India Vix is the volatility index for Indian Stock Market which signifies the fear, greed and the volatility in the indian indexes like Nifty & Banknifty.
Right now, the value of India Vix is at all time low support level of around 10. We will discuss, how traders should plan their trades during this range of volatility.
India Vix Relation with Fear & Volatility
Generally the normal range of India vix remains between 15 to 20 for balanced fear and volatility in the Indian markets.
India Vix is directly proportional to Fear and inversly proportional to the fear. Hence, if India vix is high, there will be more fear and market will remain volatile. But if India Vix is down, there will be less fear in the market and the volatility will be low.
India Vix Relation to Volatility Calculation
A simple mathematical analysis reveals that generally if India Vix rises by 1% then it will lead to 0.4% to 0.5% movement in the Nifty Index Downside.
If India Vix falls by 1% the there remains possibility of 0.4% to 0.5% upside movement in the nifty Index Chart.
Means, we can generally consider half percent of the move in India vix to happen in the Nifty Index of Indian Market.
Current India Vix Day Chart Range
You can check the current daily chart of India Vix as shown the in chart below:
If, the chart is not loading here, you can click over it and go to tradingview to analyse the detailed chart of India Vix to find out the current trading range to make trading decisions in the market.
Advice For Retailers Based on India Vix
If you are option buyer, then I would like to advice you to trade with less quantity and book small points like 15-20 in the Nifty and 25-30 in the Banknifty when India Vix is below 14 as market moves less.
Similarly, you can follow vice-versa when the market is giving good moves like Nifty 200-300 points daily and 400-500 points in banknifty.
The reason behind this advice is that if you are an option buyer and India Vix is low, it will lead to less movement, hence premium will decay.
Conclusion
That is all I wanted to share with you all based on my experience of trading and observation based of India Vix. If you like this post, do let us know in the comment section below.
