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VIX volatility index

The volatility S&P 500 options are pricing for the next 30 days, as an annualised percentage. Often called the fear gauge: it rises when markets fall.

The VIX is calculated from the prices of S&P 500 options. When investors pay more for protection against falls, implied volatility and the VIX rise.

A VIX of 15 implies the market expects the S&P 500 to move within about plus or minus 4% over the next month roughly two-thirds of the time (15 divided by the square root of 12).

Why it matters

Readings below about 15 indicate calm markets; above 30 has marked periods of stress such as 2008, 2020 and sharp sell-offs. The VIX tends to spike quickly and fall back slowly. A rise is not a loss: it is a measure of expected movement in either direction.

See the data: VIX.

General information, not advice.