The PVIX index is VIX, which is introduced by the Chicago Board Options Exchange and is related to the volatility of index options. VIX means the weighted average of volatility. Compared with the out-of-price series, the volatility of VIX index is relatively low, which is determined by the subjective will of market participants, that is, the willingness to avoid risks.

Limitations of VIX index

After repeated research and discussion, some experts found that although VIX index has strong functionality, its limitations are obvious. The response of VIX index to the actual market fluctuation may be relatively low, that is, the fluctuation of VIX index is lower than the actual market fluctuation. When the market fluctuates more violently, this undervalued phenomenon becomes more serious. Investors should pay attention to it at this time, stop blindly trusting VIX, and carefully understand the specific information of financial products before investing. In order to solve this problem, some professors put forward the generalized volatility index, which is correct. VIX supplementary index can make up for VIX's underestimation of market volatility to some extent.