VIX above 40 represents genuine panic — fewer than 2% of trading days since 1990. These readings are concentrated around 1998 LTCM, 2008 GFC, 2011 US downgrade, 2015 China devaluation, 2018 Volmageddon, 2020 COVID, and 2022.
ALAN INTELLIGENCE
ALAN INTELLIGENCE · alanglobalintelligence.com
ALAN IntelligenceData as of 2026-08-30
Every historical instance, overlaid — S&P 500 forward path from the event
Each instance (n=11)Median path25th-75th percentileCurrent: 2025
Median forward returns by horizon
Bars: median S&P 500 forward return. Whiskers: 25th-75th percentile. n = 11 occurrences.
Based on 11 historical occurrences. Last triggered: 2025-04-04.
Past performance is not indicative of future results. This material is for informational and educational purposes only and does not constitute investment advice, an offer to buy or sell any security, or a recommendation. Data from publicly available sources believed to be reliable but not guaranteed. All investments involve risk, including possible loss of principal.
alanglobalintelligence.com
ALAN GLOBAL INTELLIGENCE · alanglobalintelligence.comSource: CBOE VIX Index · Generated 2026-08-30
Historical occurrencesshowing 11 of 11
Date
1M return
1Y return
5Y return
1998-08-31
+6.2%
+37.9%
+6.7%
2001-09-17
+5.7%
-15.9%
+27.2%
2002-07-22
+14.3%
+20.5%
+84.3%
2008-09-29
-15.0%
-4.1%
+53.2%
2009-04-06
+10.1%
+41.5%
+121.7%
2010-05-07
-4.4%
+20.6%
+89.5%
2011-08-08
+7.1%
+25.2%
+94.3%
2015-08-24
+2.4%
+15.5%
+81.9%
2020-02-28
-11.1%
+32.1%
+97.8%
2020-10-28
+11.2%
+40.5%
+107.0%
2025-04-04
+10.5%
+33.7%
—
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Panic-level VIX has preceded exceptional returns
The median 12-month forward return after VIX crosses 40 is approximately +25%. Every instance since 1990 has produced positive 12-month returns.
These events are rare — roughly once every 3-4 years
Since VIX inception in 1990, there have been approximately 10 distinct episodes of VIX above 40. Each felt like the end of the world at the time.
The worst is usually already priced in
By the time VIX reaches 40, markets have typically already fallen 15-25%. The fear premium baked into options at that level implies a much worse outcome than usually materializes.
For your portfolio
Markets reaching VIX 40 have typically already fallen 15-25%, meaning much of the bad news is priced in — de-risking here sells at fear-inflated discounts. Consider the reverse discipline: measure how far your equity weight has slipped below target and restore it on a schedule, treating panic pricing as the historically favorable entry it has been.
For information and research only. Not investment advice. ALAN does not place trades or execute orders. Figures come from the sources shown and can lag the market; verify independently before making decisions. Past performance is not predictive of future results.
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ALAN is not a broker-dealer or investment advisor. All data is informational only and does not constitute investment advice. Past performance does not guarantee future results.