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To: Win-Lose-Draw who wrote (126667)	12/3/2005 10:52:10 PM
From: skinowski	Read Replies (1) \| Respond to of 209892

The VIX represents the implied volatility of a hypothetical at-the-money SPX option. If implied volatility is high, the premium on options will be high and vice versa. Generally speaking, rising option premiums reflect rising expectation of future volatility of the underlying stock index, which represents higher implied volatility levels. I took the quote from this (googled) article. ezinearticles.com My understanding is that VIX is the part of the price of the option (not theoretical, but derived empirically in real time) which reflects the public's expectations of volatility. When investors are fearful, they bid up the prices of options, and the VIX increases. People get scared during declines, and scramble to buy puts, bidding up the prices. Naturally, spikes in the VIX tend to mark lows. I don't quite understand why you say that "VIX is a number representing a percentage of SPX". Please expand, I'd like to learn about this as much as I can.