India’s Own Variability Index – NIFTY 50 VIX

What is variability?

Volatility is the speed at which a certain security price moves. A high-volatility security has more price fluctuations than a low-volatility security. The faster the price changes up and down, the more variable it becomes. Thus, variability is often used as a measure of risk.

In general, a part is said to be more volatile when it has a larger difference in price change than a stock that is not so large in price change.

Variability can be obtained by looking at changes in stock prices over the last 30 days and calculating the standard deviation of interest rate changes in certain stock prices.

Variability Index (VIX)

The volatility index is an index that measures expected fluctuations in a stock price. The index is generally known as VIX, or as a high VIX, the fear index determines more volatility in the market and, consequently, more volatility in stock prices.

In the United States, before the financial crisis, the highest point touched by the VIX was 38 in August 2008. In late October of that year, the VIX value hit the roof and hit a surprising 89.53, causing concern for the startup. global financial collapse.

India launched its NSE VIX in 2008 based on the Nifty 50 Option benchmark prices. Nifty 50 identifies fluctuations in the prices of 50 shares over the next 30 days. “India VIX is a simple but useful tool for determining the overall volatility of the market. The index includes the full volatility included in the option prices. The volatility index is not only used as an indicator of the full volatility of the market, is available, “he said. NSE website.

The highest peak at NIFTY VIX was 85 in April 2008 and the lowest was 16.7 in March 2010. The lowest note to date on the NSE VIX said there was a low volatility in the market where investors could accept a low volatility.