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Get to know the VIX Index (aka "The Fear Index")
Rating: 4.5 out of 5(205 ratings)
1,515 students

Get to know the VIX Index (aka "The Fear Index")

The VIX Index is one of the most watched indexes in the markets. Learn how VIX measures "Fear" and its impact on Options
Created byHari Swaminathan
Last updated 12/2019
English

What you'll learn

  • Learn about the all-important VIX Index
  • What does certain levels of VIX mean
  • How is the VIX calculated
  • What is the relationship between the VIX index and the SPX Index
  • How does the VIX measure "fear" in the markets
  • What does high VIX levels do to Option prices (see what happened in the 2008 crisis)
  • What strategies are ideal in a low or medium VIX environment
  • What strategies are ideal in a high VIX environment
  • What to watch out for in a high VIX environment

Course content

2 sections • 10 lectures • 1h 19m total length

  • Introduction to The VIX Index or Fear Index1:31
  • Course Agenda and General Discussion of the VIX Index9:48
    Introduction to the VIX Index and Course agenda. Why is it called the "Fear" index
  • History of the VIX Index13:10
    Background of the VIX index, its correlationships to the S&P 500 Index from a historic and current perspective.
  • Calculation of the VIX Index8:15
    The design and calculation of the VIX index. Most importantly, what are the practical insights we can glean from its mathematical design.

Requirements

  • Basic stock markets and trading knowledge
  • Basic Options knowledge

Description


THE VIX ("FEAR") VOLATILITY  INDEX

The VIX is one of the  most watched indicators in the markets, even by professionals. We take a look  at what this index is, Understanding VIX method of computation, and how this Index is  interpreted on a day-to-day basis in practical terms. We look at overall market  correlations with the VIX since the index was created in the 1990's. The VIX  may be called a Volatility Index, but it acts more like a Fear index in the  markets. The key lies in understanding the relationship of the VIX index to the  S&P 500 Options. 

A high or low level  of VIX impacts all S&P 500 Options as well as individual stocks. This  course looks at the example of the financial crisis of 2008 in detail when the  VIX levels spiked to unprecedented levels, and the impact it had on Options  prices. Every Options trader must watch the VIX index.

There are several  other Volatility indexes that track Volatility in the markets, and we cover the  important ones. It's hard to be a good investor if you don't follow the VIX.  Get the complete skinny here, this course is all action!!

What you will master

  • Why is the VIX called a Fear Index and why is it feared

  • Why is it the most watched index in the market

  • How  is this calculated

  • VIX values and the S&P (non)correlations in the early 1990's

  • VIX values and strong correlations in the late 1990's and since

  • What does a high value of VIX do to Option prices

  • Flashback - lets got to 2008 and see what high VIX levels can do

  • What is the relationship of the VIX to the VIX Futures

  • Why is the Options on the VIX not a good trading vehicle

 

 

Who this course is for:

  • All stock and Options traders
  • A must for any Options trader that trades major indices, ETFs and major stocks

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