VIX (CBOE Volatility Index)
The CBOE Volatility Index, a real-time measure of expected S&P 500 volatility over the next 30 days derived from option prices, often called the fear gauge.
What is VIX?
The VIX, published by the Chicago Board Options Exchange (CBOE), measures the market's expectation of volatility in the S&P 500 index over the next 30 days. It is calculated using real-time S&P 500 option prices across a wide range of strikes and expiries, reflecting the implied volatility that option buyers and sellers price into the market. A VIX reading below 20 is generally considered calm; readings between 20–30 indicate elevated uncertainty; readings above 30 signal significant fear, often associated with market selloffs or crises. The VIX is inversely correlated with the S&P 500 — it typically rises when equities fall. It cannot be invested in directly but is tracked through VIX futures and ETPs.
Example
During the COVID-19 market crash in March 2020, the VIX spiked to an intraday high of 85.47 — surpassing even its 2008 financial crisis peak of 89.53 and representing the most extreme fear reading in decades. Options traders were pricing in daily S&P 500 moves of several percent, reflecting deep uncertainty about the economic impact of a global pandemic. The VIX subsequently fell back below 20 within roughly six months as markets recovered.
Source: CBOE — VIX Index