What it is
India VIX is NSE's volatility index — an estimate of expected 30-day NIFTY volatility derived from options prices. High VIX = market expects turbulence. Low VIX = market expects calm. It is a consensus forward-looking number, not a forecast.
Range
Historically, India VIX spends most of its time between 11 and 25. Below 12 signals complacency. Above 20 signals elevated concern. Above 30 is almost always crisis territory — 2020 March, major earnings surprises, geopolitical events.
How options respond
Option prices scale with VIX. A 5% jump in VIX can increase option premiums by 15–30%. For options sellers, this is opportunity. For options buyers entering at high VIX, this is the tax you pay for buying in a fear regime.
Directional strategy implications
Rising VIX often accompanies falling markets. Falling VIX often accompanies rising markets. This is not a forecast rule — it's a correlation with exceptions — but it shapes how systematic strategies size positions. Higher VIX = smaller positions, tighter stops.
Systematic use
The Sleeping Trade engine uses VIX as an input into three things: (1) strategy selection (sell premium in high VIX, buy in low), (2) position sizing (scale down in high VIX regimes), and (3) stop placement (wider stops in high VIX to avoid noise-triggered exits).
Retail mistakes
Retail traders often ignore VIX and buy OTM weekly options during low-VIX regimes (where the options are cheap but delta is low and theta is fatal) or at VIX highs (where options are expensive and subsequent VIX crush destroys value). Both are predictable failures.
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