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Nifty And India VIX Are Inversely Proportional

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Sensex/Nifty and India VIX are inversely proportional.

Look at last 5 years graph of India VIX:

5 Years India VIX 29-Jan-2013 to 29-Jan-2018

Source: http://www.moneycontrol.com/indian-indices/india-vix-36.html

And now look at 5 years graph of Nifty:

5 Years Nifty 29-Jan-2013 to 2-Jan-2018

Though its hard to find out everyday – you can still see how Nifty has continuously gone up but Inida VIX has fallen.

India VIX has a range, usually from 10-15 which is normal.

In the last five years India VIX was highest at 37.71 on 09-May-2014:

Highest India VIX

India VIX rises during major events. Because Budget 2018 is just 2 days away India VIX has gone up from average of 13-14 to 17-18:

One Month Rise of INDIA VIX due to Budget 2018

It will come down from 2-Feb-2018 onward after the budget day 1-Feb-2018.

India VIX is fear factor index of traders. In the US traders can trade VIX but in India the volume is almost zero.

The trading symbol of the future contract of India VIX is INDIAVIX but no one trades.

Read this article to know more about India VIX trading:
India VIX Futures – Trading The Volatility

What you can do during Budget 2018?

Option buyers are at huge risk as VIX may drop anytime after the budget and they may lose money. If you are option buyer it is advisable to reduce your risk.

But that does not mean sellers will make huge money. Yes you will if there is a move in the direction you shorted your option, but if not it will become a naked future trade going wrong.


Budget (high volatile) times may make you more poor than rich.

Please trade with smaller quantity than what you usually trade.

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About the author: Dilip Shaw I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.

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