What does the VIX indicate about market sentiment and volatility?
What does the VIX indicate about market sentiment and volatility?
The VIX indicates expected market volatility based on S&P 500 options pricing, reflecting investor sentiment. A high VIX signifies increased fear and uncertainty in the market, suggesting potential downturns ahead. Conversely, a low VIX points to a stable market environment with lower perceived risk. Investors use changes in VIX levels to anticipate market movements and adjust their investment strategies accordingly.