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Options trading The stock market’s fear gauge is spiking — now near its highest level since financial crisis


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Options trading The stock market’s fear gauge is spiking — now near its highest level since financial crisis

Getty Images / Drew Angerer The Cboe Volatility Index, or VIX, surged to as high as 76 on Monday — near levels last seen during the financial crisis.  The index is the preferred measure of fear on Wall Street, and it generally spikes during times of heightened buying or selling. On Monday, US stocks declined…

Options trading The stock market’s fear gauge is spiking — now near its highest level since financial crisis

Options trading

options trading trader screen volatilityGetty Images / Drew Angerer

  • The Cboe Volatility Index, or VIX, surged to as high as 76 on Monday — near levels last seen during the financial crisis. 
  • The index is the preferred measure of fear on Wall Street, and it generally spikes during times of heightened buying or selling.
  • On Monday, US stocks declined sharply as investors shrugged off the Fed’s emergency action on Sunday, showing there’s worry the stimulus won’t be enough to offset negative economic impact of the coronavirus pandemic.
  • Watch the VIX live on Markets Insider.
  • Read more on Business Insider.

A measure of fear in the US stock market spiked again Monday near levels last seen in 2008 after the Fed’s emergency actions on Sunday failed to calm investor nerves amid the coronavirus pandemic. 

The Cboe Volatility Index, or VIX, surged to as high as 76 on Monday. That’s short of the index high of nearly 90, set in October 2008. One week ago on Monday, the VIX surged to its highest level since December 2008, and it has remained elevated since. 

Wall Street’s favorite fear gauge measures options to weigh traders’ expectations for volatility in the coming 30-day period. It generally spikes during selling or buying frenzies.

Read more: Goldman Sachs studied every bear market in stocks since 1835 — and concluded that 3 red flags make this coronavirus-driven one unlike any other in history

On Monday, US stocks declined as investors shrugged off the Fed’s Sunday emergency rate cut and other measures to stimulate the coronavirus-stricken economy. The S&P 500 fell as much as 8%, hitting a circuit breaker and halting trading for 15 minutes. 

It was the third time that trading for US stocks has been paused in one week. Volatility has been high as last Thursday US stocks recorded the biggest plunge since the market crash in 1987, then one day later rebounded.

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“Markets will continue going through this phase of extreme volatility until they are able to assess the scale of damage caused by the virus outbreak,” Hussein Sayed, chief market strategist at FXTM, told Business Insider. 

options trading vixMarkets Insider

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