Just over a week ago, investors were shook from their bullish sleep. The major indexes inexplicably plunged lower as panicked investors scrambled to dump stocks. The fear-gauge, or VIX index, spiked to 50 — a level not seen in nearly a decade — signaling extreme financial terror in the equity markets. Now, a week later, things have stabilized with the VIX retreating to the 18 zone. However, it is still 100% above its lows of this month. The severe moves have refocused stock investors on this somewhat obscure index/indicator. Not since the financial crisis of 2008 have so many investors… Read More
Just over a week ago, investors were shook from their bullish sleep. The major indexes inexplicably plunged lower as panicked investors scrambled to dump stocks. The fear-gauge, or VIX index, spiked to 50 — a level not seen in nearly a decade — signaling extreme financial terror in the equity markets. Now, a week later, things have stabilized with the VIX retreating to the 18 zone. However, it is still 100% above its lows of this month. The severe moves have refocused stock investors on this somewhat obscure index/indicator. Not since the financial crisis of 2008 have so many investors needed to understand what the VIX is all about. #-ad_banner-# What Is The VIX? The VIX, short for CBOE Volatility Index, was derived in 1993 by Professor Robert Whatley. Initially, the VIX was based on the OEX 100 index, but now it uses the S&P 500 as the base index. The VIX is created via a weighted mix of prices for a variety of options on the S&P 500. The options are priced on the expected volatility or price change over the next month. Therefore, the VIX is designed to predict volatility over the next 30 days. An excellent… Read More