What Is Risk‑On / Risk‑Off? Definition and Example
Risk-on and risk-off describe whether investors are reaching for growth or running for safety. Here is what each looks like across markets, with real data from stress months.
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What Is the VIX? Definition and Example
The VIX is the market’s own estimate of how much the S&P 500 will swing over the next 30 days. Here is how to read it, with its long-run history.
Key takeaways
- The VIX is the Cboe Volatility Index, a measure of the S&P 500’s expected volatility over the next 30 days, implied by option prices. From 1990 to Oct 2026 its daily close averaged 19.4.
- Its record close was 82.69 on March 16, 2020. It closed above 30 on about 8% of trading days since 1990.
- The VIX tells you how nervous the options market is, not which way stocks will move next.
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What is the VIX?
The VIX is calculated by Cboe from the prices of S&P 500 index options. According to the Cboe VIX FAQ, it estimates expected volatility over the next 30 days and is forward‑looking, unlike historical (realized) volatility. It is often called the “fear gauge” because it jumps when investors pay up for protection.
See how this fits the current market: a risk reading, cross‑asset context and an events calendar in Exent Market intel.
How do you read the VIX number?
The VIX is an annualized percentage. A rough rule: divide it by about 3.5 (the square root of 12) to get the expected one‑month move. Illustrative: a VIX of 20 implies a typical monthly move of about ±5.8% in the S&P 500 index.
What has the VIX done historically?
Exent’s calculation from FRED daily VIX closes, Jan 1990 to Oct 8, 2026:
| Measure | Value |
|---|---|
| Average close | 19.4 |
| Median close | 17.6 |
| Record close | 82.69 (Mar 16, 2020) |
| 2008 crisis peak close | 80.86 (Nov 20, 2008) |
| April 2025 tariff selloff peak close | 52.33 (Apr 8, 2025) |
| Lowest close | 9.14 (Nov 3, 2017) |
| Days closing above 30 | about 8% |
| Days closing below 15 | about 32% |
Why it matters for a self‑directed investor
A high VIX means options are expensive and big daily moves are likely. That is useful context before you add, trim or hedge, because protection costs most exactly when you want it. See VIX hedging and the cost of hedging.
Common mistakes
- Reading a low VIX as “safe”. The record low close of 9.14 in Nov 2017 was followed by a close of 37.32 on Feb 5, 2018.
- Thinking you can buy the VIX itself. It is an index; VIX futures and ETFs behave differently.
- Treating it as a direction signal. It measures expected size of moves, up or down.
Frequently asked questions
Since 1990 the VIX has had a median close of about 17.6 and an average of about 19.4. Readings above 30 have occurred on roughly 8% of days.
The highest daily close was 82.69 on March 16, 2020, during the COVID crash. The 2008 crisis peak close was 80.86.
No. A high VIX usually comes after stocks have already fallen and signals large expected moves in either direction.
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Educational content, not investment advice. Examples are illustrative; past performance does not guarantee future results.