Volatility Index is a measure of market’s expectation of volatility over the near term. Volatility is often described as the ‘rate and magnitude of changes in prices’ and in finance often referred to as risk. Volatility Index is a measure, of the amount by which an underlying Index is expected to fluctuate, in the near term, (calculated as annualised volatility, denoted in percentage e.g. 20%) based on the order book of the underlying index options.
India VIX is a volatility index based on the Nifty 50 Index Option prices. From the best bid-ask prices of Nifty 50 Options contracts, a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days.
About India VIX
India VIX is a volatility index based on the Nifty 50 Index Option prices. From the best bidask prices of near term Nifty 50 Options contracts (which are traded on the F&O segment of NSE), a volatility figure (%) is calculated (detailed calculation methodology enclosed) which indicates the expected market volatility over the next 30 calendar days. Higher the implied volatility higher the India VIX value and vice versa. There are some differences between a price index, such as the Nifty 50 and India VIX. Nifty 50 is calculated based on the price movement of the underlying 50 stocks which comprises the index. India VIX is calculated based on the bid-offer prices of the near and mid month Nifty 50 Index Options. Nifty 50 Index is an absolute number, e.g. 4500, 5000 etc., whereas India VIX is a percentage value (eg. 20%, 30% etc.). Whereas Nifty 50 signifies how the markets have moved directionally, India VIX indicates the expected near term volatility and how the volatility is changing from time to time. India VIX is a premier barometer of investor consensus of market volatility expressed through option pricing.
Latest quote for India VIX can be accessed at http://indianewsbox.in/IndiaVIX.php
Arrange your own love marriage? Register at Shaadi.com Matrimonials
Recommendations made by the author follow the PIYP (Pay if You Profit) model and should not be considered as free. Details on the PIYP model can be accessed at the following link
Whats PIYP Model ?
Investing in Stock markets involves risks . Hence the author is in no way liable for losses made by readers of the SmelltheCheese Blog or SmelltheCheese googlegroups.
