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The Cboe Nasdaq Volatility Index, or VXN, is an important measure of market sentiment in the technology sector. Created by the CBOE in 2004, the VXN is a real-time index representing the market's expected volatility in the Nasdaq-100 index over the coming 30 days. It is similar to the VIX, an index that tracks implied volatility of options listed on the S&P 500.
The VXN reflects the collective view of investors about the expected risk and reward for investing in tech stocks over the next 30 days. It is a measure of investor anxiety about the technology sector, with higher values suggesting increased uncertainty and heightened risk. Trading the VXN is one way that investors and traders can gain a read on where the technology sector is headed and how likely it is that the tech sector will experience sudden price swings.
The VXN is computed using the implied volatilities of options listed on the Nasdaq 100 index. It is a weighted measure of hedge funds and large institutions betting on the future volatility of the Nasdaq composite index. By studying the VXN, investors and traders can gauge the volatility of the tech sector and anticipate market moves.
The VXN is considered a reliable measure of market sentiment and can be used to complement other market indicators. For example, investors and traders could buy when the index drops below a certain threshold and sell when it surpasses a certain threshold. They could also use the VXN to inform their asset allocation decisions and to scale in or out of tech stocks as the index swings up and down.
In summary, the Cboe Nasdaq Volatility Index tracks the expected volatility in the Nasdaq-100 index over the coming 30 days and is a useful measure of market sentiment in the technology sector. By tracking this index, investors and traders can anticipate price swings in tech stocks and make informed trading decisions.
The VXN reflects the collective view of investors about the expected risk and reward for investing in tech stocks over the next 30 days. It is a measure of investor anxiety about the technology sector, with higher values suggesting increased uncertainty and heightened risk. Trading the VXN is one way that investors and traders can gain a read on where the technology sector is headed and how likely it is that the tech sector will experience sudden price swings.
The VXN is computed using the implied volatilities of options listed on the Nasdaq 100 index. It is a weighted measure of hedge funds and large institutions betting on the future volatility of the Nasdaq composite index. By studying the VXN, investors and traders can gauge the volatility of the tech sector and anticipate market moves.
The VXN is considered a reliable measure of market sentiment and can be used to complement other market indicators. For example, investors and traders could buy when the index drops below a certain threshold and sell when it surpasses a certain threshold. They could also use the VXN to inform their asset allocation decisions and to scale in or out of tech stocks as the index swings up and down.
In summary, the Cboe Nasdaq Volatility Index tracks the expected volatility in the Nasdaq-100 index over the coming 30 days and is a useful measure of market sentiment in the technology sector. By tracking this index, investors and traders can anticipate price swings in tech stocks and make informed trading decisions.