VIX daily move calculator (the rule of 16)
The VIX says 20. What does that mean for tomorrow? Divide by 16. Type in the VIX and the index level and see the move the market is pricing for a day, a week and a month.
How it works: the VIX is the S&P 500's implied volatility for the next 30 days, as a yearly %. To shrink a yearly move to a shorter one, divide by the square root of how many of those periods fit in a year. A year has about 252 trading days. That's close to 256, and the square root of 256 is 16. So VIX ÷ 16 = the expected daily move. A week is VIX ÷ √52 (about 7.2). A month is VIX ÷ √12 (about 3.5). Each one is a one-standard-deviation move: the market prices the index to stay inside it about 2 times in 3.
What the VIX number really means
A VIX of 20 does not mean the market will move 20% tomorrow. It means option prices on the S&P 500 imply a 20% move over a full year, one standard deviation. Divide by 16 and you get 1.25% a day. On a 6,000 index, that's about 75 points either way. When the VIX is 12, a normal day is under 1%. When it's 40, a normal day is 2.5%, and that feels wild. The rule of 16 turns the scary headline number into something you can picture on a chart. See what the VIX is.
How option sellers use it
Most days the index moves less than the VIX implies. That gap is part of why options cost what they do. But real days are not a neat bell curve. Days of 3 or 4 standard deviations happen far more often than the math says, and they come in bunches. For anyone running the wheel strategy on index ETFs, the daily move is a quick check: is the put strike one bad day away, or five? For a single stock, use its own IV in the expected move calculator instead. More in selling options in a volatility spike.
The Options Wheel System · for StructureX members
Learn the whole wheel, step by step. Use it for life.
44 plain-English modules take you from zero to running the wheel: covered calls, cash-secured puts, assignment, rolling, the math and the risk rules. A scored quiz after every part. Members of StructureX Foundations, my 50-lesson course, add it in one click, with the AI Research Desk.
See What’s Inside the Course $34.99 a month · Cancel anytimeFollow along