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Volatility (VIX - CBOE Vola Index)

"VIX - CBOE Volatility Index" (May 2015)

The first VIX, introduced by the CBOE in 1993, was a weighted measure of the implied volatility of eight S&P 100 at-the-money put and call options. Ten years later, it expanded to use options based on a broader index, the S&P 500, which allows for a more accurate view of investors' expectations on future market volatility. VIX values greater than 30 are generally associated with a large amount of volatility as a result of investor fear or uncertainty, while values below 20 generally correspond to less stressful, even complacent, times in the markets.

the VIX as it is now can be seen in the following chart (as marked the VIX made its lows in the past years around the 10 - 13 level):


final remarks (mainly taken from following site: )
The VIX typically moves higher when stocks plunge. Investors would turn to S&P 500 options to protect their portfolios against any sudden dips.

But be careful: Volatility products are designed to “roll” the contracts over periodically to maintain exposure to VIX futures. They can lose money on this trade when longer-dated contracts are more expensive than the front-month contract, or when markets are said to be in “contango.”