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What is the index of fear and greed?
Fear and greed index (fear &; Greed index) is an index developed by CNN Money, which can be used to measure investors' emotions in the market, and the two most common emotions of investors are "greed" and "fear".
When investors are afraid of the stock market, the stock price usually falls below the general level, while when investors are greedy, the stock price tends to overshoot.
This index is different from the Standard & Poor's 500 Index, Dow Jones Index and Shanghai Composite Index, which are composed of various constituent stocks. Instead, by counting the emotional changes of investors in the stock market, seven indicators are weighted to calculate the fear and greed index, namely:
Junk bond demand
Market kinetic energy
market fluctuation
Share price width
Hedge demand
Put option and call option
Stock price intensity
What does the index stand for?
The range of fear and greed index is 0~ 100. The closer the value is to 0, the more fearful investors are. When the value is closer to 100, it means that investors in the market are more greedy.
So this data can be subdivided into five States: extreme fear, fear, neutrality, greed and extreme greed.
0-25 years old: extreme fear
26-44: Fear
45-55 years old: neutral
56-74: Greed
75- 100: Extremely greedy