The VIX, or the CBOE Volatility Index, is a way to measure how much people think the stock market will go up and down in the near future. Imagine you’re playing a video game and you’re not sure if the game is going to be easy or hard. You might feel nervous because you don’t know what to expect. The VIX is like that nervous feeling for people who buy and sell stocks.
The reason why the VIX matters is that it can give people an idea of how uncertain the market is right now. When the VIX is high, it means that people are worried about the future and the stock market might be more volatile, which means it could go up and down a lot in a short amount of time. When the VIX is low, it means people are more confident about the future and the market might not move as much.
Overall, the VIX is an important tool that helps people understand how much risk there is in the stock market, and it can be used to help make decisions about when to buy or sell stocks.