Definition
India VIX
India VIX is the volatility index that measures the market's expectation of near-term volatility, often called the 'fear gauge'.
Computed by the NSE from Nifty options prices, India VIX reflects how much volatility traders expect over the next 30 days. A low VIX (say 10-13) signals calm and complacency; a spiking VIX (above 20-25) signals fear and uncertainty, often around events or selloffs.
Traders use it as a contrarian sentiment tool, extreme fear (high VIX) sometimes marks market bottoms, while extreme calm can precede sharp moves. Rising VIX also raises options premiums and margin requirements.
Related terms
- VolatilityVolatility measures how much and how quickly a price moves up and down — higher volatility means bigger, faster swings.
- Open Interest (OI)Open interest is the total number of outstanding (not yet settled) derivative contracts in a futures or options market.
- Correction vs CrashA correction is a moderate market decline (typically 10-20%), while a crash is a sudden, severe fall, often signalling or accompanying a bear market.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.