ELIYATE FINANCE
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Market Explainer 03
What Is the VIX?
The VIX is an index designed to reflect the market’s expectation of near-term volatility in the S&P 500 based on options prices.
Key points
- Often called the market’s ‘fear gauge’.
- Higher readings generally imply higher expected volatility.
- It does not directly predict whether stocks will rise or fall.
- It is derived from options pricing, not a survey.
Why it matters: Understanding this term can help beginners interpret market news and financial commentary more clearly.