VIX Fear & Greed
The Fear Index and the cost of insurance.
The VIX (CBOE Volatility Index) measures the market's expectation of 30-day volatility derived from S&P 500 option prices. It is often referred to as the 'Fear Gauge'. When the VIX is high, fear is dominant; when low, complacency reigns.
Interpreting Levels
Key Thresholds
- VIX < 15: Bullish regime, low fear, potential complacency.
- VIX 20-25: Normal volatility, caution warranted.
- VIX > 30: High fear, panic selling, often marks a bottom.
The Fear & Greed Index
Often combined with the VIX, CNN's Fear & Greed Index aggregates 7 indicators (including Junk Bond Demand and Market Momentum) to provide a single sentiment score from 0 (Extreme Fear) to 100 (Extreme Greed).
Key Takeaways
VIX measures the price of options (insurance), not just 'fear'.
Extreme high VIX readings are often buying opportunities.
Low VIX periods can persist for years (bull markets).
VIX Fear & Greed
The Fear Index and the cost of insurance.
The VIX (CBOE Volatility Index) measures the market's expectation of 30-day volatility derived from S&P 500 option prices. It is often referred to as the 'Fear Gauge'. When the VIX is high, fear is dominant; when low, complacency reigns.
Table of Contents
Interpreting Levels
Key Thresholds
- VIX < 15: Bullish regime, low fear, potential complacency.
- VIX 20-25: Normal volatility, caution warranted.
- VIX > 30: High fear, panic selling, often marks a bottom.
The Fear & Greed Index
Often combined with the VIX, CNN's Fear & Greed Index aggregates 7 indicators (including Junk Bond Demand and Market Momentum) to provide a single sentiment score from 0 (Extreme Fear) to 100 (Extreme Greed).
Key Takeaways
VIX measures the price of options (insurance), not just 'fear'.
Extreme high VIX readings are often buying opportunities.
Low VIX periods can persist for years (bull markets).
Apply This Knowledge
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