Wall Street

What Is the VIX? Why Is It Important?

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By TheStreet Staff What Is the VIX and How Does It Measure Volatility?In finance, the term VIX is short for the Chicago Board of Exchange’s Volatility Index. This index measures S&P 500 index options and is used as an overall benchmark forvolatility in the stock market. The higher the index level, the choppier the trading environment, which makes its other nickname pretty apt: the fear index. It’s important to point out that the VIX measures implied, or theoretical, volatility. It measures the expectation of future volatility based on a snapshot of the previous 30 days’ worth of trading activi…

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