The CBOE Volatility Index measures the market's expectation of 30-day forward-looking volatility, derived from S&P 500 option prices. Often called the 'fear gauge,' it's the most intuitive measure of investor sentiment. • 12–20: Market calm. Common during bull markets • 20–30: Rising uncertainty. Caution warranted • 30+: Fear zone. Spikes during crises (80 in 2008, 82 during COVID) While VIX spikes usually accompany market selloffs, paradoxically, peak VIX levels often signal buying opportunities. It has a strong inverse correlation with equity indices and reflects hedging demand from options traders.