The research aimed to identify the volatility index (VIX) and its trend path during 2016-2023, as well as clarify the relationship between the (VIX) and ISX indices using the ARDL model, and test the stability of both indices. The research concluded that the ISX index for the Iraqi market is selected in a way that allows the index to reflect the state of the capital market. It is calculated through price changes, which does not reflect the reality of the market. The results of the ARDL model also showed the insignificance of the relationship in the short and long term, as the probability P (0.5280) appeared, which is higher than 0.05, which means that the VIX index did not have any effect on the ISX, whether the VIX rose or fell, and this indicates the isolation of the Iraqi Stock Exchange from international markets and its progress in modern trading tools and methods. Among the recommendations for the purpose of developing the ISX index, statistical methods and formulas should be adopted that reflect the actual market reality and simulate international markets and indices. Adopting advanced and modern methods in trading and integrating with international financial institutions and markets through gaining experience, field visits and keeping up with developments.