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[SID2060]

Volatility Index is a measure of market’s expectation of volatility over the near term. Volatility is often described as the “rate and magnitude of changes in prices” and in finance often referred to as risk. Volatility Index is a measure, of the amount by which an underlying Index is expected to fluctuate, in the near term, (calculated as annualised volatility, denoted in percentage e.g. 20%) based on the order book of the underlying index options.

India VIX is a volatility index based on the NIFTY Index Option prices. From the best bid-ask prices of NIFTY Options contracts, a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days. India VIX uses the computation methodology of CBOE, with suitable amendments to adapt to the NIFTY options order book using cubic splines, etc.

FOR MORE INFO VISIT:

http://www.nseindia.com/content/press/prs_vix.htm



THERE IS A NEGATIVE CORRELATION BETWEEN INDIA VIX INDEX AND S&P 500.. IF INDIA VIX GOES DOWN IT MEANS THERE IS CONFIDENCE IN THE MARKET AMONG THE TRADERS AND INVESTORS ... IF IT GOES UP THAT REFLECTS FEAR IN THE MKT.... ALSO IF INDIA VIX GOES DOWN, S&P NIFTY WILL PROBABLY GOES UP... RIGHT NOW THE INDIA VIX INDEX IS IN STRONG DOWNTREND WHILE S&P NIFTY INDEX IN STRONG UPTREND....I WISH INDIA VIX INDEX GOES DOWN EVERY DAY AFTER DAY.

I AM ATTACHING FEW CHART WHICH WILL SHOW THIS NEGATIVE CORRELATION MORE CLEARLY...

EOD charts for NSE's INDIA VIX INDEX are now available. Please use INDIAVIX as the symbol in EOD charts. Intraday VIX charts are not available yet.

HAVE A NICE DAY. SIDDHARTH