VIX Climbs Past a Key Level, Signaling Trouble for Stocks
VIX, VOLATILITY INDEX, CHICAGO BOARD OPTIONS EXCHANGE, STOCK MARKET NEWS
Posted By: Jeff Cox | CNBC.com
CNBC.com
| 15 Jun 2009 | 12:14 PM ETThe stock market’s main fear gauge moved past a key level on Monday, indicating possible troubles ahead for the market.
And one options player with deep pockets is making a big bet that volatility will increase sharply, making this a tumultuous summer.
What is VIX?
Investopedia explains VIX – CBOE Volatility Index
The first VIX, introduced by the CBOE in 1993, was a weighted measure of the implied volatility of eight S&P 100 at-the-money put and call options. Ten years later, it expanded to use options based on a broader index, the S&P 500, which allows for a more accurate view of investors’ expectations on future market volatility. VIX values greater than 30 are generally associated with a large amount of volatility as a result of investor fear or uncertainty, while values below 20 generally correspond to less stressful, even complacent, times in the markets.
