What it is
The Fear and Greed Index is a composite indicator developed by CNNMoney that attempts to quantify the dominant emotions driving the stock market. It combines seven individual market indicators, including stock price momentum, stock price strength, put and call options, junk bond demand, market volatility (VIX), safe haven demand, and breadth of stock price advances and declines. The index ranges from 0 (Extreme Fear) to 100 (Extreme Greed).
Traders and investors often use the Fear and Greed Index as a contrarian indicator. Extreme fear readings might suggest that stocks are oversold and due for a rebound, presenting potential buying opportunities. Conversely, extreme greed could signal that the market is overbought and due for a correction, prompting caution. While useful for gauging sentiment, it should be used in conjunction with other analysis and not as a standalone trading signal.
Why it matters
It provides a quick snapshot of overall market sentiment, helping you understand if investors are overly optimistic or pessimistic. This can inform your market timing.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice