WHAT IS INDIA VIX?

What exactly is ‘India VIX’? Simply put, it is the Volatility Index of India. Volatility means the degree of ups and downs in the prices of stocks in the Indian Stock Market. The volatility Index of India (India VIX) measures the degree of price fluctuations in the market.

Whenever the prices of stocks in the Market go very high or very low in a short span of time, then the Volatility is said to be high. When the prices of the stocks do not show much movement, then the Volatility is said to be low. Along these lines, we can say that when the Volatility is high, the India VIX goes up and when the Volatility is low, the India VIX goes down.

By studying the India VIX, an investor can take better investment/trading decisions, as the India VIX depicts the investors’ perception of the market’s volatility.

India VIX is calculated as a percentage, by the National Stock Exchange of India (NSE) by taking into consideration four (4) main elements: time to expiry, interest rates, forward index level, and bid-ask. NSE determines exactly how much movement can be expected in the market in the near term i.e., in the next 30 working days.

It is important to note that the NIFTY Index and the Volatility Index of India are not the same. There is an inverse relationship between them. India VIX tends to drop when NIFTY Index goes up and vice-versa.

You can understand this concept better with the help of the learned experts/ traders in our teaching institute. Stakeindia is one of the best Stock Market teaching institutes in Nashik, Maharashtra.

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