VIX (Volatility Index)
A measure of the market’s expectation of 30-day volatility, constructed from the implied volatilities of a wide range of S&P 500 index options. The VIX is widely used as a gauge of market risk and is often called the ‘investor fear gauge’.
Related terms
Implied Volatility
The market’s expectation of future volatility derived from option prices. Higher implied volatility suggests greater expected price swings.
Read full definitionVolatility
The degree of price fluctuation in a currency over a specific period. Higher volatility means larger price swings and greater uncertainty in exchange rates, making it a key measure of FX market risk.
Read full definitionSPX500 (S&P 500)
A name for the S&P index, which tracks 500 of the largest companies on the NYSE and Nasdaq stock exchanges.
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Adjustment
The impact on a share price of a company paying out dividends on the ex-date. The price takes a slight dip because money flows out of the company to shareholders, with the dividend adjustment occurring at the close of business before the ex-dividend date.
Read full definitionAUS 200
A term for the Australian Securities Exchange index (ASX 200), which tracks the top 200 companies by market capitalisation listed on the Australian stock exchange.
Read full definitionBear Market
Any market that experiences a fall of around 20% or more from its recent high. Most commonly applied to stock markets, the term can also be used for anything traded, including currencies and commodities. It is the opposite of a bull market.
Read full definitionBonds
A fixed-income investment representing a loan made by an investor to a borrower, typically corporate or governmental. It works like an I.O.U. between lender and borrower that includes the details of the loan and its payments.
Read full definitionBull Market
Any market in which prices are rising or expected to rise imminently. Typically applied to stock markets, the term can also be used for anything traded, including currencies and commodities. It is the opposite of a bear market.
Read full definitionCash Market
A marketplace where securities are paid for and delivered immediately at the point of sale. A stock exchange is a cash market because investors receive their shares as soon as they have paid for them.
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