The VIX index, also known as the Volatility Index, measures market expectations of future volatility based on options prices of the S&P 500. It reflects investor sentiment, indicating whether the market is expecting high or low volatility in the near term. A higher VIX value suggests increased uncertainty and potential market fluctuations, while a lower value indicates a more stable market environment. Traders and investors often use the VIX index as a tool for risk management and to gauge market sentiment. It can influence investment strategies, as a rising VIX may prompt investors to hedge their portfolios, while a declining VIX might encourage more aggressive investment approaches.