The CBOE Volatility Index is a tool that investors use to predict the short-term stock index option prices within the stock market, according to the CBOE website. The CBOE VIX acts as a sort or barometer that predicts the future volatility of the stock market.
The Chicago Board Options Exchange Volatility Index is an index of investor expectations in the stock market based on the S&P 500 stock index option prices, states the CBOE website. As the market changes, the CBOE VIX changes to portray the anticipated future volatility of the market. Investors can use the index as a tool to help with their stock market buying and selling decisions.