VIX vapour rising: Election-related anxiety catches up with the markets

Volatility index shoots up days after a record low

The India Vix, or the volatility index, dived 20 per cent to close at an all-time low of 10.2 on April 22, just days after India's marathon seven-phased elections commenced.
 

This, experts thought, was unusual.
 

A measure of the market's expectation of volatility in the next 30 days, the Vix is also called the “fear gauge”. Lok Sabha elections are usually a period of volatility for the markets and anxiety for traders.
 

The Vix is computed on the basis of the NIFTY Index Option prices. The higher the reading, the higher is the expected volatility. A lower reading says option