The VIX Index is a measure of market expectations for near-term stock price volatility derived from current market quotes on S&P 500 index options. The VIX is also known as the “Fear Index”. Watching the VIX allows professional portfolio managers to monitor the cost of principal-protecting a stock portfolio.
What is the “Fear Index” and why should I care?
About the Author: Parker Evans, CFA, CFP, CMT
Parker Evans, CFA, CFP, CMT is President of Successful Portfolios LLC, an SEC Registered Investment Advisor Firm based in Clearwater, FL. Parker helps individuals, families, and organizations plan and manage custom investment portfolios at leading brokerages including Charles Schwab, TD Ameritrade, and Interactive Brokers.