#VIX fear index and what it means with all its dates#VIX 1M chart;
The VIX (Volatility Index) is an indicator that measures the expected volatility of the market and is often referred to as the " fear index ".
In short, low values indicate a calm market, while high values indicate a tense market with higher stress levels.
By the way, this chart is mainly used by those who trade in the options market.
So what's it going to do for us? Let's see.
The VIX is usually inversely correlated with the S&P 500 index. In other words, it is negatively correlated.
When is the VIX chart triggered?
* Financial crises and economic uncertainty.
* Major corporate bankruptcies or scandals.
* Geopolitical tensions and war threats.
* Large-scale events such as natural disasters or pandemics.
* Major central bank decisions and interest rate changes.
The dates and events I have indicated in the chart;
* October 1998 : Russian debt crisis and the collapse of the Long-Term Capital Management (LTCM) hedge fund.
* July 2002 : Dot-com bubble burst and accounting scandals (Enron, WorldCom).
* October 2008 : Global financial crisis, bankruptcy of Lehman Brothers.
* May 2010 : Flash Crash - a sudden and massive drop in the US stock market.
* August 2011 : US credit rating downgraded.
* August 2015 : China's economic slowdown and market volatility.
* February 2018 : Inflation fears in the US and a sudden drop in stocks.
* March 2020 : The shock of the COVID-19 pandemic on global markets.
* August 2024 : Bank of Japan's first rate hike in many years.
Here are the details of what two of the above terms mean and why they may have an impact on the markets;
What is a Flash Crash?
On May 6, 2010, an extraordinary event occurred on the US stock markets that lasted only minutes, but caused severe price fluctuations and sudden drops in market values. During this event, the Dow Jones Index fell by about 1000 points in a few minutes and recovered shortly afterwards. It became clear how unprepared the markets were for such an extraordinary event. This continued the domino effect.
Who is Lehman Brothers? Why would its bankruptcy have an impact on the markets?
Lehman Brothers was considered one of the most prestigious investment banks on Wall Street, with a huge influence around the world. Therefore, we can say that such a bankruptcy during the 2008 real estate crisis had the effect of throwing fire on the global markets.
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