India VIX Increasing by 22% in a Single day is Not Good

Open ZERO Brokerage FREE Share Trading Account - Buy and Sell Stocks Without Brokerage - Set GTT (Good Till Triggered) Orders on System and Forget

This is INDIA VIX on 31-Aug-20 at 1.19 pm (Source: https://www.google.com/search?q=india+vix):

INDIA VIX 31-Aug-20
INDIA VIX 31-Aug-20

This is NSE on 31-Aug-20 at 1.24 pm Source: https://money.rediff.com/index.html:

NSE 31-AUG-20

Can you see that both are inversely proportional?

Check out this post where I had also given a caution of India VIX surging and NSE falling.

What can you make out from a surging India VIX?

That when India VIX surges NSE will fall and vice versa.

How can this help the directional traders?

Well, this will not help 100% of the times, but if from 11 to 11.45 am you see that India VIX is surging then you can short Nifty futures and if from 11 to 11.45 am you see that India VIX is filling then you can buy Nifty futures. However, this trading must be done Intraday only. Next day the situation can change and you may see the position reversing.

Why India VIX Surges?

India VIX (Volatility Index) is a measure of PANIC in Indian markets or the environment. This could be due to some business news like good results/bad results/RBI policy/Budget etc and political news like it happened today (31-Aug-20).

Here is what happened today that spoofed the markets and India VIX surged:

Intrusion by Chinese troops in Eastern Ladakh gave enough ammunition to stock market bears to push domestic indices sharply lower on Monday, wiping off all morning gains. A general profit booking also weighed on the indices, analysts said.

Source: https://economictimes.indiatimes.com/markets/stocks/news/sensex-plunges-900-points-from-days-high-what-triggered-this-sudden-crash/articleshow/77847411.cms?

As I am writing this article at 1.47 pm Sensex is down by almost 700 points. This is the reason why India VIX is a very important factor to look at before taking a trade especially if its a directional trade.

Full-time traders like me, have time to read news and then take a decision to go long or short for the day if they decide to do Intraday trade, however people who have a job or are busy may not find the time to read the news. So for them, India VIX gives a good indication to take a trading decision.

However, for non-directional trades India VIX is not that important measure as either way they make money in 75% of the trades. My course strategies are mainly non-directional trading only. A non-directional trader may not look at India VIX if he/she decides to take a trade, however its a very important indicator for a directional trader.

COPYRIGHT INFRINGEMENT: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement.

INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However, every trade depends on the trader and his level of risk-taking capability, knowledge and experience. Moreover, stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website.

DISCLAIMER: I am NOT an Investment Adviser (IA). I am an Authorized Person (AP) of a Stock Broker. I do not give tips or advisory services by SMS, Email, WhatsApp or any other forms of social media. I strictly adhere to the laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles on this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given on this website. I am not responsible for any investment decision you take after reading an article on this website. Click here to read the disclaimer in full.

Disclaimer | Privacy Policy | About Me | Conservative Option Course
Find 200+ testimonials of my course:
What Traders Say About This Course

My student gets the Winner's Certificate of Zerodha 60-day Challenge - Click here and Open Stock Buy and Sell Free Account with Them Today!!!

Open ZERO Brokerage FREE Share Trading Account - Buy and Sell Stocks Without Brokerage - Set GTT (Good Till Triggered) Orders on System and Forget

Traditional brokers charge a lot for brokerage; however, this broker does not charge anything for stock buying and selling. Also, you can set GTT (Good Till Triggered) order after buying a stock, so that the system can sell the stock automatically at your target price even if you are not monitoring the market. Only 25k is blocked for option selling with hedge. Also, you get a lifetime free account in Sensibull (virtual trading app & strategy builder) which charges Rs.800/-+GST a month. It takes 5 minutes to open an account online. Click here and Open Free Account with Them Today >>