Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Year 2018 Starts with Increased Volatility?

1 min read

IndiaVIX is a volatility measure of the future expected volatility. It is calculated based on the bid and ask price of the out of the money options for near month and mid month options. India VIX during the year 2017 spent most of the time below 14 which eventually turns out to be a slow moving trending markets. In fact during the entire year 2017 , Nifty never seen a 2% negative loss on EOD basis. That shows the confidence of the majority of the market participants.

INDIA VIX

During the Year 2017 volatility spiked twice due to UP Elections and Gujarat Elections results expectations from the market participants. Future implied volatility spikes up not only because of there is fear on the street but also when there is an upcoming major planned global or local political events.
Especially where there are binary events like BRExit, Election Results..etc where the outcome is binary and unpredicatable, long term players gets into hedge mode and markets will be completely dominated by speculators make the implied volatility to spike and the volatility tend to crush just before the event or after the event results are out.

Currently India-VIX self sustaining above 200 moving average. More it sustains above 12.18 levels higher the possibilities of increased volatility.

CBOE VIX

In the year CBOE (Mr Robert Whaley) started publishing VIX in realtime for S&P 500 which is calculated based on the bid and ask quotes on the implied volatility of the calculated S&P 500 index options. During the Year 2017 most of the time CBOE VIX spend below 13 and even tested historically low volatile levels. Current VIX reading is at 11.04 up by 8.45% on last friday which makes the CBOE VIX to stay above 200 moving average.

May be its time to start giving attention to volatility as period of low volatility is followed up by period of high volatility and the global markets are likely to flare up with increased volatility in the start of 2018.

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Bearish Option Strategy: Nifty Hedged Puts – Nov 2020…

Structurally Nov 2020 series is closing the long pending island gap reversal which is an investing reference. However, emotions are running high during the...
Rajandran R
42 sec read

What Could Possibly Go wrong with Nifty?

As of last 9th Oct 2020 closing of Nifty (11914), PE ratio stands at 34.71. By any means it indicates euphoric markets. Recently there...
Rajandran R
1 min read

Nifty Futures Short Term Overview – July 2020 Series

Markets are trading calm compared to the Month of March, Apr, June 2020. Volatility cooled off and trading ranges get smaller and smaller. However,...
Rajandran R
25 sec read

Leave a Reply

Get Notifications, Alerts on Market Updates, Trading Tools, Automation & More