India VIX Index rallies: What does market volatility mean for investors?

Last Updated16/05/2024

India Volatility Index, which is an indicator of the market’s expectation of volatility over the near term.
Currently, the fear among the market players is coming from the outcome of the ongoing Lok Sabha elections.

Volatility is often described as the ‘rate and magnitude of changes in prices’ and in finance often referred to as risk.
- Usually, during periods of market volatility, the market moves steeply up or down and the volatility index tends to rise.
- As volatility subsides, the Volatility Index declines..

India VIX is a volatility index computed by the National Stock Exchange based on the order book of NIFTY Options.
India VIX indicates the investor’s perception of the market’s volatility in the near term i.e. it depicts the expected market volatility over the next 30 calendar days.
The higher the India VIX values, the higher the expected volatility and vice versa, as per NSE.
The India VIX has risen by around 53 per cent to above 20.
A critical domestic event like the Lok Sabha elections does command a certain level of uncertainty for its outcome