As of the end of 2024, the Cboe Volatility Index (VIX), often known as the "fear index," stands at 17.35. This level represents a slight decrease of 0.29% from the previous market day, where it was recorded at 17.40. Historically, the VIX gauges the market's expectation of near-term volatility, primarily using S&P 500 index options.

Over the past year, the VIX has seen a notable rise, climbing from 12.45 to its current level. This 39.36% increase signals elevated market volatility compared to last year. Despite this surge, the VIX has remained mostly below its long-term average of approximately 20 throughout 2023, suggesting a period of relatively composed market conditions amid global uncertainties.

Several critical factors contribute to the current state and trends of the VIX. One significant factor is the impact of market dynamics, particularly the growing use of structured products tied to the S&P 500. These products have gained popularity, influencing the market by moderating volatility through hedging activities. As option dealers engage in hedging these derivatives, it can lead to steady or even reduced levels of volatility, as evidenced by the current VIX despite prevailing uncertainties.

Additionally, trading activity has also played a role. The market has seen increased interest in short-term options, specifically those with zero-days-to-expiry (0DTE). However, these short-term options do not appear to have substantially decreased trading in one-month-to-expiry options, indicating their limited direct impact on the VIX's overall movement.

Contrary to past instances where VIX futures sales by short VIX ETFs influenced the index, this is not the case at present. Instead, there is now a net positive demand for VIX futures from these ETFs. This activity undermines the idea that they are exerting downward pressure on the index, suggesting other forces are at play affecting the VIX's stability.

Interpreting the current VIX level of 17.35, it is positioned within a normal range, typically considered between 13 and 19. Within this range, market conditions are viewed as stable, with no extreme fear or anxiety anticipated in the coming month. The slight decrease from the previous day underscores a consistent, albeit slightly heightened, level of volatility, reflective of typical market movements rather than any immediate stress or turmoil.

In conclusion, the VIX's current level of 17.35 reflects a