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Volatility CFD trading with IG Australia
Access a wide range of markets and trade the VIX with flexible trading opportunities and risk management tools.
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FTSE 100 listed¹
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50+ years of expertise
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800k+ clients
Important CFD trading information
With CFDs, you can lose more than you deposit and you do not have ownership of the underlying asset. You may be subject to margin close-outs if you do not maintain sufficient margin.
What is volatility trading?
Volatility trading involves speculating on the size and frequency of price movements in a financial market, rather than predicting whether prices will rise or fall.
Why trade volatility CFDs with IG?
Wide range of markets
Trade volatility CFDs on the VIX, EU Volatility Index2, and volatility ETFs without owning the underlying asset.
Advanced charting tools
Analyse markets with interactive charts, technical indicators, price alerts, and integrated trading tools.
Extended trading hours
Trade 24/73 with the largest range of weekend markets and out-of-hours stocks offered by any provider.
Important CFD trading information
With CFDs, you can lose more than you deposit and you do not have ownership of the underlying asset. You may be subject to margin close-outs if you do not maintain sufficient margin.
Ways to trade volatility
Choose from three different strategies that enable you to take a position on volatility. You can: seek out volatility in traditional markets; trade a volatility product such as the VIX; or use our flexible options contracts.
- Volatile markets
- VIX
- Options
Seeking volatility in traditional markets
Volatility can hit almost any market, driven by macroeconomic and geopolitical events or factors that uniquely affect a particular sector or asset.
Which markets are most volatile?
While periods of volatility across global markets can be triggered by geopolitical and other events, certain financial assets are inherently volatile – typically moving by large numbers of points in a normal day. Take a look at some examples below.
- Indices
- Commodities
- Forex
Dow Jones
Compare the Dow (Wall Street), currently trading at around 23,000, with the S&P 500 (US 500) at around 2500. Given the difference in the relative value of these indices, it’s easy to see why the Dow typically exhibits much larger intraday movements than the S&P 500.
The DAX
For similar reasons, even in Australia the DAX (Germany 40) is often more popular with traders than the FTSE 100, which is around 55% smaller and tends to be considerably less volatile.
Oil
Oil has a long-standing reputation for volatility, as its price is readily destabilised by political unrest and economic developments. The 2020 oil price war is a case in point, with record increases in supply alongside waning demand causing the Brent Crude price to plummet.
Gold
Traditionally seen as a safe haven for investors in uncertain markets, gold has found a new role more recently. With the onset of the coronavirus pandemic, the metal appeared to lose its lustre and its price grew surprisingly unpredictable and volatile.
GBP/USD
The value of the pound against the dollar typically reacts strongly to any political upheaval or uncertainty in the UK. Recent examples have included Brexit and its fallout, as well as the spread of the Covid-19 virus. This caused a flight to the dollar – considered a safe haven – driving down GBP/USD.
EUR/USD
These two behemoth currencies might be expected to show more stability than most, yet the pair has also proved susceptible to the tumult of the market recently. As the coronavirus multiplied throughout Europe, EUR/USD responded with a period of unusual volatility.
Prices above are subject to our website terms and conditions. Prices are indicative only.
Trading the volatility index (VIX)
Trade IG’s VIX2 market, and you’re taking a view on the future political and economic landscape. The index usually rises in line with global instability and falls when prospects are clearer.
You can get an idea of our VIX market’s likely direction from the price of safe-haven assets like gold and the dollar, which are usually pushed up by growing demand during uncertain times.
You can also look to the yield curve: a fall in long-term yields combined with a rise in short-term yields is normally linked with growing fear in the markets. This happens when investors turn to the bond market rather than riskier assets like stocks. Since most market sell-offs are volatile, an inverted yield curve suggests our VIX market is likely to rise and stocks to fall.
Plus, you can trade the EU Volatility Index (VSTOXX),2 which tracks the volatility of Euro Stoxx 50 options.
Taking advantage of volatility with options
Options are contracts that give you the right – but not the obligation – to buy or sell an underlying asset before a certain expiry date.
They’re ideal for trading volatility, as you can use them to take a position on a wide range of financial assets in rising, falling or even flat market conditions. This means you can use them to trade low as well as high volatility.
Possible risks of trading volatility CFDs
You can lose more than your initial deposit
CFDs use leverage, so losses can exceed your initial investment.
Market events can cause sudden price movements
Geopolitical events and changes in market sentiment can trigger sharp movements in volatility.
Volatility can be difficult to predict
Changes in market conditions can make volatility movements difficult to predict.
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FAQs
What is volatility trading?
Volatility trading involves taking a view on how much an asset’s price will move, rather than whether its price will rise or fall.
What causes market volatility?
Volatility can be driven by factors such as economic data, political developments, company announcements, market sentiment, and changes in supply and demand.
What are the benefits and risks of volatility trading?
Volatility trading lets you speculate on rising or falling markets and diversify your trading opportunities, but volatility can move sharply and leverage can magnify losses, meaning you can lose more than your initial deposit.
Can you trade volatility CFDs when markets are falling?
Yes, you can go short on volatility CFDs to speculate on falling prices.
1 IG Australia is part of IG Group Holdings Plc, a member of the FTSE 100.
2 We price our Volatility Index (VIX) and EU Volatility Index contracts in a different way to the rest of our cash index markets. Rather than aiming to replicate the underlying index price, we follow the method used to derive our undated commodity prices. This means there is a difference between our undated price and the underlying index price on these markets. Funding is also calculated in line with the undated commodity method. Please see our overnight funding page for more details.
3 24/7 means all week apart from ten hours from 10pm Friday to 8am Saturday (UK time), and 20 minutes just before the market opens on Sunday.
4 Number 1 in Australia by primary relationships, CFDs & FX, Investment Trends November 2025 Leveraged Trading Report.
5 Best Finance App, Best Multi-Platform Provider, Best Platform for the Active Trader and Best Online Stockbroker as awarded at the ADVFN International Financial Awards 2025.
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Disclaimers
- CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You do not own or have any interest in the underlying asset. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Please consider the Margin Trading Product Disclosure Statement (PDS), Risk Disclosure Notice and Target Market Determination before entering into any CFD transaction with us.
- The value of shares, ETFs and ETCs bought through an IG share trading account can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.
- Please ensure you fully understand the risks and take care to manage your exposure.
- The information on this website is prepared without considering your objectives, financial situation or needs. Consequently, you should consider the information in light of your objectives, financial situation and needs.
- This website is operated by IG Australia Pty Ltd. IG Australia Pty Ltd is located on Level 32, Queen & Collins, 376-390 Collins Street, Melbourne, VIC 3000. ABN 93 096 585 410, Australian Financial Services Licence No. 515106. Derivatives Issuer Licence in New Zealand FSP No. 684191, NZBN 9429047618251.