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VRO (VIX settlement value)

The special opening quotation that VIX futures and options settle to, calculated from a single auction in SPX options on the Wednesday of expiry.

VRO is not the VIX index level at any moment of trading. It is computed from the opening prices of a specific set of SPX options in an opening auction, which means it can print meaningfully away from where VIX was quoted seconds earlier.

Because enormous expiring positions settle to one auction, participants sometimes submit large orders into illiquid, far out-of-the-money SPX puts that carry heavy weight in the calculation. Settlement prints several points away from the surrounding VIX level have happened repeatedly and remain contentious.

Example: VIX closes Tuesday at 16.2 and trades around 16.1 pre-open, but VRO prints 17.4. A holder of one expiring long VIX future gains an extra 1.3 x $1,000 = $1,300 from the settlement mechanic alone.

Related: vix-futures, special-opening-quotation, final-settlement, vix-term-structure, banging-the-close

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