February 14, 2013 at 09:00 AM EST
How ETF Traders Can Use The VIX Index
Investors and traders alike have surely run across the Volatility Index, commonly referred to as the VIX, in headlines from time to time. Many are quick to overlook this valuable indicator since they may not understand how it works, or how to use it to help forecast stock prices. However, this so-called “fear index” offers insight into the direction of stock prices, both as a confirmation signal and to aid in predicting stock market turning points [Download 101 ETF Lessons Every Financial Advisor Should Learn]. What Is the VIX? The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) began trading in 1993, and is designed to measure the 30-day implied volatility of the S&P 500. The value is attained through calculations involving S&P 500 option contracts, which are bets based on the future value of the index [see How To Swing Trade ETFs]. The VIX moves inversely to the S&P 500 Index, [...] Click here to read the original article on ETFdb.com. Related Posts: Daily ETF Roundup: Stocks Post Worst One-Day Drop In 2013 Daily ETF Roundup: Stocks Pull Back On Fed And Lackluster GDP Daily ETF Roundup: Stocks Surge On Fiscal Cliff Deal Favorite ETF Positions For 5 Super Investors Daily ETF Roundup: Excitement Simmers On Mixed News
Investors and traders alike have surely run across the Volatility Index, commonly referred to as the VIX, in headlines from time to time. Many are quick to overlook this valuable indicator since they may not understand how it works, or how to use it to help forecast stock prices. However, this so-called “fear index” offers insight into the direction of stock prices, both as a confirmation signal and to aid in predicting stock market turning points [Download 101 ETF Lessons Every Financial Advisor Should Learn]. What Is the VIX? The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) began trading in 1993, and is designed to measure the 30-day implied volatility of the S&P 500. The value is attained through calculations involving S&P 500 option contracts, which are bets based on the future value of the index [see How To Swing Trade ETFs]. The VIX moves inversely to the S&P 500 Index, [...]

Click here to read the original article on ETFdb.com.

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