What it is
The VIX, officially known as the CBOE Volatility Index, is a popular measure of the stock market's expectation of volatility based on S&P 500 index options. It is often referred to as the "fear gauge" because it tends to rise when investors anticipate market turbulence or economic uncertainty. A high VIX reading indicates increased fear and uncertainty, while a low reading suggests complacency.
The VIX is widely watched by investors as an indicator of market sentiment and potential future market movements. Spikes in the VIX often coincide with significant market downturns or periods of heightened economic stress. Investors can trade VIX futures and options to hedge portfolios or speculate on future market volatility. Understanding the VIX helps interpret broad market sentiment.
Why it matters
The VIX provides a quick snapshot of market fear or complacency, helping you gauge overall market sentiment and potential for volatility.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice