What is India VIX

India VIX is a volatility index based on the index option prices of Nifty. It is computed by using
the best bid and ask quotes of the out of the money, present and near month Nifty option
contracts. VIX is designed to indicate investors’ perception of the annual market volatility over
the next 30 calendar days, higher the India VIX, higher the expected volatility and vice-versa.

We will not get into the complex mathematical formula used to calculate the India VIX, but here
is how you interpret VIX.

For example, if India VIX is 16.8025, this represents an expected annual change of 16.8025% in
the Nifty over the next 30 days. That is, you expect the value of Nifty to be in a range between
+16% and -16% from the present price of Nifty for the next 1 year for the next 30 days. So if
Nifty is presently at 6000 the expected range of Nifty for 1 year is between 5000 and 7000.

If you want to calculate expected volatility for the near term using the VIX, say a month then
formula to use is (VIX/Sqrt (T)) %

If you want to know what is the expected monthly volatility of Nifty based on VIX of 16.8025,
you should divide 16.8025 by square root of 12 (T = 12, 12 30 day terms in 1 year). So the
expected volatility of Nifty using VIX for the next 1 month = 16.8025/3.464 = 4.85%

This information of expected monthly range of Nifty can be used by people who trade Nifty
options as well, especially the option writers. For example, shorting options above or below the
expected monthly range of the Nifty.

*Meaning of VIX*

# India VIX is the pet name for the India Volatility Index, an index disseminated by the NSE. It
measures the degree of volatility or fluctuation that active traders expect in the Nifty50 over the
next 30 days.

# The India VIX is a good indicator of whether participants in stocks are feeling fearful or
complacent about the near future.

# One way to understand the VIX is that it represents the expected annualised change in the
Nifty50 over the next 30 days. To simplify, a VIX of 19.46 means that, for the next one month,
market participants expect the Nifty to move by an annualised rate of 19.46 per cent in either
direction.

# The other way to read the VIX is to compare its current value to its high and low points during
the last 52 weeks or even its entire life-time. Historical data from 2009 tells us that the high
points for the VIX were reached at 55-57 levels in April-May 2009. Its life low was made quite
recently, in June 2017 at 8.75. In the last 52 weeks, the VIX has stayed in a band between 8.75
and 23.09.
*Make Rule if Vix above 15.5 Avoid Trading*

Vix above 30 Don't Even Login your Terminal..Go for vacation for a week

*Follow Stop loss for always whether investing or Trading..

If can't follow Stop loss Invest limited Amount that u r able to loose ..That can't effect u
financially

Decide before Buying that you are buying for Trading or Investing or LifeTimeHolding

PUT/CALL RATIO –

The PC Ratio measures how many put options are bought versus call options.

The formula is very simple to calculate – take the put options Open Interest (OI) and divide by
the OI of calls.