Someone asked me this last week: “What’s a normal or typical VIX level?”  That’s a good question.  Here is the answer: 20.2.

And 17.1.

And also 13.0.

Before I go into why it takes at least three numbers to answer this question, let me remind you that the history of the CBOE Volatility Index (VIX) looks like this:

Figuring out the normal VIX level is akin to figuring out how high Alaska, my home state, is above sea level.  A skilled topographer could determine an average for the whole state, but this statistic would be skewed by Mount McKinley and the other huge mountains in the Last Frontier.  But an average is still useful to know.  For VIX, the average daily closing value for the 10 years ending December 2013 was 20.2.

When people worry about outliers skewing the average, they often turn to the median.  This is the second number I introduced: 17.1.  If you were to order the 2,517 trading days over the last 10 years by their closing VIX value, 17.1 would be next to the 1,259th observation, the middle one.