Question: What is the VIX that I keeping hearing about in the financial news? Answer: The Chicago Board Options Exchange, or CBOE, created the VIX® to measure expected volatility for the US stock market. It is calculated based on the prices of put and call options for the S&P 500® index over a rolling 30-day period and is the global standard for measuring volatility. The VIX® is also known as the Fear Index. It spikes when markets are turbulent, as has been the case in the past two weeks.
Financial Jargon – You Asked…
Question: What does “sell in May and go away” mean? Answer: The stock market has not performed well sometimes during the summer months. Some have suggested that you should sell all of your stocks in May and buy them back after Labor Day. This is not a good idea, however. You should not try to time the stock market. Plus, you could generate capital gains.