Market Fear Gauge Simmers Down. Why the VIX Looks Calm.

The Cboe Volatility Index, also known as the VIX and the market’s fear gauge, was retreating early Monday after rising along with the stock market’s fall on Friday.

The index was at about 20, around the level that tends to be seen as dividing market turbulence and general calm. In the middle of last week it was below 17, but it’s still well below the recent highs of 50 recorded in April when President Donald Trump unveiled his sweeping tariffs.

The measure doesn’t only consist of how much stock prices are moving up and down. It also takes into account sales of put options, or contracts that guarantee a trader the right to sell a stock at a certain price. The instruments are used to prevent big losses if there’s a sudden downturn.