The U.S. government shutdown has injected a new layer of uncertainty into the markets, yet volatility has barely flinched. For traders, that disconnect between headline risk and implied volatility may represent an opportunity hiding in plain sight.
The CBOE Volatility Index ($VIX) — often referred to as Wall Street’s “fear gauge” — tracks the market’s expectations for 30-day volatility in the S&P 500 Index ($SPX) based on option prices. When traders grow anxious, VIX spikes; when they’re complacent, it falls.
