{"id":223340,"date":"2025-05-02T14:40:36","date_gmt":"2025-05-02T18:40:36","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?post_type=glossary-terms&#038;p=223340"},"modified":"2025-05-02T14:40:37","modified_gmt":"2025-05-02T18:40:37","slug":"rule-of-16","status":"publish","type":"glossary-terms","link":"https:\/\/www.interactivebrokers.com\/campus\/glossary-terms\/rule-of-16\/","title":{"rendered":"Rule of 16"},"content":{"rendered":"\n<p>The &#8220;Rule of 16&#8221; in finance is a way to estimate the daily price movement of a security, especially the S&amp;P 500 (SPX), based on its implied volatility. It suggests that if the implied volatility, often represented by the VIX index, is 16, the SPX might see an average daily move of 1%. 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