3

Cumulative Intraday Spike Probabilities

The Spike Probability Engine measures how frequently matched historical sessions touched specific point-expansion targets across three forward time frames: 5, 10, and 20 trading days.

1. Intraday "Touch" Logic

Breaches are registered the moment spot VIX touches or crosses a target price intraday. The model does not require VIX to close at or above that level.

  • Upward Targets: Triggered if the intraday High reaches or crosses the target.
  • Downward Targets: Triggered if the intraday Low reaches or crosses below the target.
18.58 Entry Close 23.58 Target Hit Intraday Closes Lower Later Day 0 Day 20
This path hits the target early in the window and then closes lower than it started. The touch is what gets recorded, so the session still counts toward that level.
Execution Rule

Any intraday touch registers as a valid historical breach across all active forward windows (5, 10, or 20 days), even if VIX drops back down before the session close.

2. Forward Probability Matrix (Sample: VIX = 18.58, Point Gap = +0.77, Gap 5D Change = +0.33)

Threshold DeltaAbsolute VIX Target5-Day Time Frame10-Day Time Frame20-Day Time FrameAnalytical Insight
VIX +5 Pts23.5824.6%30.4%49.3%Nearly 50% of matched historical setups hit this target within 20 days.
VIX +10 Pts28.587.2%11.6%21.7%Odds roughly triple between week 1 and week 4.
VIX +15 Pts33.581.4%5.8%13.0%Tail-risk territory; represents elevated market shock events.
VIX +20 Pts38.581.4%4.3%7.2%Exceeds the 5% threshold, flagging heightened tail-risk warning status.
VIX −5 Pts13.581.4%4.3%17.4%Downside mean-reversion paths open up primarily in the fourth week.
Open the chart
Chapter 4

Historical Setup Log

The Setup Log provides an audit trail detailing every individual historical trading session that matched both search parameters: the Spot VIX Filter and the Gap Rate-of-Change Filter.

The Columns

Column HeaderDefinitionAnalytical Value
DateHistorical trading session timestamp.Shows historical path distribution across macro regimes.
VIXClosing spot VIX level on the matched session date.Confirms starting point compatibility across matches.
VX30Closing level of the 30-day VIX future on that date.Supplies the forward curve data behind the point gap.
SpreadPoint gap (VX30 minus Spot VIX).Shows whether the session sat in contango or backwardation.
Gap 5D ChangeTrailing 5-day change in the point gap.Confirms row alignment with the active rate of change.
Highest VIX MoveMax intraday point expansion above entry across 5/10/20 sessions.Supplies raw intraday metrics feeding probability calculations.

Interpretation Rules

  • "Never Went Higher": Indicates that spot VIX did not trade above its entry closing price at any point during the forward window.
  • Pending Status: Identifies recent historical matches whose 5-, 10-, or 20-session tracking windows are currently ongoing.
  • Spread Range: Because the radar matches on gap momentum rather than absolute spread, matched rows can feature varying resting spreads (including negative values during backwardation shifts).
  • Skew Evaluation: Comparing average peak moves against median peak moves reveals whether sample probabilities are driven by a few extreme tail events or broad systemic trends.
Example Skew Analysis

In this matched sample, the median peak 20-day move was +4.90 points, while the maximum peak move reached +47.14 points (from an August 2024 session). Sorting by the 20-day column immediately isolates these extreme outlier events.

Open the log

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