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. Market professionals refer to this as “implied volatility”-implied because the VIX tracks the options market, where traders make bets about the future performance of different securities and market indices, such as the S&P 500.įor 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. The VIX, formally known as the Chicago Board Options Exchange (CBOE) Volatility Index, measures how much volatility professional investors think the S&P 500 index will experience over the next 30 days. 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.

The VIX volatility index offers insight into how financial professionals are feeling about near-term market conditions. The CBOE Volatility Index-also known as the VIX-is a primary gauge of stock market volatility.

S p 500 low volatility index