India VIX

India Vix Today

The Volatility Index (VIX) is a barometer of the market's expectation of volatility over a short-term period. India VIX live, also known as the Fear Gauge/Fear Index, is a non-directional indicator of expected market volatility over the next 30 calendar days. It swings between 15 to 35, with values under 20 signifying low volatility and stable markets. However, since November 2021, there have been instances of VIX levels going above 20, suggesting a shift towards a higher VIX regime due to increased retail participation in the options segment. The highest-ever reading of India's VIX levels was recorded in November 2008 due to the Global Financial Crisis, followed by a reading of 87 in March 2020 due to the COVID situation.

History of the India VIX

The Chicago Board of Options Exchange (CBOE) first developed India VIX in 1993, basing it on the values of its S&P 100 Index option. In 2003, S&P 500 Index options were substituted for the original S&P 100 Index option. The NSE used this approach and modified it to fit the needs of the Indian market; as a result, India VIX was introduced in 2008, and VIX Futures followed in 2014.

Importance of India VIX on the Stock Market

The India VIX live chart is regarded as a reliable gauge of market turbulence and swings. It benefits many traders and investors in the following ways:

Intraday Traders:

It gives them important information about changes in market volatility. This aids people in assessing the market risks associated with equities. When there is significant market volatility, intraday traders may find that their stop-loss orders are triggered, which may cause them to reduce their leverage or widen their stop-loss limits. India VIX's comprehension of market circumstances aids in the making of these crucial judgements.

Those Who Invest for the Long Term:

This index offers significant advantages to long-term investors in addition to intraday traders. They are susceptible to Margin-to-Market (MTM) loss limitations, even if short-term volatility may not have a significant impact on them. As a result, being aware of the volatility index's value can help people make wise investing decisions in the market.

Options Traders:

Given the market's volatility, the India VIX is a reliable indicator to use when deciding whether to purchase or sell an option. Option sellers benefit in less volatile market situations, whereas option purchasers benefit more in more turbulent market scenarios.

Portfolio Managers and Mutual Funds:

The VIX fluctuates to help mutual fund and portfolio managers choose whether to buy low-beta or high-beta equities.

How is India VIX Value Calculated?

In order to allow market participants to assess the influence of even the smallest fluctuations in volatility on prices, the Nifty VIX values are calculated to four decimal places. Data for the following four criteria are needed:

• Computes Nifty VIX chart values up to 4 decimal places to analyze price impact due to minute volatility changes.
• It requires data for four factors: time to expiry, Interest Rate, Forward Index Level, and Bid-Ask Quotes.
• Time to expiry is computed in minutes for a more precise value.
• The forward index level is the NIFTY futures contract's most recent accessible price for the corresponding expiry month.
• The forward index level determines the at-the-money (ATM) strike price, which is used to select out-of-the-money option contracts.
• Bid-ask quotes are used to calculate India VIX share price. If quotes are unavailable, values can be determined through interpolation using "Natural Cubic Spline".

You can check India Vix chart daily with BlinkX