Published On: Tue, Jan 29th, 2013

CBOE Volatility Index (VIX)

The CBOE Volatility Index (VIX) is a widely used indicator or the implied volatility of the broader US market as measured by the S&P 500 index options.

The VIX index is set to increase in value when the implied volatility of the S&P500 index options increases in value.  The VIX number is often considered to be a fear gauge, acting as a fear index.  Consequently, when the VIX number goes to elevated levels, it is thought that market participants are expressing added anxiety as to the US stock market (and often time US economy) as a whole.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.