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Volatility Index: Difference between revisions
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(Created page with "== Overview == The Volatility Index, often referred to as the VIX, is a real-time market index representing the market's expectations for volatility over the coming 30 days. Investors use the VIX to measure the level of risk, fear, or stress in the market when making investment decisions. Financial markets are inherently volatile, and the VIX is a tool used to quantify this volatility. == Understanding the Volatility Index == The Volatility Index wa...") |
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The Volatility Index was introduced by the [[Chicago Board Options Exchange|Chicago Board Options Exchange (CBOE)]] in 1993. It is constructed using the implied volatilities of a wide range of S&P 500 index options. The VIX is a measure of expected future volatility. It is often referred to as the "fear gauge" or "fear index" as it is a proxy for the market's expectation of stock market volatility over the next 30-day period. | The Volatility Index was introduced by the [[Chicago Board Options Exchange|Chicago Board Options Exchange (CBOE)]] in 1993. It is constructed using the implied volatilities of a wide range of S&P 500 index options. The VIX is a measure of expected future volatility. It is often referred to as the "fear gauge" or "fear index" as it is a proxy for the market's expectation of stock market volatility over the next 30-day period. | ||
[[Image:Detail-145511.jpg|thumb|center|A line graph showing the fluctuations in the Volatility Index over a period of time.]] | |||
== Calculation of the Volatility Index == | == Calculation of the Volatility Index == | ||