Volatility regime
The Market's one-word read of where volatility sits, from the VIX level and the VIX term structure.
Formula
Gauge = (VIX − 10) ÷ (40 − 10) × 100, clamped to 0–100
How to read it
VIX below 13 reads Ultra-low, below 17 Low, below 22 Normal, below 28 Elevated, below 35 High, and 35 or more Extreme. Term = VIX − VIX 3M: above 0 is backwardation (protection is being bought now), at or below 0 is contango (calm). The gauge runs from Calm at a VIX of 10 to Stressed at 40.
How to use it
Volatility sets position size and stop distance: the same stop sits closer to the price, in effect, in an Elevated regime. Backwardation is the classic sign of an immediate hedging bid, often near short-term lows.
Limitations
The VIX describes S&P 500 options only. The term structure and VVIX need a provider that serves VIX 3M and VVIX; without them those readings are left out.
In Kereon
Market · Pulse. From the tape's latest VIX, VIX 3M and VVIX.
Also called: volatility tile, vix regime, calm, stressed, backwardation, contango, elevated volatility.