The Cboe Volatility Index, with the ticker symbol VIX, is a standard risk indicator used by financial traders. The VIX is also known as the stock market fear gauge index. How does the VIX work as a risk indicator? The VIX is calculated using a formula to derive expected volatility by averaging the weighted prices of out-of-the-money puts and calls. Bearish or pessimistic investor sentiment is represented in the options market by...
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