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India vix trading strategies

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india vix trading strategies

Normally a trader would have bought, what an option trader calls a Long Straddle strategy. In strategies this strategy, he would buy a long call and a long india option of the same strike price and same expiry. In order to earn profits from such a strategy, markets need to move sharply in either direction such that profit from one direction would be more than the loss from the other one. However, the strong following of such a strategy leaves very little on the table if at all as prices of both the call and strategies option rise before the event as they all fear the extreme. Traders india now have india instrument to earn from such an eventuality. India's premier exchange, National Stock Exchange NSE is launching India Vix Futures to attract traders who are willing to bet on volatility. India Vix is a volatility index based on prices of Nifty options. A higher value india volatility indicates that prices can change at a faster pace either going up or down as compared to the immediate past. Globally known as trading 'fear index', Vix is actually one of the best contrarian indicators in the world. Chicago Board Options Exchange CBOE which owns the Vix trademark say that since volatility high often signifies financial turmoil, Vix is often referred to as the investor fear gauge. The index is colloquially referred to as the fear index. In India, value of Vix has been computed by the NSE since November based on the out-of-the-money OTM option trading of the Nifty. It has touched a high of As it is mentioned in percentages, value of Vix can never be below zero or more than Historical data indicates that India Vix has a strong negative correlation of negative 0. This means that every time India falls, Nifty rises and every time it rises, it means that a fall is imminent. India Vix touched a value of 85 percent, a few days before Nifty touched a bottom strategies the Lehman Crisis. India Vix has a mean of The India Vix futures contract will have a weekly settlement and have three running contracts along with three spreads between the contracts spreads are the difference in prices between two contracts. One need not have the vision strategies a planning commission or a economist to trade the contracts. A smaller vision of one week or a maximum of vix month is good enough to determine the volatility. Shorter term Vix indices are more responsive to short term volatility which will be induced due to corporate earnings, government policy announcements or RBI's policy changes. Volatility is easier to predict than price. One will not know the price of Infosys after it announces its results, but it vix easier to know that volatility will increase immediately after profit and guidance numbers are announced by the company's management. Vix futures are also considered to be a better hedge than a index future. This is because Vix indices are more volatile and offered three to four times more returns than an asset based index. The high gains are precisely the reason why speculators are attracted strategies it. NSE however, has kept the lot size for each contract at around Rs 10 lakh which will attract a margin of Rs 2 lakh, thus making the product more expensive for the retail investor. Currently India Vix is in the lowest quartile, which partly explains the Nifty trading within three per cent of its all time high point. In order to promote the futures contract, NSE is offering rebate ranging between 10 and 40 per cent in transaction charges, depending on vix overall volume. Traders are often looking for trading strategies to trade a major event, say a budget or credit policy or even important results like Infosys. Upgrade To Premium Trading. Business Standard is happy to inform you of the launch vix "Business Standard Premium Services". As a premium subscriber you get an across device unfettered access to a range of services which include:. Welcome to the premium strategies of Business Standard brought to you courtesy FIS. Kindly visit the Manage my subscription page to discover the benefits of this programme. Today's Paper Latest Strategies Economy Finance Current Affairs International Management The Strategist Weekend Data Stories Chat. News Stocks Commodities IPOs Mutual Funds Mutual Fund Tools Derivatives BS Fund Manager. North East West South Election. Home Today's Paper Latest News Economy Finance Current Affairs International Management The Strategist Weekend Data Stories Vix. Markets Demonetisation BSTech GST BSSpecial. News Stock Quote Authors. Type address separated by commas. Volatility futures not for retail investors. Volatility is known as a measure of change. Read More On India Vix. PREVIOUS STORY NEXT STORY. Before you india trading the India Vix futures contract, here vix 10 points to consider. Quick Links Stock Market Live Portfolio Vix Market Upcoming IPO Personal Finance Stock Market News India Mutual Funds Gold Price Sensex. Index Stocks ACC Adani Ports Ambuja Cem. Asian Paints Aurobindo Pharma Axis Bank B P C L Bajaj Auto Bank of Baroda Bharti Airtel Bharti Infra. Bosch Cipla Coal India Dr Reddy's Labs Eicher Motors GAIL India Grasim Inds H D F C HCL Technologies HDFC Bank Hero Motocorp Hind. ICICI Bank Indiabulls Housing Finance Indian Oil Corporation Ltd. IndusInd Bank Infosys ITC Kotak Mah. St Bk of India Sun Pharma. Tata Motors Tata Motors-DVR Tata Power Co. Tata Steel TCS Tech Mahindra UltraTech Cement Ltd Wipro Yes Bank Zee Entertainment. Budget Budget Budget News Budget. Trading Services In Trading with. Your subscription - access to premium content has expired. Kindly click here to renew. Enter the characters shown in the image. 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CBOE- VIX Trading Strategies

CBOE- VIX Trading Strategies

4 thoughts on “India vix trading strategies”

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