Volatility Index VIX 1/7/09 - January 7, 2009

The Volatility Index ( VIX ) has spiked with today's ( 1/7/09 ) downtrend. After plunging below 40, the VIX is hitting 42.66 at 2:30pm est.

What is the VIX and what does it tell us?

The CBOE Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by SP 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility.

The recent low for the VIX was recorded on 1/2/09 in which the VIX hit 36.88. During the 2008 stock market crash the VIX hit as high as 89.53 which was recorded on 10/24/08.

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