Back to: Stocks and Options Trading Course (Basic)
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O10F – CS | What Is the VIX®?
In this lesson, you’ll learn what the Cboe Volatility Index (VIX) measures and why traders call it the market’s “fear gauge.” We’ll cover how the VIX reflects expected 30-day volatility in the S&P 500, why it often rises when stocks fall, and how you can use it to read market sentiment and think about options pricing.
- What the VIX measures and where the data comes from
- Why it’s nicknamed the market’s “fear gauge”
- Why the VIX typically rises when stocks sell off
- How traders use the VIX to gauge sentiment and price options
A rising VIX doesn’t just mean traders are nervous — it also changes options prices across the board, which is why this concept comes up constantly once you start trading options.
Assignment: Read *Chapter 16 | Pages 225-238 | Discovering Screening Tools (Stock Investing for Dummies)