Use the VIX Calculator by CBOE to Estimate the Range of the S&P 500 Index Over the Next 30 Days

The VIX® Index, created by Cboe, is a calculation designed to produce a measure of constant, 30-day expected volatility of the U.S. stock market, derived from real-time, mid-quote prices of S&P 500® Index (SPX℠) call and put options. On a global basis, it is one of the most recognized measures of volatility -- widely reported by financial media and closely followed by a variety of market participants as a daily market indicator. The VIX Index works by aggregating the weighted prices of S&P 500 Index (SPX℠) puts and calls over a wide range of strike prices and then calculating an estimate of the expected volatility for the next 30 days. Many have learned, for example, that the VIX Index generally has an inverse relationship to the S&P 500 Index. When the VIX Index goes up, the S&P 500 Index tends to go down and vice versa. Because of this characteristic, The Fear Gauge, as the VIX Index is sometimes called, has allowed market participants to more easily ascertain market sentiment, construct options strategies and possibly identify unique potential risk-reward opportunities. Cboe offers a variety of tradable assets, like Mini VIX Futures, which can provide market participants a means to obtain expected equity market volatility exposure. Additionally, the VIX Calculator, a tool that derives an estimate of the expected price range of the S&P 500 Index over the next 30 days based on specific user inputs, is also available on the Cboe website.

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