Definition
The VIX, often called the 'fear index,' measures the market's expectation of 30-day volatility implied by S&P 500 options prices. When investors expect turbulence, they buy more options for protection, driving up VIX. Typical VIX readings are 12-20 during calm markets, 20-30 during uncertainty, and can spike above 80 during crises. VIX tends to move inversely to the S&P 500. Traders use VIX futures and options to hedge portfolio risk or speculate on volatility.
Formula
Example
In March 2020, VIX spiked to 82 during the COVID crash - the highest since 2008. By comparison, during calm 2017, VIX averaged around 11. VIX above 30 generally indicates significant market fear.
FAQ
What is VIX?
The CBOE Volatility Index measuring expected S&P 500 volatility over 30 days.
How do you calculate VIX?
A common formula for VIX is: VIX通过标普500期权价格计算，使用隐含波动率的复杂加权平均
Why is VIX important?
VIX helps investors evaluate risk metrics and make more informed decisions.