In summer of turmoil, subdued ‘fear’ gauges make markets uneasy

Financial markets’ fear gauges are not flashing red at a time of serious global turmoil, stirring investor doubts over whether the indexes are mispricing current and future turbulence.

Volatility gauges embedded in option markets are used by traders and investors to predict — or guess — market direction. They can also be useful barometers of the economic and political mood, hence the Cboe Volatility Index – VIX equity volatility index* is dubbed Wall Street’s fear gauge.


*Cboe Volatility Index® represents a measure of the market’s expectation of 30-day forward-looking volatility of the U.S. stock market, derived from real time, mid-quote prices of S&P 500® Index call and put options. The S&P 500® Index is a market capitalization-weighted Index of the 500 largest U.S. publicly traded companies