The VIX, also known as the “Volatility Index” or “Fear Gauge” measures the market’s expectations for volatility over the next 30 days, based on S&P 500 Options pricing. A high VIX reading suggests increased uncertainty or fear in the market, while a low VIX indicates stability or complacency. Traders use the VIX to assess risk, hedge portfolios, or anticipate market moves. It often spikes during financial crises or major news events. While originally tied to Equities, volatility indices have become useful across multiple asset classes, helping traders manage positions during turbulent conditions and adjust strategies accordingly.
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Investors monitor the volatility index to gauge overall market fear levels.
