“There are periods when a given market pegs so far to one extreme or the other that it becomes hard to ignore. Such is the case with the market that measures fear – known by stock investors the world over as ‘VIX.’ VIX is telling us that fear – at least as it relates to stock prices – is dirt cheap. With what we know about markets and human nature, we do not expect fear to remain cheap forever. VIX is the symbol for the Chicago Board Options Exchange (CBOE) Volatility Index. It measures the volatility embedded into options traded on the S&P 500 (SPX) and reflects investors’ 30-day consensus view of the future.”
