Summary Box: Resurgence of market’s fear gauge suggests volatility likely to linger
By APSaturday, May 8, 2010
Summary Box: Wall Street’s fear gauge surges again
TAKING FEAR’S TEMPERATURE: The Chicago Board of Options Exchange’s Volatility Index is known as Wall Street’s fear gauge. It reflects expectations about swings in stock prices over the next 30 days. It’s based on how much investors are willing to pay for options that offer protection from falling stocks. When stocks fall, the VIX rises.
WHERE IT IS NOW: It rose 25 percent on Friday afternoon to 40.95. On Thursday, it spiked 32 percent.
WHERE IT WAS: Last week, the VIX was trading near its historic average of 19.
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