What Is VIX? The Fear Index Explained
The VIX (CBOE Volatility Index) is the stock market's "fear gauge." It measures how much volatility investors expect over the next 30 days based on options prices on the S&P 500.
How to Read VIX
- VIX below 15 — Calm: Investors are complacent. Markets are stable. Historically this can precede sudden volatility.
- VIX 15–25 — Normal: Typical market uncertainty. No extreme fear or complacency.
- VIX 25–35 — Elevated fear: Significant market stress. Investors are worried.
- VIX above 35 — Panic: Major market event (crash, crisis). Often a contrarian buying signal historically.
Why VIX Moves Opposite to Stocks
When markets fall, investors rush to buy put options (downside protection), which drives up options prices and pushes VIX higher. When markets rise, demand for protection falls and VIX drops. This is why VIX typically spikes during market crashes.
How Investors Use VIX
A very high VIX (above 35–40) often marks market bottoms historically, because extreme fear tends to be a contrarian signal. StocksRankings tracks VIX daily as part of our Market Mood Ranking.
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Frequently Asked Questions
What is VIX?
VIX (CBOE Volatility Index) is the stock market's 'fear gauge.' It measures how much volatility investors expect over the next 30 days based on S&P 500 options prices.
What does a high VIX mean?
VIX above 35 signals panic — a major market event such as a crash or crisis. Historically, very high VIX readings above 35–40 often mark market bottoms and can be a contrarian buying signal.
What does a low VIX mean?
VIX below 15 indicates calm markets — investors are complacent. While this signals stability, it can sometimes precede sudden volatility because fear is absent.