by Ben Morris
The VIX is often called the market’s “fear gauge” because it measures the prices people are willing to pay for stock options…
When folks are worried about a crash, they buy put options to protect their portfolios against falling stocks… and put prices rise. The VIX rises with them. (The VIX can rise when folks go heavy on bullish bets by buying call options, too.)
The risk of a big drop in the coming months is smaller than it normally is.
Stocks can rise for years at a time while the VIX is below average. They can also rise when the VIX is above average.
A low VIX does not mean stocks are going to crash. There is no evidence to back up a statement like: “A low VIX means too much investor complacency and too little regard for risk, so a crash is around the corner.”
Source: Daily Wealth Trader
http://thecrux.com/what-the-markets-fea ... cks-today/