Global market turmoil has pushed a key measure of expected stock market volatility to levels not seen since the height of the pandemic—and before that, the 2008 financial crisis.
The CBOE Volatility Index, known as the VIX, soared to 54 on Monday, the highest level since 2020. It had settled at 23.4 on Friday, which was the first time in over six months that it had closed the day out above its longterm average of 20.
Some upbeat news on the services-sector helped calm fears down later Monday morning, and the VIX pared back the increase to 33.96. That is the highest level since October 2020.
The VIX is based on options prices tied to the S&P 500. It is considered a measure of expected volatility. It tends to rise sharply in market sell-offs, giving it the nickname of ‘fear index’ or ‘fear gauge.’
In March of 2020, as much of the economy went into lockdown, the VIX climbed to around 80. It reached a similar level as Lehman Brothers collapsed and other Wall Street firms teetered on the brink in the fall of 2008.
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