The volatility markets tell us something about the cost of speculating on the size of an asset's price move or the lack their of. If an investor thinks a big move is forthcoming but are unsure of the direction of the move, they might buy volatility. If, on the other hand, they think that the markets may be relatively quiet in the days, weeks or months ahead, they may sell volatility. Investors also use the volatility markets to hedge long positions. When the market prices go up, implied volatility as measured by the VIX and VIX Futures tends to fall. When market prices go down, implied volatility tends to rise. Sometimes it does so very sharply.
