The fear index has become the most crowded trade in the market. Before diving in, here's what you need to know:

1. Ten things about the VIX fear index:

1. The VIX index is the Chicago Board Options Exchange Market Volatility Index, also known as the "fear index".

2. The fear index represents the risk-neutral expectation of the variance of the S&P 500 index over the next 30 days, expressed as an annualized standard deviation.

3. For example, if the VIX index is currently at 33.60, it means investors generally "expect" the annualized volatility of the S&P 500 index to be 33.60% in the short term (within 30 days). The true nature of VIX is a percentage.

4. According to Chicago Board Options Exchange analyst Kevin Davitt, when the VIX index is at 48, the daily fluctuation of the S&P 500 index is about 3%.

5. A higher VIX value does not necessarily indicate a bear market. On the contrary, the fear index measures the direction of market volatility, including positive changes.

6. However, a high VIX index indicates that investors believe the market will experience significant volatility, both positive and negative.

7. The VIX index reflects how much cost investors are willing to bear for their investment risks. The higher the data, the greater the price paid, so it is widely used to reflect investors' fear of the future market.

8. The VIX index may not accurately predict trends, but it reflects the market sentiment at the time. For example, during the 1998 financial crisis, the VIX index did not exceed 60.

9. Typically, when the VIX index exceeds 40, it indicates irrational fear about the future in the market, which may lead to a short-term rebound.

10. When the VIX is below 20, it indicates that investors are optimistic about the future market.

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