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Fear index jumps 28% on Libya turmoil

VIXThe volatility index hit its highest levels in a month on Tuesday. Click chart for more on the VIX. By Ken Sweet, contributing writer

NEW YORK (CNNMoney -- Wall Street's key volatility measure spiked nearly 28% Tuesday as investors fret about the deteriorating situation in Libya.

The CBOE volatility index (VIX), or VIX, rose 27.8% to 20.99 in late afternoon trading. The index has jumped more than 31% in five days and is now trading at its highest level since late November.

Investors are clearly getting worried but the fear level is still below 30 -- considered the benchmark sign of investor worry.

At current levels, the VIX is also still way below its peak level of almost 90 hit in October 2008 -- after Lehman Brothers collapsed. And year to date, the index is up only about 18%.

The VIX is used by traders as a gauge for how volatile the stocks and futures markets could be over the next 30 days.

The rise in the VIX comes amid a sharp stock sell off, with the Dow falling as much as 120 points.

The turmoil and chaos in Libya is keeping investors on edge as worries about a disruption in oil supplies sends crude prices sharply higher. Oil prices continued to spike Tuesday.

The VIX hit a session high after Libyan leader Moammar Gadhafi said in an hour-long speech that he would not step down and would die before being removed from office.

The Libyan protests follow what have been mass protests across the Middle East. To top of page

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