VIX Hits Levels not Seen Since Height of Eurozone Crisis

Market volatility is back, but it is important to recognize what the VIX is actually measuring when you see stocks whipping around to better understand what the market is anticipating. Tim Edwards, Director of Index Investment Strategy at S&P Dow Jones Indices tells The Street’s Jill Malandrino the VIX represents the 30-day implied volatility of options in the S&P 500, which may sound confusing to the retail investor. The best way to look at it is a low VIX indicates less movement in the S&P 500, while a higher VIX means the market anticipates more movement. The VIX is a broad market indicator and not representative of Russell and Nasdaq stocks that have gotten a lot of attention. Edwards explains you can’t technically trade the VIX itself, but gives examples of other instruments you can look at to take advantage of a higher volatility environment.