Volatility Index (VIX) is a market indicator that measures the expected volatility of the stock market over a specific period, often referred to as the “fear gauge” of the market.
The Volatility Index (VIX) reflects market expectations of near-term price fluctuations based on options data. A higher VIX indicates that investors expect large price movements (high volatility), while a lower VIX suggests stable market conditions.
In India, the volatility index is known as India VIX, which measures expected volatility in the Nifty 50 index. Globally, investors track similar indices to understand market risk and sentiment.
High VIX: Signals uncertainty, fear, or potential market downturn
Low VIX: Indicates confidence and stable market conditions
Traders and investors use the volatility index to manage risk, adjust portfolios, and plan hedging strategies. However, VIX does not predict market direction—it only measures expected volatility.
"If India VIX rises from 15 to 25, it suggests that traders expect larger price swings in the coming days, possibly due to economic news or global events."