What Is VIX? CBOE Market Volatility Index

what is the vix?

Miranda Marquit has been covering personal finance, investing and business topics for almost 15 years. She has contributed to numerous outlets, including NPR, Marketwatch, U.S. News & World Report and HuffPost. Miranda is completing her MBA and lives in Idaho, where she enjoys spending time with her son playing board games, travel and the outdoors. Volatility values, investors’ fears, and VIX values all move up when the market is falling. The reverse is true when the market advances—the index values, fear, and volatility decline. The VIX was introduced by the CBOE in 1993, providing the first standard tool for tracking market volatility.

When the Measures of Fear Show No Investor Fear

what is the vix?

Because the S&P 500 includes so many large companies across several different market sectors, it is generally viewed as a good indication of how the U.S. stock market is performing overall. Instead, investors can take a position in VIX through futures or options contracts, or through VIX-based exchange-traded products (ETPs). Such VIX-linked instruments allow pure volatility exposure and have created a new asset class. They provide investors with exposure to volatility without having to deal with the complexities of trading alpari review futures or options.

Volatility is a statistical measure based on how much an asset’s price moves in either direction and is often used to measure the riskiness of an asset or security. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances.

What Is the VIX? This ‘Fear Index’ Is Used for Active Investing

Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. One of competitive, consistent institutional trading the most popular and accessible of these is the ProShares VIX Short-Term Futures ETF (VIXY), which is based on VIX futures contracts with a 30-day maturity. Some exchange-traded securities let you speculate on implied volatility up to six months in the future, such as the iPath S&P 500 VIX Mid-Term Futures ETN (VXZ), which invests in VIX futures with four- to seven-month maturities. The CBOE Volatility Index—also known as the VIX—is a primary gauge of stock market volatility. The VIX volatility index offers insight into how financial professionals are feeling about near-term market conditions.

The Chicago Board of Options Exchange Market Volatility Index (VIX) is a measure of implied volatility, based on the prices of a basket of S&P 500 Index options with 30 days to expiration. The CBOE Volatility Index (VIX) is a measure of expected price fluctuations in the S&P 500 Index options over the next 30 days. The VIX, often referred to as the “fear index,” is calculated in real time by the Chicago Board Options Exchange (CBOE). That much is understood by most investors, but what exactly is volatility and how is it measured for the overall stock market? You may have seen references to something called the VIX, an index that measures volatility, during times of extreme financial stress.

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The VIX was the first benchmark index introduced by CCOE to measure the market’s expectation of future volatility. A financial professional will offer guidance based on the information provided and offer a no-obligation call to better understand your situation. The articles and research support materials available on this site are educational and are not intended to be investment or tax advice. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. For information pertaining to the registration status of 11 Financial, please contact the state securities regulators for those states in which 11 Financial maintains a registration filing. 11 Financial may only transact business in those states in which it is registered, How to buy gbtc or qualifies for an exemption or exclusion from registration requirements.

What Is the VIX?

  1. In the last month, major stock indexes like the S&P 500 have been pulled downward as a result of disappointing earnings reports from big tech stocks.
  2. You may have seen references to something called the VIX, an index that measures volatility, during times of extreme financial stress.
  3. Sentiment plays a big role in decision making for the stock markets, and to that extent, it could be a good idea to glance at the VIX.
  4. The VIX index tracks the tendency of the S&P 500 to move away from and then revert to the mean.
  5. But VIX-tracking funds are typically used by day traders and tend to be extraordinarily risky.

Remember, market conditions are dynamic and influenced by a myriad of factors beyond the VIX. While there’s no universally agreed-upon “high” or “low” VIX level, historical data provides context. Readings above 30 are generally considered high, suggesting significant market uncertainty. However, these are guidelines, and interpretation should always consider the broader economic and geopolitical landscape.

投稿日: 2022年12月26日運営長崎真珠