why is it called the VIX

Discussion in 'Trading' started by empee, Apr 2, 2008.

  1. empee


    vix = volatility index. Really has nothing to do with volatility, should be fear or something. Look at yesterday almost +400 dow day and vix is way lower.

    I understand how its calculated its just annoying that its called a volatility index and its anything but. Plus when people on tv talk about market volatility (but of course only when its down not up). Ie "volatile markets" are ones when things go down. Its the start of the next bull leg if its volatile and up

  2. cgar


    It mostly acts inverse to the market.Big selloff equates to more fear, hence higher VIX readings.

    Implied vol is what it represents.Go read about it on CBOE website,there are some papers about how it is constructed.They will tell you more than you ever wanted to know.
  3. they also call it the "fear index".
  4. Its calculated off the implied volatility in options on the S and P what else would you call it?
  5. empee


    Retard: listen, if its truely a volatility index than it should spike on +400 as much as -400. Clearly it doesn't do this; yes I know why, but thats the whole point. its NOT a volatility index.
  6. Implied volatility goes down on those days. IV got crushed yesterday LOL.
  7. Very simple, really. They take the implied volatility of the OEX 100 options vs. the historical volatility. When people are paying high for calls andputs, then we will likely have bigger market moves than when they are trading closer to historical vol ranges.

    And, that can be "fear" to some, and "opportunity" to others. A good indicator nonetheless.

  8. Lighten up on the retard talk, especially when you are coming out looking like the idiot.

    VIX is not a VOLATILITY index it is an IMPLIED VOLATILITY index and the difference is significant when discussing options. IMPLIED VOLATILITY often has little or nothing to do with actual statistical volatility.

    People here are trying to enlighten you and you act like you already know it all.
  9. Wow, you should really consider losing your ET login. It's a weighting of the SPX strips. Look at the vol-change on any strike.

    You're confusing realized and implied volatility.
  10. Good replies folks, its easy to lob childish insults from behind screen names, only the most insecure of people would be bothered by them.

    Don its interesting to look at how they have changed the calculation of the years especially to account with the big volatility skew in the S and P index.
    #10     Apr 2, 2008