Volatility Index (VIX)
The Volatility Index (VIX), also known as the "Fear Index," measures expected stock market volatility over the next 30 days based on S&P 500 options prices.
Key Insights from the VIX:
- High VIX (above 30): Indicates market uncertainty, fear, or potential downturns
- Low VIX (below 20): Suggests market stability and investor confidence
- Often used by traders to hedge against market swings or speculate on volatility
The VIX is widely followed by investors, as sharp spikes can signal market sell-offs or economic stress.