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Stock Market News for Feb 6, 2025
Focusing specifically on options tied to the S&P 500 Index, the VIX is derived from the implied volatility embedded within these options’ prices. Implied volatility refers to the market’s perception of future price fluctuations of the S&P 500 Index. Consequently, the VIX acts as a thermometer of market sentiment, reflecting the level of fear or complacency among investors. The VIX, or CBOE Volatility Index, plays a pivotal role by quantifying market volatility and investor sentiment.
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For example, OTM put options help protect against downside risk and become more expensive when investors anticipate a decline in the S&P 500. The VIX calculates a weighted average of implied volatilities across a range of strike prices for these options, providing an estimate https://www.forex-reviews.org/ of expected volatility over the next 30 days. In reality, investors, traders and analysts use VIX for various purposes.
What is the Cboe Volatility Index (VIX)?
- New Highs/Lows only includes stocks traded on NYSE, NYSE Arca, Nasdaq or OTC-US exchanges with over 5 days of prices, with a last price above $0.25 and below $10,000, and with volume greater than 1000 shares.
- These options are particularly useful in capturing future expectations of extreme price movements.
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- The chart shows that high values of the index (blue) led to larger subsequent 30 day BTC returns.
- For example, portfolio managers may use VIX-linked instruments to hedge risks or manage volatility.
- All information and data on the website is for reference only and no historical data shall be considered as the basis for judging future trends.
For the major indices on the site, this widget shows the percentage of stocks contained in the index that are above their 20-Day, 50-Day, 100-Day, 150-Day, and 200-Day Moving Averages. This section shows the Highs and Lows over the past 1, 3 and 12-Month periods. Click the “See More” link to see the full Performance Report page with expanded historical information. The Barchart Technical Opinion rating is a 64% Sell with a Strengthening short term outlook on maintaining the current direction.
- As long as prices remain above the average there is strength in the market.
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- We covered an avalanche of Intel (INTC) calls in Thursday’s newsletter with a caveat that serves as a great lesson today.
- In markets like this, the best approach is to structure trades that can handle big swings.
- Many trading systems utilize moving averages as independent variables and market analysts frequently use moving averages to confirm technical breakouts.
VIX news
The VIX typically spikes during or in anticipation of a stock market correction. The higher the VIX goes, the more volatile things are expected to be. Market volatility, volume and system availability may delay account access and trade executions. Webull Financial LLC is a CFTC registered Futures Commission Merchant with the Commodity Futures Trading Commission (CFTC) and a Member of the National Futures Association (NFA). Futures and futures options trading involves substantial risk and is not suitable for all investors.
Computed from S&P 500 Index options, the VIX offers valuable insights into the level of fear or complacency among market participants. With its significance ranging from risk management to options trading, the VIX has earned its place as a critical indicator in the arsenal of financial professionals. Bankrate.com is an independent, advertising-supported publisher and comparison service.
As the Federal Reserve is expected to cut interest rates, investors are seeking defensive strategies, and the Utilities Select Sector SPDR Fund (XLU) stands out as a reliable option, offering stability,… Volatility has tanked since the election, with the VIX Index closing at 14.02 yesterday. When volatility is low, options become cheaper, so today we’re taking a look at the Long Straddle Screener. Please bear with us as we address this and Forex best pairs to trade restore your personalized lists.
The VIX, short for the CBOE Volatility Index, is a real-time gauge of expected market volatility over the next 30 days. Published by the Chicago Board Options Exchange (CBOE), the VIX provides a numerical measure of how much fluctuation traders anticipate in the S&P 500 index over the coming month. Often termed Wall Street’s “fear gauge,” the VIX aims to quantify uncertainty and investor anxiety using formulaic calculations based on S&P 500 options. This article explains the VIX methodology, examines what drives volatility projections, and explores how traders use the VIX to velocity trade inform decisions and hedge bets. By peering into the VIX calculation, we can better understand market psychology and gain an edge in turbulent times. The VIX has roots in options which are financial derivatives providing investors with the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified time frame.
Recent News: ^VIX
The VIX derives from a range of S&P 500 Index options with different expiration dates, using a weighted average of their implied volatilities. Specifically, the VIX calculation involves out-of-the-money options more sensitive to sentiment changes. The CBOE calculates their implied volatilities and weights each option’s contribution. Subsequently, the VIX is a percentage representing expected 30-day volatility in the S&P 500 Index. The VIX is an index that measures expectations about future volatility. It tends to rise during times of market stress, making it an effective hedging tool for active traders.
New and potentially disruptive policies from President Donald Trump are likely to create near-term volatility in ag futures market prices. One tool analysts use to measure this fear is the VIX, often called the “Fear Index,” published by the Chicago Board Options Exchange (CBOE). It should be noted that these are rough guidelines ⏤ unexpected events can throw a wrench into markets and a low VIX level today could be followed by a period of extreme volatility if circumstances change.
Though it can’t be invested in directly, you can purchase ETFs that track the VIX. When its level gets to 20 or higher, expectations are that volatility will be above normal over the coming weeks. Volatility is a statistical measure based on how much an asset’s price moves in either direction and is often used to measure the riskiness of an asset or security. That much is understood by most investors, but what exactly is volatility and how is it measured for the overall stock market? You may have seen references to something called the VIX, an index that measures volatility, during times of extreme financial stress.
