The Cboe Volatility Index (VIX), commonly known as the fear index, measures the market's expectation of short-term volatility among stocks. Based on S&P 500 index options with near-term expiration dates, the VIX can project 30 days' worth of volatility expectations. The VIX spiked early in March, reaching nearly 28—its highest level since August 2024—amid investor uncertainty about potential tariffs, cuts to federal programs, and much more.
While fear (or volatility) can be devastating to markets, investors may also see a spike in the VIX as an opportunity to make a sophisticated but risky bet on the index itself. While it's not possible to invest in the VIX directly, investors can buy shares of exchange-traded funds (ETFs) or notes (ETNs) that track the index.
