Tuesday 7 July 2020

How does Indian Market measure Volatility? | India VIX explained by ET NOW

How does Indian Market measure Volatility? | India VIX explained

Video description:
Volatility is an important tool to gauge the Sentiment in markets, especially a tool to gauge FEAR Factor. In the Feb-Mar’20 correction, the Volatility had gone through the roof spiking to an unprecedented upmove in a short span of time. How do you measure Volatility: India VIX is the index to gauge volatility in the markets. The index is formed based on the bid-ask trades of the Nifty(Index) options chain with a time horizon of 30 days in perspective. When markets are in an uptrend, the sentiment is extremely positive and buoyant and therefore the Fear factor drops significantly. This in effect results in India Vix trending down and vice versa. In a nutshell, the INDIA VIX is negatively correlated with the Index price moves. There is a Cause and Effect relationship between the India VIX and the Indices, sometimes the fall gets exaggerated because of the unprecedented rise in India VIX, and sometimes when Index rallies up strongly, the India VIX tends to go through prolonged periods of consolidation. Currently, the VIX has entered into oversold territory. It has completed a 76.8% Fibonacci retracement as well after rising from 10 to 86+ in the Feb-Mar’20 correction. Any rise in India VIX from current levels could lead to some aggressive comeback of Volatility and hence could cause Indices to correct from their 5-month highs. This is one key factor to watch out for. Kunal Bothra explains. Watch! Subscribe To ET Now For Latest Updates On Stocks, Business, Trading | ► https://goo.gl/SEjvK3 Subscribe Now To Our Network Channels :- Times Now : http://goo.gl/U9ibPb The NewsHour Debate : http://goo.gl/LfNgFF To Stay Updated Download the Times Now App :- Android Google Play : https://goo.gl/zJhWjC Apple App Store : https://goo.gl/d7QBQZ Social Media Links :- Twitter - http://goo.gl/hA0vDt Facebook - http://goo.gl/5Lr4mC G+ - http://goo.gl/hYxrmj Website - www.etnownews.com
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