Low VIX is not a causal factor for an SPX collapse, but an SPX collapse is a causal factor for high VIX. At VIX Trader, we don’t care because we plan to feast when volatility spikes, as it inevitably will, but here are the facts as they stand today. We could interpret that to mean that we have 30 days of low volatility ahead of us; well at least that’s what the traders of the SPX (S&P 500 Index) are leading us to believe. And if the index is very high, extreme volatility would be expected. Devised by the Chicago Spikes in the VIX and outlier days, drive up that average. What a week for the VIX...new 7 year low, now trading with a 10 handle (closed at 10.73), with a two day drop of 16% post ECB announcement last Thursday. The VIX is back to the low levels we saw last summer/fall before a nasty decline ensued. But the corollary scenario of the market falling in response to low VIX levels has not tended to occur. The S&P 500 topped on April 26 and dropped 17% thereafter. Traders are not as likely to be buying insurance on stocks. … The predictive nature of the VIX makes it a measure of implied volatility, not one that is based off historical data or […] A low VIX in 2010 and 2011 always spelled trouble for stocks. Net VIX exposure is sitting near its all-time low. November 2017 INDEX INVESTMENT STRATEGY 3 500 realized volatility3 between Dec. 31, 2016, and Nov. 22, 2017. ... Low VIX readings, in fact, are indicative of complacency, which almost always leads to declines that surprise the market. While we know that the average VIX price is ~19.50, that does not necessarily mean that that translates to “normal” stock market volatility. If the index is higher, limited future volatility would be expected. VIX Spike Could Mean Near-Term Stock Weakness Not only has the VIX doubled year-to-date, it has doubled off its low over the past month. The VIX index is currently sitting at its first percentile range. VIX -- The Chicago Board Options Exchange Volatility Index, or VIX, as it is better known, is used by stock and options traders to gauge the market's anxiety level. What is the VIX and what does it mean? Ron DeLegge, ... Low VIX readings, in fact, are indicative of complacency, which almost always leads to declines that surprise the market. VIX (blue, left axis) vs. S&P 500 (red, right axis) So why does this matter? …the VIX has spent over half of its time over the past two decades (from 1992 through Tuesday) between 10-20. A Really Low VIX Doesn’t Mean It Can’t Go Lower. Woodshedder Sun Aug 19, ... You’ll note the Trading Markets and WSJ posts simply note that the VIX is low, that it has been low before, and that it could go lower, or not. The VIX closed at a low today, not seen since July 7th, 2011. VIX/S&P 500 in 2010. Naively, if the VIX index is low, one would expect the volatility in the market several months in the future to be low. 1) Just because the VIX is low doesn’t necessarily mean the market can’t continue to move higher — a lesson illustrated vividly by various data points above and the entire 2004-2006 period. What does a VIX of 80 mean? Does a Falling VIX Mean the Worst is Over? VIX (NYSEARCA:VXX) traders shorting the VIX have had a great year so far, VIX Trader included, but one can only wonder how long can this party go on? In the wake of Twitter rants and and nuclear missile tests, the stock market has succeeded in doing something it hasn't done in almost 2.5 decades.The VIX is at its lowest point in 24 years. The VIX is based on data collected by the Chicago Board Options Exchange (CBOE).Each day the CBOE calculates a figure for a "synthetic option" based on prices paid for puts and calls.The computation of the VIX was changed in 2003 and is based on the S&P 500 option series. In fact a good portion (about 1/3) of the S&P gains over the last 10 years have come under these conditions. VIX is the ticker symbol and the popular name for the Chicago Board Options Exchange's CBOE Volatility Index, a popular measure of the stock market's expectation of volatility based on S&P 500 index options.It is calculated and disseminated on a real-time basis by the CBOE, and is often referred to as the fear index or fear gauge.. In the simplest possible terms, it means that the market expects daily moves in the equity markets to be around four times larger than normal. What does a low VIX mean for stocks? What is the VIX and does its recent drop mean the worst is over? To sum up - just because the VIX is “low” doesn’t mean the market is about to fall. The CBOE Volatility Index (VIX) is a measure of expected price fluctuations in the S&P 500 Index options over the next 30 days. There is also a misconception that the VIX value is a one-for-one estimation of the percentage change expected in the S&P 500. The drop from the mid-30's on December 24th to the low teens in less than three months time is historic. On the other hand, a low VIX value of less than 30 suggests that the market will be range-bound and there is complacency among investors. VIX continues to plumb new lows. So what does that mean? SP 500 e-mini futures have had 13 straight trading days without a down day, Next week's at the money SPY put options closed at an implied volatility of 7.86%, first time I can ever remember SPY options trading below 8% implied vol.So what does t This is one indicator that doesn’t work as well on bottoms as it does on tops. A low VIX doesn’t necessarily mean the stock market is nearing a top—or even a speed bump. I think we can dig deeper than that. Reading VIX: Does VIX Predict Future Volatility? 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