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Volatility Index (VIX)

Glossary

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.