VIXindeks

The VIX index, officially the Cboe Volatility Index, is a real-time market measure of the expected volatility of the U.S. stock market over the next 30 days, as implied by S&P 500 options. It is commonly referred to as the “fear gauge” because it tends to rise when market stress increases and fall when markets calm.

Calculation and interpretation: The VIX is calculated by the Cboe from a broad range of S&P 500 option prices, using near-term and next-term options to derive an estimate of the expected variance and then taking the square root to express a 30-day volatility figure. The result is an annualized standard deviation, expressed as a percentage. The VIX reflects market expectations rather than realized past volatility and is non-directional.

Characteristics: A higher VIX indicates greater expected volatility and risk aversion among investors, while a lower VIX suggests calmer markets. Readings are not a forecast of market direction; they signify the magnitude of anticipated fluctuations.

Usage and related products: The VIX is widely used by traders, portfolio managers, and financial media as a gauge of market sentiment and risk. There are related instruments, including VIX futures and VIX options traded on the Cboe, which allow investors to trade or hedge against expected changes in volatility. The VIX term structure and derivatives are commonly watched as indicators of how market expectations for volatility evolve over time.

History: The concept originated with earlier volatility measures based on option prices and evolved into the VIX that uses S&P 500 options. The current VIX framework was established in the early 2000s, with the index widely recognized as a benchmark for market fear and uncertainty.