India VIX has jumped 31.27 percent in the last one month, which is important for investors to understand what it indicates about the movement of the market.
What is India VIX: Due to Russia’s attack on Ukraine, there is a huge fall in the stock markets around the world. Due to this war, inflationary pressure remains and there is volatility in the markets. In such a situation, the biggest problem for retail investors is about the movement of the market, in which direction the market is going to move ahead. An estimate about this can be taken from India VIX (India Volatility Index). It has jumped 31.27 percent in the last one month, which is important for investors to understand what it indicates about the market movement.
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Understand the meaning of India VIX like this
Suppose that India VIX is at 30 percent right now, then it means that in the coming 30 days the market can slip up to 30 percent or down by 30 percent. NSE calculates it on the basis of order book of Nifty options. Express it as a percentage. VIX is a trademark of Chicago Board Options Exchange (CBOE) and Standard & Poor’s (S&P) which has licensed it to NSE and NSE hereby represents India VIX. NSE had introduced India VIX in the year 2008, about 14 years ago, which acts as a benchmark for the movement of the market in the coming 30 days.
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What is the relation between Nifty and India VIX
Usually this volatility index fluctuates between 15 and 35. Near or below 15 means there will be less volatility in the market whereas conversely, around or above 35 means there will be heavy volatility in the market. According to a report by brokerage firm Angel One, till now the number of times India VIX was less than 15, Nifty has strengthened as many times. Before Corona this volatility index was much less than 30 but after the pandemic it reached 50. Right now it is on 32.16.
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