VIX has a particular significance in relation to IG's platform. Here, we define VIX in general investing and explain what it means to you when trading with IG.
English
VIX definition
VIX is short for the Chicago Board Options Exchange Volatility Index. It is a measure used to track volatility on the S&P 500 index, and is the most well-known volatility index on the markets.
A volatility index is a measure of a particular market’s likelihood of making sudden, unexpected price movements, or its relative instability. The VIX does this by aggregating the implied volatility on a set number of put and call options based on the S&P 500.
The implied volatility of these options is used to calculate a numerical figure for overall 30-day volatility of the S&P 500, which is in turn used as an indicator of general market sentiment. If the VIX gives a value of greater than 30 then the market is seen as volatile, while under 20 is believed to be calm.
Other volatility indices
As well as the VIX, the Chicago Board Options Exchange has launched:
- the VXN, which tracks the Nasdaq 100 index
- the VXD, which tracks the Dow Jones Industrial Average Index
Other major indices around the world will often have their own volatility index.
With IG
Our indices trading includes both the VIX, listed under Volatility Index, and the EU Volatility Index.* Find them listed alongside other indices on our platform.
*We price our Volatility Index (VIX) and EU Volatility Index contracts in a different way to the rest of our cash index markets. Rather than aiming to replicate the underlying index price, we follow the method used to derive our undated commodity prices. This means that there is a difference between our undated price and the underlying index price on these markets. Funding is also calculated in line with the undated commodity method. Please see our overnight funding page for more details.
Visit our indices section
Find out more about indices trading.
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