VIX
MarketsDefinition
Cboe Volatility Index — a real-time measure of expected S&P 500 volatility over the next 30 days, derived from S&P 500 options prices. Often called the "fear gauge."
Below 15 = calm. 15-25 = normal. 25-35 = nervous. Above 35 = panic. Long-run average ~19. VIX spikes are usually short-lived; selling vol after a spike has been one of the most reliable historical trades, but tail-risk events (Feb 2018 XIV blowup, March 2020) wipe out unhedged short-vol books.
Below 15 = calm. 15-25 = normal. 25-35 = nervous. Above 35 = panic. Long-run average ~19. VIX spikes are usually short-lived; selling vol after a spike has been one of the most reliable historical trades, but tail-risk events (Feb 2018 XIV blowup, March 2020) wipe out unhedged short-vol books.
Example
VIX = 18 means options markets are pricing in ~18%/year volatility for the S&P 500 over the next month. On a $5,000 SPX index, that implies a ±1-sigma daily move of about 0.5%, or ±3% over a typical month.