DeutschWhat is the VIX?
The VIX, also known as the Volatility Index, measures the market’s expectation of volatility over the next 30 days, often referred to as the “fear gauge.”
Explanation:
The VIX is derived from the prices of S&P 500 index options and reflects investor sentiment and market risk. A high VIX indicates high volatility and uncertainty, while a low VIX suggests a stable market.
Practical Example of the VIX:
During periods of market turmoil, the VIX spikes, indicating increased investor fear and expected volatility. Traders might use this information to hedge their portfolios or take advantage of volatility-based trading strategies.
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