I cannot wrap my head around how do the VIX options work. For example SPY, simple and easy, there is a basket of stocks, and when you buy one share of SPY you own a little piece of every of 500 blue chips. If you buy options for SPY, you have a 100 X leverage of that 500 blue chip basket. Simple.
Now, VIX....there is no basket behind it. When I buy 1 option contract (not future, but option), then what exactly happens behind the scenes? What does the CBOE do when they receive money I paid for one option of VIX?