The VIX, often called the "Fear Index," measures expected volatility in the S&P 500 over the next 30 days. It is calculated from S&P 500 index option prices by the Chicago Board Options Exchange (CBOE).

How It Works

VIX reflects the market's expectation of annualized volatility. A VIX of 20 implies the market expects the S&P 500 to move about ±1.2% daily. Higher VIX = more expected turbulence.

Key Levels

Mean Reversion

The VIX is strongly mean-reverting—it tends to spike sharply during panic selling but then gradually declines as fear subsides. This characteristic makes it popular for trading strategies.

Market Impact

The VIX moves inversely to the S&P 500 roughly 80% of the time. VIX spikes often coincide with market bottoms, making it a useful contrarian sentiment indicator.