CBOE Market Volatility Index (VIX)

May 05, 2021

The CBOE 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.

Interpretation: When the VIX rises, it indicates that traders expect the S&P 500 Index to become more volatile. The higher the VIX, the higher the fear, which, according to market contrarians, is considered a buy signal. A falling VIX indicates that traders in the options market expect the S&P 500 Index to trade more quietly. In the same respect, the lower the VIX, the lower the fear, indicating a more complacent market.