VIX Index (Fear Gauge)

What the VIX Index is

VIX(Volatility Index) is a volatility index launched by the Chicago Board Options Exchange (CBOE) in 1993 that measures the expected volatility of the S&P 500 over the next 30 days.

Commonly called the "fear gauge", it is the key measure of investor sentiment and market unease. The VIX is calculated from S&P 500 option prices.

Reading VIX levels:

• 0-15: Calm market, low volatility (optimistic mood)
• 15-25: Moderate volatility (worth watching)
• 25-30: Rising market instability
• Above 30: Extreme market fear and high volatility

Methodology

How the VIX is calculated:

Rule of 16: VIX ÷ 16 = expected daily volatility
e.g. VIX 32 → about 2% daily volatility

Products and trading

VIX-linked instruments:

⚠️ Caution: VIX products are unsuitable for long-term holding because of time decay and rollover costs.

Strategies and applications

Main trading strategies:

Using it for market analysis:

Learning resources and tools

A guide for beginners:

Advanced analysis tools: