The VIX measures the amount of volatility that professional investors think the S&P500 index will experience over the next 30 days. The VIX tracks the options markets and essentially shows you when US equity traders are putting on puts (expecting lower prices) and cals (expecting higher prices).

So, a very simple and effective tool is to look at the VIX. When the VIX is rising investors are expecting unsettled behaviour ahead and lower stock prices. When the VIX is falling investors are more confident in the stock.


HYCM Lab is a financial analysis source that provides regular insights on how global news affects the markets including forex, commodities, stocks, indices, and cryptocurrencies*. Run by the HYCM team, it equips traders with everything needed to make informed trading decisions.