When the VIX is low...

The Volatility Index (VIX), or Chicago Board of Options Exchange Volatility Index, is an interesting technical instrument and one that can prove helpful when trying to time market tops and bottoms.

It measures the 'implied volatility' of S&P 500 options and is said to provide an indicator for measuring investor nervousness about options linked to the S&P 500.

A sharp increase or decrease in volatility builds excess needing to be worked out in the same way as in other financial instruments.

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