The VIX: Reading the ‘Fear Gauge’
The VIX is built from what traders pay for options — a live read on how much turbulence the market expects. Here's what it measures, why it usually runs high, and how to use it without getting fooled.
The VIX is the market's most-watched "fear gauge." In plain terms it is a number, published live, that estimates how big a swing traders expect in the US stock market over the next month. A low VIX means the market expects calm; a high VIX means it expects turbulence. It tends to spike when stocks fall hard and fade when they grind higher, which is why it is often described as fear made into a number.
Where the number comes from
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