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Cboe Volatility Index
Tue Mar 14, 2023 5:32 pm
The Cboe Volatility Index (VIX) is a measure of expected market volatility over the next 30 days.
The VIX is calculated by the Chicago Board Options Exchange (Cboe) and is often referred to as the "fear index" or "fear gauge" because it tends to rise during times of market uncertainty and panic.
The VIX is based on the prices of options on the S&P 500 index.
Specifically, it measures the implied volatility of a portfolio of S&P 500 index options.
When investors expect the market to be more volatile, they are willing to pay more for options that protect against downside risk, which increases the VIX. Conversely.
When investors expect the market to be less volatile, they are willing to pay less for these options, which decreases the VIX.
The VIX is often used as a measure of market sentiment and risk appetite.
A high VIX reading generally indicates that investors are more fearful and risk-averse, while a low VIX reading indicates that investors are more confident and risk-tolerant.
Traders and investors use the VIX to hedge against or speculate on market volatility, and some financial products, such as exchange-traded funds (ETFs), are designed to track the VIX.
The VIX is calculated by the Chicago Board Options Exchange (Cboe) and is often referred to as the "fear index" or "fear gauge" because it tends to rise during times of market uncertainty and panic.
The VIX is based on the prices of options on the S&P 500 index.
Specifically, it measures the implied volatility of a portfolio of S&P 500 index options.
When investors expect the market to be more volatile, they are willing to pay more for options that protect against downside risk, which increases the VIX. Conversely.
When investors expect the market to be less volatile, they are willing to pay less for these options, which decreases the VIX.
The VIX is often used as a measure of market sentiment and risk appetite.
A high VIX reading generally indicates that investors are more fearful and risk-averse, while a low VIX reading indicates that investors are more confident and risk-tolerant.
Traders and investors use the VIX to hedge against or speculate on market volatility, and some financial products, such as exchange-traded funds (ETFs), are designed to track the VIX.
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