What is India VIX
5paisa Research Team
Last Updated: 07 Mar, 2025 10:35 AM IST

Content
- What is India VIX?
- Importance of India VIX Index
- How is India VIX Calculated?
- What are the Factors Influencing India VIX?
- How to Use India VIX for Trading?
- Advantages & Disadvantages of India VIX
- Relationship Between India VIX and Nifty 50
What is India VIX?
India VIX, or the India Volatility Index, measures the expected market volatility in the NIFTY 50 index over the next 30 days. Introduced by the National Stock Exchange (NSE) in 2008, it is often called the "fear index" as it reflects investor sentiment and risk perception in the stock market. Unlike price indices like NIFTY, which track stock movements, India VIX focuses purely on market fluctuations.
India VIX is derived from the best bid-ask quotes of NIFTY 50 options contracts, using the Black-Scholes model. A higher India VIX suggests greater uncertainty and potential price swings, while a lower VIX indicates stability and investor confidence. Understanding India VIX helps traders and investors anticipate market fluctuations and make informed decisions.
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Frequently Asked Questions
India Volatility Index (VIX) tracks market volatility in India. A high India VIX number suggests that investors anticipate a significant move in the Nifty. At the same time, a low India VIX value shows investors expect a little move in the Nifty.
For instance, The India VIX normal range is between 13 to 19, and normal volatility over the following 30 days may be anticipated.
The VIX and the Nifty have always been inversely related to one another. When looking at the India VIX Historical Data, we see correlation ranges between -0.80 and -0.85. This testifies to a significant inverse relationship.