one more stupidity about VIX. Your knowledge base is very, very...

one more stupidity about VIX. Your knowledge base is very, very small.

What is the VIX Index? - Definition: The VIX is a number derived from the option premium prices in the S&P 500 index (an index that includes 500 large cap stocks).It is a good indicator of the expectation of market volatility, note I said "expectation", it is not representative of actual volatility or what will happen. This is a very important point; it is just a general assumption based on the premiums investors are willing to pay for the right to buy or sell stocks.This premium in options can loosely be defined as risk. Just as with other forms of insurance, the greater the risk, the higher the premiums, and the lower the risk, the lower the premiums. When the option premium falls, the VIX falls, and when premiums rise, the VIX rises.The VIX is not set by a single person, but rather is the result of millions of transactions by millions of traders from around the world. Buyers and sellers move option prices, more buyers and premiums go up, more sellers and premiums go down. The VIX takes a weighted average of all these option prices in the S&P 500 index and derives a single number called the VIX. This one VIX number gives us a general idea of whether investors are paying more or less for the right to buy or sell the S&P 500 index.