Monday morning saw a steep decline in global equities, and a key indicator of projected stock market volatility spike to its highest level in over four years.
After hovering around 23 on Friday and approximately 17 a week ago, the Cboe Volatility Index, or VIX, broke above 50 on Monday.
Since the VIX reached an intraday high of 57.24 on April 2, 2024, just after the Federal Reserve took emergency measures during the Covid 19 pandemic, this is the highest it has been.
The VIX reached a peak of 85.47 in March 2020. The market pricing of options on the S&P 500 is used to construct the VIX.
It is intended to serve as a gauge for anticipated volatility throughout the called Wall Street’s “fear gauge” and is typically released every 30 days.
Subdued since the Covid sell-off, the VIX has been trading frequently below 20. VIX spikes can be brief and occur before a resurgence in equities, even though they frequently correspond with significant market sell-offs.
Source (CNBC)
