The VIX Volatility Index was introduced to investors in 1993. Today the index posted an all-time low weekly closing price of 9.31.
The price of the index reflects the market’s expectation of 30-day volatility in put and call options on the SP 500 stocks. It’s a widely used measure of market risk and often referred to as the “investor fear gauge”.
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A price on the VIX greater than 30.00 is generally associated with high market volatility driven by investor uncertainty, while a value of 20.00 or lower corresponds to complacency in the market.
As a point of reference, the VIX has not posted a closing value above 20.00 in over 8 months.
With the SP 500 index trading near all-time highs on declining volume, it’s reasonable to expect a material increase in market volatility over the medium-term.
VIX Index
