The VIX, or Volatility Index, measures market expectations of future volatility based on options prices of the S&P 500 index. It is often referred to as the "fear gauge" because higher values indicate increased uncertainty or risk in the market, while lower values suggest stability. Traders and investors use the VIX to assess market sentiment and make informed decisions. A rising VIX typically signals that investors expect significant price swings, while a declining VIX suggests a more stable market environment. Understanding the VIX can help individuals navigate investment strategies during varying market conditions.