What is the VIX?

The CBOE Volatility Index, commonly known as the VIX, is a real-time market index representing the market's expectations for volatility over the coming 30 days based on S&P 500 index options. It is universally referred to as the stock market's "fear gauge."

Unlike standard stock indexes that measure price growth, the VIX measures market risk and investor sentiment. A low VIX generally indicates a stable, complacent market, while a high VIX indicates fear, uncertainty, and rapid price swings. It is a crucial tool for traders hedging against market downturns.

Ticker: ^VIX

Curiosity: The VIX operates inversely to the stock market. Wall Street has a famous saying for this: "When the VIX is high, it's time to buy. When the VIX is low, look out below!"