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A measure of the variation in price over time. Also a measure of the risk of a financial instrument.

7 votes

Why does the VIX index have *any* correlation to the market?

Richardh is spot on. The price of the VIX option is a weighted sum of put (strikes < forward) and call (strikes > forward) options on the S&P 500. The weights are proportional to 1/strike^2. As the S& …
Keith A. Lewis's user avatar