VIX Options

VIX options are financial tools that allow investors to hedge or speculate on future stock market volatility, often called the "fear gauge." They are based on the VIX index, which measures market expectations of near-term volatility using option prices on the S&P 500. When investors anticipate increased uncertainty, VIX options can rise in value, helping manage risk or profit from market turbulence. They are traded similarly to stock options but derive their value from the expected swings in the overall market, making them useful for understanding and responding to changes in market sentiment.