Fear & Greed Index
What is Fear & Greed Index? — Definition
The Fear & Greed Index was popularized by CNN Business and measures investor sentiment by combining several market signals: stock price momentum, stock price strength, stock price breadth, put/call options ratio, junk bond demand, market volatility (VIX), and safe haven demand. The result is a single 0–100 score. Readings below 25 signal Extreme Fear; above 75 signal Extreme Greed.
The index is a contrarian tool. When fear is extreme, markets have historically been oversold and near bottoms — presenting buying opportunities. When greed is extreme, markets may be overheated and due for a correction. Warren Buffett's famous maxim applies here: 'Be fearful when others are greedy, and greedy when others are fearful.'
Example
During the COVID crash of March 2020, the Fear & Greed Index hit single-digit readings (Extreme Fear). Investors who bought the S&P 500 at that moment saw returns of over 100% within 18 months. In January 2022, the index was near 80 (Extreme Greed) right before a 25% market drawdown.
BMInsider's Fear & Greed Index is updated daily and includes historical charts, allowing you to see exactly how current sentiment compares to prior peaks and bottoms.
Frequently asked questions about Fear & Greed Index
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