VIX
The VIX is derived from the prices of S&P 500 index options and reflects how much volatility the market expects over the next 30 days, on an annualized basis. The higher the reading, the more investors are willing to pay for insurance.
How to read it
A rough scale: below 15 is calm, around 20 is normal with some tension, above 30 is panic. The historical extremes came in 2008 and 2020, at more than 80.
The VIX usually moves opposite to stocks: when the market drops sharply, the VIX spikes.
The VIX divided by 16 roughly equals the daily percentage move in the S&P 500 that the market expects. At a VIX of 16, the expected daily move is about 1% up or down.
Common pitfalls
- The VIX measures expected volatility, not direction. A low VIX does not mean stocks will rise; it only means the market isn't worried.
On FinDog
The ticker strip at the top of every page shows the latest VIX reading and its change on the day. The Daily Wrap mentions the day's volatility in its summary.
Read today's Daily Wrap →Related terms
- Market BreadthMarket breadth measures how many stocks are taking part in a rally or a decline. Common indicators include the advance/decline ratio, the share of stocks trading above their 50-day moving average, and the number of stocks hitting new 52-week highs and lows.
- BetaBeta measures how much a stock moves relative to the overall market. A beta of 1 means it moves in step with the market; 1.5 means it moves 1.5% on average when the market moves 1%; below 1 means it is steadier than the market.