Define “VIX” (Volatility Index) and Its Role as a Fear Gauge in Traditional Finance

The VIX, or Chicago Board Options Exchange Volatility Index, is a real-time market index that represents the market's expectation of 30-day forward-looking volatility. It is calculated from the prices of a basket of S&P 500 index options.

Because volatility often spikes during periods of market stress and uncertainty, the VIX is widely referred to as the "fear gauge." A high VIX indicates market anticipation of significant price movements and high risk.