CBOE Volatility Index (VIX)

The Cboe Volatility Index (VIX) is an index calculated by the Chicago-based options exchange Cboe that measures the volatility expected in the US stock market over the next thirty days. Its value is derived from the prices of SPX index options; in other words, it reflects the expectation implied by the options market rather than past price movements. The VIX was introduced in 1993, and its calculation method took its current form in 2003.

When uncertainty in markets rises, investors turn to protective options, so the VIX tends to climb; for this reason it is also known as the 'fear index'. In calm periods it moves at relatively low levels. The VIX mostly moves in the opposite direction to stock indices, but this relationship is not equally strong in every period.

The VIX itself cannot be bought or sold directly; futures contracts, options and exchange-traded products linked to it are priced separately and can diverge markedly from the index. On Lzzo.com, the VIX is shown as an index level using Yahoo Finance data; this level expresses annualized expected volatility and is not an asset price.