The CBOE Volatility Index, better known as VIX, projects the probable range of movement in the U.S. equity markets, above and below their current level, in the immediate future. Specifically, VIX measures the implied volatility of the S&P 500® (SPX) for the next 30 days. When implied volatility is high, the VIX level is high and the range of likely values is broad. When implied volatility is low, the VIX level is low and the range is narrow.

Since VIX reaches its highest levels when the stock market is most unsettled, the media tend to refer to VIX as a fear gauge. In the sense that VIX is a measure of sentiment—of worry in particular—the description is on the mark.

VIX and the S&P 500 typically move in opposite directions, with VIX anticipating the S&P 500’s behavior 30 days out. See how both indices have responded to major financial events.

The Fear Levels:

0-15 : Low
15-20 : Moderate
20-25 : Medium High
25-30 : High
30 And Above:Extreme

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