The Volatility Index (VIX) Explained
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- Опубликовано: 15 май 2024
- The Volatility Index (VIX) Explained
A very important market indicator within the world of the stock market is the volatility index, or better known as "the VIX". Many traders refer to is as the "fear gauge". What exactly is the VIX and how does it work? Let me explain.
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Thank you Clay, you’re the first to explain it so easy.
Other videos just make a whole mess with the third Friday of the Month, etc.
Great Job!!
Glad to help!
As always great content for teaching newbies virtually.
Thanks for watching
thanks for the info my friend, this was extremely informative in a simple way
Glad it was helpful!
Thank you, this is the explanation I needed.
Glad it was helpful!
Thanks Clay, extremely important for a trader to understand VIX index and watch it daily
Cheers
Thank you for a clear and simple explanation!
You are welcome!
Thanks, Clay. This is a good common sense explanation. No silly formulas for equations. Nice job.
Glad it was helpful!
"Silly formulas."
You're the type that likes to pretend they know things.
@@ClarkPotter "Likes to pretend they know things." What the hell does that even mean???? What's your degree in, and what university did you attend?
@@ClarkPotter Just what I thought. Another idiot lacking higher education trolling the boards, displaying his lack of knowledge, commenting on something he doesn't understand. Get out of your mom's basement and get a degree, simpleton.
Great explanation for simple people like me 👍
Especially right now when vix is skyrocketing. I’m buying now stocks 😊
Thanks for watching.
What do people think about going long on the VIX now
Great explanation, I think I got it now! Thanks bro!
Excellent!
good job of making it easy to understand i wish more people explain things like you do
Glad it helped!
He didn't explain anything!!
Great video, thank you for taking time for making it!
Glad it was helpful!
Muchas gracias por el video! It makes total sense, just like treasury yields falling today and the money coming into the markets, saludos desde Costa Rica 🇨🇷
Well said!
Thanks Clay great easy to understand explanation! 😊
Glad it was helpful!
Thanks for this straight forward explanation!
Cheers
Finally... someone explained this succinctly! Thank you and "Liked".
Glad it helped!
excellent, well done in simple terms.
Thank you! Cheers!
Great job man, thank you
Glad it helped
Thank you for the explanation
You are welcome!
Hey Clay, I know it might be a bit unrelated to the video, but I felt like I should share this. After paper trading for about 2 weeks, I traded with real money for the first time today. I had a good winner with 51$ for my first trade, and a small loss of 12$ for the second trade, but the 3rd trade, I bought a stock at 7.61, and the stock plummeted to 5.65!! I'm sooo happy I had a stop loss in place, as I only risked 11 cents on that trade. Thank goodness I invested in your Risk Vs Reward course!!
Well done! Stop loss's save!!!
thank you for your clear explanation...
Glad it was helpful!
well explained man.
Thanks for watching!
Thank you Mr Clay Trader! I've always enjoyed your videos! So if a Lower Vix is a good indicator that fear in the market is going down. I'm assuming more people would buy stocks and the stock prices will go up, if I'm right.? So what would be a good low fix to start buying? By looking at the charts I'm thinking 18 to 20. Correct me if I'm wrong. Or if a person really can't tell. Thanks
Yes, "true" in a general sense.
Awesome explanation 👍🏾
Glad it was helpful!
Excellent Thank you!
Cheers
Thanks for the Video. I’m super confused still. I’m thinking of buying the ‘S&P 500 VIX short-term futures 2.25x daily lev’ by wisdomtree. It says average hold of a day. Can I just hold it until the market drops or does it not work like that ? I’m thinking of putting 10 into it. It almost seems too good to be true to me? Does it cancel after a day ?
Say if I buy and the market goes up. Can I just wait till it goes down ? Or do I pay something, or does it get cancelled ?
you can hold it for however long you want
Great video! Which VIX ticker do you think is best overall for gauging sentiment and price action? VIX? or UVXY?
Depends on your strategy.
Thank for giving information
Welcome!
nice clean explanation thanks
You are welcome
Thank ya so much clay
You're welcome.
Thanks for the content!
quick question - based on this video, the VIX index is influenced by the price of options only?
Yes.
ty for not over explaining this
Cheers!
Hi Clay, thanks for the wonderful video simplified to the core. So which broker have you encountered that has the best swaps?
if you're interested in "talking stocks/trading in general", you are more than welcomed to join my private community - claytrader.com/team/
@@claytrader Does this come at a fee? What are the rules and main discussions?
@@MatoMkenya did you even click on the link?
@@claytrader Yes, I did and looks like a webinar.
@@MatoMkenya great
Thanks Clay!
Any time!
that was fantastic
Glad it helped
Very good explanation
Thanks!
Great explanation. So how would I apply the VIX movements to my trades. Do I buy when people are fearful and sell when they're not or the reverse?
if you're interested in "talking stocks/trading in general", that's the entire idea behind my private trading community (which you are welcomed to join) you can find it here claytrader.com/team/
great explanation…
Glad it helped!
Thanks for this information; really truly helps. But my question is: to trade vix, do we need to study fundamentals (news etc) or is it purely technical analysis only? Thanks!
Whatever you think is best. No right or wrong answer.
Thank you.
You're welcome!
Excellent, explained well 👍
Glad it was helpful!
@@claytraderThanks Clay, so the more green the index is the higher the fear?
@@Andrew-cn6rc exactly!
@@claytrader Thanks, I was confused by the red at the moment. So red's less fear in the market then? The opposite of what seems normal
@@Andrew-cn6rc exactly... it's a bit backwards and counterintuitive
Would a good strategy be to put profits into the vix when the markets are high, and then sell those (vix)after the markets dip?
Could be. Give it a try with a demo platform.
Amazing
Cheers
I know this is an old video, but does it matter if these are call or put options? bullish or bearish?
Yes, the type of option matters.
How you can protect your money with options ! Is vix the price of option trading?
What? I explain what the VIX is in the video...
Thank You
You're welcome!
Does Vix represents growth stocks or value stocks ?
Everything.
Hi clay, can you just explain what options are. thank you
Thanks for suggestion! Those videos already all exist here claytrader.com/takecontrol
I’m looking for more detail, the numbers how it’s calculated. What’s happening during midday spikes, etc.
It's all based on the options contracts...
I just feel the VIX it's like very similar with stop loss order on CFD contracts
Not really.
can you trade the VIX? Like can I actually buy the VIX and swing trade it?
Yup!
how abt VXNSM for NASDAQ? where can I get the apps?
Online broker's platform.
Which options should a person look at in others more like a correlation technique?
Just look at the VIX.
@@claytrader thank you
@@kevinetafia2133 cheers
Thanks
Welcome
Where did you buy that blackboard? I love it! ❤
FB Marketplace :-)
@@claytrader Could you please give me the name of the manufacturer? Or something else so that I'm able to find it. That would be great. I'd like to buy it for my office. :-) Thanks in advance.
@@omegasigma4500 no idea.. it was totally used.
@@claytrader Okay, thanks anyway.
@@omegasigma4500 cheers
thanks
You're welcome!
Can a stock holder who manages their own portfolio use it for a day or 2 and dump it?
Yup.
Which news to watch for vix?
What do you mean?
Today, both Nasdaq and s&p went up roughly 1% but the VIX also went up by 5%. Isn't that directly opposite to the fear indicator you explained?
Fear does not mean markets automatically go down.
Does the vix go up regardless if what type of options ppl use(and what ditection)? (Puts and calls)...or just puts which protect against downside risk
Both.
It's a measure of price volatility of an aggregated (30 day) options index on the (S&P?). "Volatility" is functionally equivalent to variance; a summation of absolute price differences on either side of some average.
@@benno291980 thank you
Yeah, I wanted to know about the vix, I asked someone else who invest and have a RUclips channel and he didn't know
Hope it helped!
nice!
Thank you! Cheers!
Is vix related only to down market?
No
Why is the VIX still low when put options volumes has spiked? I can't figure out why
Where are you getting your data?
@@claytrader other RUclipsrs tbh - reference to 'max pain' levels showing a significant increase in put buying (which they say will prevent the market from dropping as market makers won't want to pay out all the puts). I would expect that to cause the VIX to spike but it's still fairly low.
@@deano7687 well, "other RUclipsrs" might be a sketchy source...
@@claytrader I've also seen the PCC (put call ratio) is at all time highs... But I guess that just suggests more puts than calls... Still feel like VIX should be spiking
My first thought watching this was "Is that an oil-based marker he's writing with on a blackboard? I hope that erases."
My second thought was "Great video".
LOL... a very valid first thought!
@@claytrader was I right? 😄
@@trentbriggs1198 100%
Any options? Or specific ones becouse people always buy options?
I'm not sure what you mean...
Hi, So the vix goes up from increased options activity your saying, so is that people buying puts to hedge their positions or more calls? What option activity pulls the vix up. Just more volume all together? Thanks
@@JB-cq6ey right
Does every country have options or Vix?
Not sure.
Most countries with stock exchanges have options, but in few countries an equivalent to a VIX exists
@@electrosquid8325 cheers
Is CBOE the same thing as Volatility Index 75?
I believe so.
@@claytrader Thanks man
@@michealfarquharson540 you're welcome
which broker can i use to trade vix in the united states
?
Any of them.
@@claytrader what about volatility index?
@@earthlynao4956 any of them
I enjoyed your video. I knew nothing about incesting and you were able to explain it well. Can you explain what synthetic indicies are? I have read definitions but still do not understand the point or purpose.
thanking you in advance
Tinfoil hat nonsense.
hey clay , I am in France and I am looking for a broker to trade the VIX
What broker do you advise?
I know nothing of your strategy or goals, so it's impossible for me to accurately answer that.
You can trade VIX leveraged ETN like TVIX on IG. Check them out.
PIPS INFINITY you can trade VIX / volaitily on binary
Still don't understand. What are we buying actually. Wich market is it based on
It's based on the VIX market. The VIX market is based on what I described in the video.
Why would people use options if they are nervous about the market? Do you mean they use more put options?
Because options are used to hedge positions against risk.
@@claytrader so you are saying they use option strategies like a straddle or something?
yup
Time to buy UVXY before April 1.
maybe....
@@claytrader it's a gamble for sure
@@Rob-- i'm not here to gamble though
So why did in last 3 weeks SPX500 lost 320 points, and VIX not only didn't move upwards, it moved down 7-8%? Nobody is buying options to protect against marked going down?
Seems so.
Can some one please help and teach me how to locate and count pips manually on mobile for mt5, synthetic indices pairs.. pls
Careful seeking help from random strangers on the internet.
@@claytrader ok thanks, but can u be of help to me about my problem ?
@@macjames1452 i offer a class, but not looking like you want to invest into learning.
@@claytrader i trade already but i need some one to update me on how to count and locate pips manually on mobile phone for mt5 on synthetic indices
@@macjames1452 claytrader.com/team
Are you saying when options prices go up, then VIX is up? Then how about when options prices go down
The opposite
What is the difference between VIX and VIX 75?
Not sure.
Hi Clay, is this still applicable today?
Yes
@@claytrader thank you
@@larryvoke8726 you're welcome
Hello Clay, how can I know when more pple are using options and when they are not?
At what level is it best to buy or sell?can u just give approximate numbers please?
if you're interested in "talking stocks/trading in general", that's the entire idea behind my private trading community (which you are welcomed to join) you can find it here claytrader.com/team/
So high option volume = people are fearful? Could you unpack this a little more?
In what way?
It has more to do with the certainty of a given price, relative to a strike price, over the time being considered. The more volatile prices are over a given time period, the more the stock has shown a "history" of being able to attain relevant price levels, and the greater the premium (option price) asked
@@benno291980 Excellent - thank you!!
This video is inaccurate
wow, even I understand that.
Happy to help!
How does the vix (TVIX) actually get money tho...
What do you mean?
Where is the money coming from that actually makes TVIX go up in value?
The market
Good video overall explaining the volatility, however, your supply & demand analogy is misplaced and misleading; VIX or any ETNs are NOT based on a supply-demand curve, in other words, in ETNs' demand or supply are not factors that drive the price since there's not a finite amount of shares (for lack of a better word). As the name implies it is an INDEX not a stock.
Good content nevertheless.
Cheers.
Thanks for the thoughts.
Claytrader is wrong on this one
@@gustavocervantes154 thanks for the opinion
Lol i was searching for someone to explain to me the VIX, how the VIX is calculated based on underlying contraacts and what contract time frames are used and why.
But i guess this is channel for amateurs.
Yeah, not everyone can be as smart as you. It must be nice to never have been an amateur yourself.
Clay, good explanation thanks for video, please don't use this marker/pen again. it's noise bit annoying.
Noted! Thanks for feedback.
tom needs to hit that GANZA
Interesting.
fuck dude... those markers on the chalkboard gave me chills I couldn't even get 1m in.......
Sorry!
So it's a representation of market sentiment of people who use options. They can't be representative of market as a whole. An average person would keep money in cash when scared.
Well said
Ohhhh. Soooo if the vix is red, we aight. Reversed. I see isee. I hope i understood it properly. 😅
Depends on your strategy.
Great vid but the chalk/marker sound on that board was really unbearable. Had to watch the subs and play it on mute.
Sorry about that!
👍
thanks for watching
I like to rub vix on my chest
Cool
Lol
Well said, Venture Warrior.
Using the VIX Vaporub can improve one's investment strategy
All I'm getting is that it's all speculative
Correct.
until you realize that the institutions have both sides and are using one to get good entries on the second one and selling into the panic on the other lol
Careful... don't want to get too much into the Tinfoil Hat Club...
@@claytrader you think market manipulation is a conspiracy? I mean... I know the financial industry has a spotless record of total honesty, and all above board practices, but try to use your imagination Clay...
@@joeblowjohndoe206 reread my comment...
@@claytrader so the response was intended to be sarcastic? Haha
@@joeblowjohndoe206 I said "too much"... of course there is manipulation, but don't go "too much" into it like some of the conspiracies I've seen.
the dude's blackboard is annoying af. but, nice explanation!
Sorry
HA...! I wana sound cool. So yeah. VIX 😂
And you do sound cool!
I love your explanation but the sound of a dry sharpie on a chalkboard. Uhhhh
You are right... I got rid of them
I don’t understand how you can explain an index without any calculations
I just did :-)
Not really that’s not how the VIX formula is
Yes, it is.
@@claytrader the VIX formula measures the price which dealers are willing to sell the uncertainty of price movements
@@juanlozano9207 I understand you are trying to sound smart, but the fact of the matter is the VIX is used to measure "fear", as I explain.
yeah, no I ain’t trying to sound smart it’s a fact. The VIX is a formula based on the options prices of P/C on the SPX. And well clearly your explanation is wrong and also it’s false. I really don’t care about your opinion though, just go to the CBOE and look at their video much shorter and better 👍🏼👍🏼👍🏼
@@juanlozano9207 cool story Juan
very nice but the scratch on the board makes me @_@ everytime you write
Sorry!