India VIX: Unveiling The Market's Fear Gauge

Brief:
The India VIX, short for India Volatility Index, is a benchmark that gauges the market's expectation of volatility in the next 30 calendar days. Introduced in 2003 by the National Stock Exchange (NSE), it functions similarly to the CBOE Volatility Index (VIX) in the US.

How Does it Work?
Unlike traditional indices that track stock prices, the India VIX doesn't reflect a specific value. Instead, it's derived from the pricing of Nifty options contracts. By analyzing the difference between the bid and ask prices of these options, a volatility figure is calculated, indicating the anticipated level of fluctuation for the Nifty 50 index over the next month.