Ending a week fraught with investor anxiety, the Dow Jones industrial average shot up 263 points Friday, its second-largest gain of the year.
The stock market has been particularly volatile in recent weeks. The Chicago Board Options Exchange's volatility index, known as the VIX, shows how much investors are worried that stock prices might drop over the next 30 days. It measures the price of options, or contracts to buy or sell stocks at a guaranteed price. When stocks are volatile, investors are afraid and willing to pay more for options. That raises the VIX.
The VIX spiked as high as 26 on Wednesday, more than double where it stood in September. The VIX hit a record high of 89.5 in October 2008, during the financial crisis.Associated Press
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.