One market that has quickly become a popular topic in the trading and analyst community is the CBOE's (Chicago Board Options Exchange) Volatility Index (VIX). It is a unique product, also known as the "fear gauge" for measuring implied volatility. CBOE describes the VIX as a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. The VIX value is derived from the implied volatility (the portion of an option price attributed to expectations of future volatility) in S&P 500 options. The VIX was introduced by CBOE in the early 1990s and is often considered to be the benchmark barometer of investor sentiment and market volatility (see "Listed options: A brief history" Modem Trader, September 2016). Because the VIX is so widely watched and mentioned, it is only natural for futures traders to get involved. What started out as an index measuring market sentiment eventually became a popular futures and equity option trading instrument.
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