The VIX, or Volatility Index, is a widely used measure of market expectations for volatility in the U.S. stock market over the next 30 days, derived from options prices on the S&P 500 Index. Often called the “fear gauge,” the VIX rises during periods of market uncertainty, stress, or sharp price swings, reflecting investor anxiety and demand for portfolio protection. Conversely, a low VIX indicates relative market calm and stability. While not directly a tradable asset, the VIX influences the pricing of derivatives and is used by investors as a tool to hedge risk or speculate on market volatility. It serves as a barometer of sentiment, often inversely correlated with stock market performance.

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Volatility Index (VIX)