What does the FEAR index tell us about market conditions and the turmoil in China?

What does the FEAR index tell us about market conditions and the turmoil in China?

Perhaps you’ve heard of the FEAR index? It’s not an actual index. It’s what the VIX (S&P500 Volatility Index) is also known as. And with good reason.
The VIX measures implied volatility—what is expected in the future. The reason it’s called the FEAR index is because the higher it is, the more it costs to insure the portfolio. When market participants expect or ‘foresee’ higher near-term volatility, that translates into a higher cost of protection because it costs more to insure.

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