![]() ![]() The VIX can help investors gauge market sentiment as well as volatility to identify investment opportunities. ![]() That's why it's a good idea to use the VIX in tandem with technical and fundamental analysis. ![]() One thing to keep in mind is that current volatility cannot be known ahead of time. If the VIX is falling, there's less demand, and options prices tend to fall. If the VIX is rising, demand for options is increasing, and therefore, becoming more expensive. The performance of the VIX is inversely related to the S&P 500 – when the price of the VIX goes up, the price of the S&P 500 usually goes down. The VIX is often referred to as the market’s “fear index or fear gauge”. While the VIX only measures the volatility of the S&P 500 Index, it has become a benchmark for the U.S. It can help investors estimate how much the S&P 500 Index will fluctuate in the next 30 days. The price of this option is based on the prices of near-term S&P 500 options traded on CBOE. The Volatility Index or VIX is the annualized implied volatility of a hypothetical S&P 500 stock option with 30 days to expiration. ![]()
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