What Is Volatility? Meet The VIX, Or Volatility Index

What Is Volatility? Meet The VIX, Or Volatility Index

Fear is running high on Wall Street. Just look at the Fear Index.

With all those stomach-churning free falls and sharp reversals in the stock market recently, traders are keeping a nervous eye on an obscure index known as the VIX.

The VIX (officially the Chicago Board Options Exchange Volatility Index) measures volatility, the technical term for those wrenching market swings. A rising VIX is usually regarded as a sign that fear, rather than greed, is ruling the market. The higher the VIX goes, the more unhinged the market looks.

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