What is India VIX
10 Oct 2025

India VIX: Volatility Index of the Indian Stock Market

Key Takeaways

  • The India VIX, which stands for Volatility Index of India, measures the expected volatility of the Nifty 50 over the next 30 days.
  • A high reading on the India VIX chart signals fear and uncertainty, while a low reading indicates market stability.
  • Traders often refer to VIX India as Nifty VIX when planning risk management and options strategies.
  • Factors such as expiry time, interest rates, and bid-ask spreads can influence levels shown on India VIX.
  • The index works best as a supporting indicator rather than a sole predictor of market movements.

What is India VIX

The India VIX, also known as the Volatility Index of India, indicates the expected volatility of the Nifty 50 stock market over the next 30 days. The India VIX chart is updated in real time by the National Stock Exchange (NSE) during trading hours. It is also known as the ‘fear gauge’ since it signals market uncertainty and risk.

This index was introduced by the NSE in 200, its methodology is derived from the Chicago Board Options Exchange (CBOE) in 1993.

Importance of Volatility Index India

VIX India helps investors make informed decisions for investments. Here are some key reasons why this index is one of the important indicators for stock market behaviour:

Market Sentiment Indicator: Reflects how the market collectively expects prices to move in the near term.

Risk Assessment Tool: Assists investors and traders in gauging potential market fluctuations.

Option Data-Based: This index, often called NIFTY VIX, is calculated using near- and next-month Nifty 50 index options traded on the NSE.

Portfolio Planning: Helps in timing orders, hedging positions, and managing risk exposure.

Volatility Benchmark: This is a reference point for comparing current market conditions with historical trends.

Decision-Making Aid: Useful for derivative traders, fund managers, and retail investors to decide entry and exit points.

Strategic Hedging: Investors can use VIX levels to implement protective strategies, such as buying options during high expected volatility.

Investors seeking a structured approach to managing risk and returns may also explore the wealth management services offered by DBS Treasures for tailored strategies beyond the Volatility Index India.

How is India VIX Calculated?

The NSE calculates India VIX chart by deriving prices from NIFTY 50 options. Here’s a breakdown of the calculation process:

Option Selection: Out-of-the-money calls and puts from near- and next-month expiries are used.

Implied Volatility Extraction: The market’s expected volatility is inferred from current option prices using a reverse Black-Scholes approach.

Weighted Average Across Strikes: NSE calculates a composite volatility by weighting implied volatilities across strike prices.

Annualization: The 30-day implied volatility is converted into an annualized figure for standard comparison.

Continuous Update: Values are refreshed in real time to reflect the latest market conditions.

India VIX Formula

India VIX = √ (Weighted Average of 30-day Implied Variances) × 100

Example

Suppose:

  • Near-month implied volatility = 14%
  • Next-month implied volatility = 16%
  • Weighted 30-day implied volatility = 14.8%

Annualized India VIX: 14.8 × √ (365 ÷ 30) ≈ 51

This means the market expects moderate short-term volatility in the NIFTY 50 index.

Factors considered while calculating the India VIX

The value of India VIX is determined by four primary factors:

Expiry Time

Time left until the options expire influences implied volatility. Lower expiry times can make VIX movements more sensitive.

Interest Rate

Option prices are affected by interest rates, which in turn influence India VIX. Higher interest rates generally increase option premiums and affect expected market volatility.

Forward Index Level

The estimated level of the NIFTY 50 index, as indicated by option prices, helps determine VIX. Large discrepancies between current and forward levels can amplify expected volatility.

Bid-Ask Prices

The VIX India is influenced by the gap between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. Wider bid-ask spreads can increase the calculated VIX, reflecting higher expected volatility in the market.

How to Interpret India VIX Values

Before we cover how to interpret India VIX values, it’s important to understand the range of India VIX index and what it signifies:

India VIX Value Range

Market Condition

Below 15

Low Volatility

15 to 25

Moderate Volatility

Above 25 to 35+

High Volatility

India VIX Levels and Their Market Implications

  • High VIX (25 and above) – At this level, market volatility is elevated, which implies that there is uncertainty in the stock market. Investors are advised to be more cautious and look for opportunities to protect their portfolio. Diversifying your investments into less volatile assets can help mitigate risk.
  • Moderate VIX (15 to 25) – This is India VIX’s normal range. It reflects moderate volatility. Investors can maintain balanced strategies and monitor market movements without major adjustments.
  • Low VIX (below 15) – This indicates that the market is more stable with minimal fluctuations. Investors would find this situation more favourable to take more risk, explore new financial instruments, or increase equity exposure.


Role of India VIX in Risk Management

The Volatility Index of India assists various market participants in managing risk and formulating their investment strategies:

Options Traders

High VIX values indicate expensive option premiums due to expected volatility, which signals option traders to consider selling options. Low VIX values signal cheaper options, which encourages more investment.

Portfolio Managers

The India VIX serves as a risk management tool for portfolio managers and fund managers. Higher VIX levels indicate increased market risk, which leads to shifting investment strategies towards defensive sectors. On the other hand, low or moderate VIX levels lead to an increase in equity exposure.

Long-Term Investors

Frequent changes of VIX doesn’t impact long-term investment strategies as the main focus is to have a balanced mutual fund portfolio.

Short-Term Traders

Such market players usually interpret high India VIX levels as indications of opportunity for short-term profitability through heightened market actions, leveraging volatility. Low VIX periods can be seen as unfavourable to such plays because price action is subdued.

How Investors Can Use India VIX for Trading

When considering India VIX index for trading, it’s important to note that there isn’t a single “good” VIX level for all traders. Here are a few tips on how Investors can use this index:

Watch for sudden spikes

A sudden spike in India VIX chart typically indicates future market panic. It could be a signal to de-leverage and wait for clarity before going into trades.

Combine VIX with Index levels

Don't consider VIX as the sole aspect for investment decisions. Compare it with Nifty's support and resistance levels to measure if the move is genuine or mere noise.

Remain alert in low VIX phases

Persistently India VIX share price values suggest market stability, but they can sometimes create a false sense of security. Fluctuations may still trigger sharp moves.

Observe Global Influences

India VIX share price often reacts to developments in global markets. Keeping track of international volatility indices can help anticipate possible spillovers.

Focus on Trend Direction

The trajectory of India VIX chart matters as much as the level. A rising trend reflects growing uncertainty, while a declining trend points to improving confidence.

Historical Trends of India VIX

An analysis of the Volatility Index of India levels between September 2024 and September 2025 illustrates how volatility changed over the course of the year:

Common Range

India VIX remained within 10-16 most days, indicating calm to moderately uncertain market conditions.

Spikes Over 20

Increased volatility and fear among investors during periods of market stress or noteworthy economic events were indicated by the notable spike in April 2025.

Overall Pattern

Stability prevailed, punctuated by sporadic steep rises, in line with normal market trends.

Investor Sentiment

VIX levels below 20 on the majority of days indicated optimism, and fleeting spikes as prompts to get ready for risk.

Note: Based on daily India VIX values from September 2024 to September 2025 as published by NSE.

Limitations of India VIX as a Market Indicator

While India VIX can be considered as a reflection of the market sentiment, it is not the definitive tool to make investment or trading decisions. It’s important to be aware of the limitations of India VIX, such as:

  • It’s not for speculative trading: The India VIX signals volatility in the current stock market; it doesn’t indicate the future performance of NIFTY or the broader market.
  • Ideal for short-term volatility: Investors will find it more beneficial to use India VIX to understand the short-term trends of the NIFTY option prices, typically up to 30 days.
  • India VIX does not reflect market movement: This is one of the most important distinctions for new investors who are relying on India VIX. The change in India VIX does not ensure that the market will move in line with expectations.

Investors looking to invest in stock market should use other indicators such as Market Mood Index, Momentum Indicators and Relative Strength Index.



Conclusion

India VIX serves as a measure of market volatility and investor sentiment, offering guidance for short-term decision-making. While it cannot predict market direction, it helps investors assess risk and adjust strategies.

To complement market-linked investments with stability and liquidity, investors may explore a DBS Treasures Premium Savings Account, which provides a secure foundation alongside opportunities for long-term financial growth.

Frequently Asked Questions (FAQs) about India VIX

  1. What is the time frame of India VIX?

    India VIX reflects the expected volatility over the next 30 calendar days, based on Nifty option prices.

  2. What causes spikes in India VIX?

    Spikes occur when market uncertainty rises, often due to global events, policy changes, earnings announcements, or sharp market movements. These events can push up the index level and impact India VIX share price.

  3. Why is India’s VIX high today?

    India VIX today may be elevated due to global market cues, economic data releases, geopolitical tensions, or upcoming policy announcements. Investors should check daily for change in the VIX India. 

  4. What does it mean when India VIX decreases?

    A decrease in India VIX signals lower volatility expectations, suggesting market stability and improved investor confidence.

  5. How to predict market using VIX?

    India VIX does not indicate market direction but shows the expected level of volatility. A rising India VIX share points to heightened uncertainty, while a falling India VIX suggests calmer conditions ahead.

  6. Can I trade in both Futures and Options on India VIX?

    No, only futures on India VIX are available for trading on NSE; options on India VIX are not offered.

Disclaimer: The information provided in this article is for general informational purposes only. For specific guidance or details, please consult with your Relationship Manager or relevant expert.