Chicago Board Options Exchange (CBOE)
The largest US options exchange and creator of the VIX volatility index, a key barometer of market fear.
The CBOE is the largest US options exchange and creator of the VIX 'fear gauge'. The VIX measures expected 30-day S&P 500 volatility, and forex traders watch it as a risk-sentiment signal.
The Chicago Board Options Exchange is the largest options exchange in the United States. Founded in 1973, it pioneered listed options trading and created the VIX (Volatility Index), widely known as the "fear gauge." The VIX measures expected 30-day volatility in the S&P 500 and is used by forex traders as a risk sentiment indicator because spikes in VIX often coincide with safe-haven flows into USD, JPY, and CHF.
How It Works
- Lists options on equities, indices, ETFs, and volatility products
- Created the VIX in 1993 to measure implied volatility of S&P 500 options
- VIX below 20 generally indicates calm markets; above 30 signals high fear
- VIX futures and options allow traders to trade volatility directly
Trading Tips
Watch the VIX as a risk sentiment proxy for forex. Rising VIX often strengthens JPY and CHF
VIX tends to spike sharply during selloffs and decline slowly during rallies
A VIX above 30 typically coincides with wider forex spreads and more erratic price action
Related Terms
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