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Is it possible to predict probable Top and Bottom on #Nifty #Nifty50 using #INDIAVIX ?
Lets find out.
#INDIAVIX is a measure of market’s expectation of volatility over the near term. VIX is computed using the order book of the underlying index options i.e #NIFTY.
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Lets find out.
#INDIAVIX is a measure of market’s expectation of volatility over the near term. VIX is computed using the order book of the underlying index options i.e #NIFTY.
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@rohit_katwal VIX is denoted as an annualized percentage. Higher the VIX, higher the expected volatility.
When Nifty goes up, VIX reduces. When Nifty goes down, VIX increases. Its an inverse relationship. Why?
In my past tweets, I mentioned IV is demand and supply.
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When Nifty goes up, VIX reduces. When Nifty goes down, VIX increases. Its an inverse relationship. Why?
In my past tweets, I mentioned IV is demand and supply.
...2/n
@rohit_katwal Puts are bought as hedge. When fear is less in the market, demand of puts is less and hence prices are low and hence low IV which results in Low Vix. When fear sets in, market dips and demand for put increases with increase in IV, VIX increases.
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