VIX 75 means Volatility Index 75, and it is a synthetic Index that is designed to mimic the actual VIX fear index when it is at a reading of 75 points.
Let me break it down, there is something called the VIX index which measures how much fear is in the market. When investors are afraid, you see them buying options contracts on the S&P 500 index, and so the more options contracts are bought, the more the sense of fear in the market.
Now, a VIX reading of 20 and below is considered low fear, but a VIX reading higher than 20 is considered moderate to high fear.
Now the people who made the VIX 75 designed it to mimic a situation where the fear is very high in the market and the VIX reading is 75.
VIX 75 is a very volatile instrument to trade because when VIX reading is 75, prices rise and fall wildly and support & resistance levels may not hold the way you are used to seeing them do.
In such a case when trading VIX 75 you must practice higher risk management, set smart stop losses and know when to exit the market with your profits before the market turns against you.
You must also know when to cut your losses early, so you live to trade another day.
With high risk comes high reward, and although VIX 75 is a risky instrument to trade, people still trade it because of the desire to make high profits.
