Which index measures market volatility?

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Multiple Choice

Which index measures market volatility?

Explanation:
Volatility indexes capture how much market prices are expected to swing in the near term, based on options data. The VIX does this directly for the broad U.S. stock market by using prices of S&P 500 options to estimate the 30-day expected volatility, expressed as an annualized percentage. It’s widely known as the fear gauge because it tends to rise when markets become choppier and sentiment tightens. Other measures look at different things: the MOVE Index tracks volatility in interest rates rather than stocks; the VXN focuses on the Nasdaq-100’s expected volatility; and the VXX is a vehicle that tracks VIX futures to provide exposure to volatility rather than serve as a direct measure of expected market moves. So, the index that measures market volatility is the VIX.

Volatility indexes capture how much market prices are expected to swing in the near term, based on options data. The VIX does this directly for the broad U.S. stock market by using prices of S&P 500 options to estimate the 30-day expected volatility, expressed as an annualized percentage. It’s widely known as the fear gauge because it tends to rise when markets become choppier and sentiment tightens.

Other measures look at different things: the MOVE Index tracks volatility in interest rates rather than stocks; the VXN focuses on the Nasdaq-100’s expected volatility; and the VXX is a vehicle that tracks VIX futures to provide exposure to volatility rather than serve as a direct measure of expected market moves.

So, the index that measures market volatility is the VIX.

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