Measures market expectations of near-term volatility.
The VIX represents the market's expectation of 30-day forward-looking volatility. Derived from S&P 500 options, it is a primary gauge of market sentiment and stability.
Calculated using S&P 500 index option prices, aggregating weighted prices of puts and calls. Higher premiums for options protection result in a higher VIX reading, indicating expected market variance.
VIX below 15 suggests market stability and a conducive environment for steady growth.
VIX between 15-20 reflects standard market conditions with moderate volatility.
VIX above 30 indicates heightened uncertainty and potential for significant market swings.
Historically, the VIX spikes during periods of significant stress (2008, 2020) and compresses during prolonged bull markets (2017).
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