India VIX
The market's expected volatility for the next 30 days, from Nifty option prices.
Futures, options and institutional flows
What is India VIX?
India VIX is NSE's volatility index. It is computed from the prices of near- and next-month Nifty 50 options using a method adapted from the CBOE VIX, and expresses the volatility the options market expects over the next 30 calendar days as an annualised percentage. It is often called the fear gauge because it rises when traders pay up for protection.
Formula
India VIX ≈ annualised 30-day implied volatility of Nifty 50, from out-of-the-money option quotes
Rough rule: expected 30-day Nifty move ≈ VIX ÷ √12 (in %)
How to read it
- VIX below about 12 is a calm market, 12-20 normal, above 20-25 stressed.
- VIX usually rises when the market falls, and spikes mark panic lows more often than tops.
- Low VIX makes options cheap and is often a quiet period before a volatility expansion.
Common mistakes
- Reading VIX as a direction signal. It measures expected movement size, not direction.
Use it on Flash Finance
Related concepts
Open interest, option walls and put-call ratioOutstanding derivative contracts, and what the strikes with the most OI suggest.Market breadthHow many stocks are participating in a market move, not just the index.Bollinger Bands and the squeezeA 20-day average with bands two standard deviations above and below.
