Market Fear refers to the anxiety and apprehension that investors experience regarding the potential decline in the value of their investments or the overall market. It is often characterized by a heightened sense of uncertainty about economic conditions, corporate earnings, and geopolitical events that can impact the financial markets. This fear can lead to increased volatility, as investors may react impulsively by selling off assets to avoid potential losses. Various indicators, such as the VIX (Volatility Index), are used to measure market fear, reflecting investors’ expectations of future volatility based on options pricing. High levels of market fear typically result in bearish sentiment, while lower levels suggest greater confidence in market stability.
The Cboe Volatility Index (VIX), known as the "fear gauge," reflects market anxiety and uncertainty, particularly during geopolitical tensions. A recent 1.2% increase in the VIX, reaching 23.05, signals rising…