The Fear Gauge Fades As Markets Expect Calmer Waters

The Volatility Index is retreating as investors price in reduced near-term uncertainty and smaller price swings.

Source: DepositPhotos

The volatility index often called the “fear gauge”  shows what investors are expecting volatility to be in the short term. It estimates what the stock market expects for price fluctuations and uncertainty over a rolling 3-month horizon. With the index down compared with earlier this year, investors are pricing in less near-term uncertainty and smaller expected market swings.

Source: Chicago Board Options Exchange 

This graph was produced by Lucas Juery, CFA, CFPⓇ and is not intended to provide financial advice.

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