VIX Market fear gauge below 40 for first time since October 2008

The VIX, otherwise known as the market's fear gauge, slumped back below 40 on Wednesday, the final trading day of the year, for the first time since early October.

The VIX , short for the Chicago Board Options Exchange Volatility Index, reached a low of 39.61 on Wednesday, a level unseen since Oct. 2. The VIX, based on a number of index options, shows the market's expectations for volatility over a 30 day period.

According to FactSet Research, it spiked to record highs of between 81 and 96 in late October, as panic gripped markets worldwide. Since 2003, readings below 20 were the norm.

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