VIX futures provide a pure play on the level of expected volatility. Expressing a long or short sentiment may involve buying or selling VIX futures. Alternatively, VIX options may provide similar means to position a portfolio for potential increases or decreases in anticipated volatility. The formula used by Cboe to calculate the price of VIX is rather complex, and the price of VIX is updated live during trading hours every 15 seconds.

Stock Market News for May 7, 2025

The Fear & Greed Index is a compilation of seven different indicators that measure some aspect of stock market behavior. They are market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand. The index tracks how much these individual indicators deviate from their averages compared to how much they normally diverge. The index gives each indicator equal weighting in calculating a score from 0 to 100, with 100 representing maximum greediness and 0 signaling maximum fear. The most well-known measure of market sentiment is the CBOE Volatility Index, or VIX. The VIX measures expected price fluctuations or volatility in the S&P 500 Index options over the next 30 days.

Click the “+” icon in the first column (on the left) to view more data for the selected symbol. Scroll through widgets of the different content available for the symbol. The “More Data” widgets are also available from the Links column of the right side of the data table. Experts understand what the VIX is telling them through the lens of mean reversion. In finance, mean reversion is a key principle that suggests asset prices generally remain close to their long-term averages. If prices gain a great deal very quickly, or fall very far, very rapidly, the principle of mean reversion suggests they should snap back to their long-term average before long.

Volatility Indices

It helps market participants gauge potential risks and make informed trading decisions, such as whether to hedge or make directional trades. While the VIX itself is an index and cannot be traded, there are funds and notes investors and traders can participate in to gain exposure to the index. But the reward for investing in stocks over the long haul is greater. Safe Haven Demand shows the difference between Treasury bond and stock returns over the past 20 trading days. The Fear & Greed Index uses increasing safe haven demand as a signal for Fear. Just keep in mind that with investing, there’s no way to predict future stock market performance or time the market.

• Only SPX options are considered whose expiry period lies within more than 23 days and less than 37 days.
• The CBOE Volatility Index (VIX) quantifies market expectations of volatility, providing investors and traders with insight into market sentiment.
• To spare you the math headache involved with calculating the price, let’s look instead at the data used to calculate it.
• There are a range of different securities based on the CBOE Volatility Index that provide investors with exposure to the VIX.
• Bond yields – or the return you get on investing in a bond – dip when prices go up.

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Volatility S&P 500 Index

The VIX volatility index offers insight into how financial professionals are feeling about near-term market conditions. Understanding how the VIX works and what it’s saying can help short-term traders tweak their portfolios and get a feel for where the market is headed. Over long periods, index options have tended to price in slightly more uncertainty than the market ultimately realizes. Specifically, the expected volatility implied by SPX option prices tends to trade at a premium relative to subsequent realized volatility in the S&P 500 Index. Market participants have used VIX futures and options to capitalize on this general difference between expected (implied) and realized (actual) volatility, and other types of volatility arbitrage strategies.

The theory is based on the logic that excessive fear tends to drive down share prices, and too much greed tends to have the opposite effect. Downside risk can be adequately hedged by buying put options, the price of which depends on market volatility. Astute investors tend to buy options when the VIX is relatively xm broker low and put premiums are cheap.

VIX and its 50-day moving average

The VIX is merely a suggestion, and it’s been proven to be wrong about the future direction of markets nearly as often as it’s been right. That’s why most everyday investors are best served by regularly investing in diversified, low-cost index funds and letting dollar-cost averaging smooth out any pricing swings over the long term. One of the most popular and accessible of these is the ProShares VIX Short-Term Futures ETF (VIXY), which is based on VIX futures contracts with a 30-day maturity. The VIX index measures volatility by tracking trading in S&P 500 options. Large institutional investors hedge their portfolios using S&P 500 options to position themselves as winners whether the market goes up or down, and the VIX index follows these trades to gauge market volatility. The CBOE Volatility Index—also known as the VIX—is a primary gauge of stock market volatility.

CBOE Volatility Index .VIX:Exchange

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Term Structure Trading

• For instance, a stock having a beta of +1.5 indicates that it is theoretically 50% more volatile than the market.
• Examples include the CBOE Short-Term Volatility Index (VIX9D), which reflects the nine-day expected volatility of the S&P 500 Index; the CBOE S&P Month Volatility Index (VIX3M); and the CBOE S&P Month Volatility Index (VIX6M).
• The VIX index is specifically measuring expected volatility for another index, the S&P 500.
• The CBOE Volatility Index (VIX) is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 Index (SPX).

To spare you the math headache involved with calculating the price, let’s look instead at the data used to calculate it. The VIX index is specifically measuring expected Online gold trading volatility for another index, the S&P 500. True to its name, the S&P 500 index is composed of 500 of the largest publicly traded companies in the U.S. Because the S&P 500 includes so many large companies across several different market sectors, it is generally viewed as a good indication of how the U.S. stock market is performing overall. Junk bonds carry a higher risk of default compared to other bonds.

The VIX often drops on days when the broader market rallies and soars when stocks plunge. It tends to be lower in bull markets and higher when the bears are in control. The Fear & Greed Index uses increasing market volatility as a signal for Fear. When investors trade options, they are essentially placing bets on where they think the price of a specific security will go. In many cases, large institutional LexaTrade Broker investors will use options trading to hedge their current positions.

Greater volatility means that an index or security is seeing bigger price changes—higher or lower—over shorter periods of time. For people watching the VIX index, it’s understood that the S&P 500 stands in for “the stock market” or “the market” as a whole. When the VIX index moves higher, this reflects the fact that professional investors are responding to more price volatility in the S&P 500 in particular and markets more generally. When the VIX declines, investors are betting there will be smaller price moves up or down in the S&P 500, which implies calmer markets and less uncertainty. The index is more commonly known by its ticker symbol and is often referred to simply as “the VIX.” It was created by the CBOE Options Exchange and is maintained by CBOE Global Markets.

Our estimates are based on past market performance, and past performance is not a guarantee of future performance. Technicals are calculated and updated every 20 minutes during the trading day using delayed market data. Examples include the CBOE Short-Term Volatility Index (VIX9D), which reflects the nine-day expected volatility of the S&P 500 Index; the CBOE S&P Month Volatility Index (VIX3M); and the CBOE S&P Month Volatility Index (VIX6M). Products based on other market indexes include the Nasdaq-100 Volatility Index (VXN); the CBOE DJIA Volatility Index (VXD); and the CBOE Russell 2000 Volatility Index (RVX). Unique to Barchart.com, data tables contain an option that allows you to see more data for the symbol without leaving the page.