what is cboe nasdaq volatility index vxn 
the cboe nasdaq volatility index vxn is a measure of market expectations of 30 day volatility for the nasdaq 100 index as implied by the prices of options listed on this index 1 the cboe global markets cboe launched the vxn in january 2001 2understanding cboe nasdaq volatility index vxn the vxn index is a widely watched gauge of market sentiment and volatility for the nasdaq 100 which includes the top 100 u s and international non financial securities by market capitalization listed on the nasdaq the vxn is quoted in percentage terms just like its better known counterpart the cboe volatility index vix which measures 30 day implied volatility for the s p 500 index 13the cboe nasdaq volatility index was introduced in 2001 as the dot com bubble in technology stocks was deflating cboe developed the vxn because of the massive divergence between the volatility seen in the nasdaq market compared to the broader u s equity market from early 1999 onward 45indeed the nasdaq soared 157 in a 15 month period from january 1999 to its peak level of 5 048 on march 10 2000 before plunging 52 to below 2 500 by december 20 2000 6 the s p 500 by comparison only gained 21 from january 1999 to its march 24 2000 peak and then declined back down 18 by the end of 2000 7the higher the vxn level the greater the expectation for nasdaq 100 volatility like the vix the vxn functions best as a fear gauge or indicator of market nervousness about the technology sector since its introduction the highest level reached by the vxn was 71 72 in september 2001 brought on by the 9 11 attack other notable peaks include 79 16 in october 2008 at the height of the global financial crisis and 80 08 in march 2020 as the world reeled under the global economic shutdown the 2020 crisis induced vxn spike proved to be short lived as the gauge returned to levels in the 30s on the flip side the lowest level was 10 31 in march 2017 8vxn methodology and interpretationthe methodology used by the cboe to calculate the vxn whose value it disseminates continuously during trading hours is identical to that used for the vix vxn components are near term with at least one week to expiration put and call options and next term options in the first and second nasdaq 100 contract months options with more than 23 days and less than 37 days to expiration the selected options are out of the money nasdaq 100 puts and calls centered on an at the money strike price 910movement in the vxn represents the level of implied volatility from the prices of listed options on the nasdaq 100 index increases in the vxn and positive movement represent higher variances in the underlying securities price from their average this usually occurs with uncertainty decreases in the vxn and negative movement represents lower volatility and a greater propensity for prices to trade in a tighter range the vxn is generally followed along with the nasdaq 100 to understand volatility in relation to positive or negative movements in the prices of the index 