The Volatility Index 75 or usually called VIX is a stock market index that shows the estimated volatility of the stock market over the next 30 days. It is calculated and managed by the Chicago Board Options Exchange (CBOE). The calculation is based on the buy and sell options of the S&P 500 Index that is investor sentiment from the S&P 500 Index. In essence, if the value of the Volatility Index increases, it means that the volatility in the stock market will increase in the next 30 days. If the value decreases, volatility in the stock market is expected to decrease in the next 30 days. You can read more about it at http://www.volatility75.net/.
A VIX value above 20 means that the volatility will be high, while a value below 20 means that the volatility will be low. Volatility is where market prices fluctuate rapidly and sharply. These conditions present a lot of trading opportunities as well as a lot of risks. Most traders, including big fish in stock trading, take advantage of volatile market conditions to commit murder. The Volatility Index (VIX) is useful for dealing with the high-risk nature of high volatility markets. The index then helps predict how volatility will occur in advance so you can prepare for it. This means that traders from ranging markets will shrink while those who prefer high volatility will anticipate increases if the Volatility Index (VIX) signals rising fluctuations.
Even though the Volatility Index (VIX) is an index or measure of volatility, it can be traded as an asset on the stock market. In the same way, products that are linked to an index can also be traded using the indices taken from the index. VIX trading involves investing money based on the direction of volatility as measured by an index. By doing so, you anticipate making or losing money. There are two ways to make money trading Volatility Indices that are volatility index (VIX) options trading and trade VIX exchange-traded products.