Vix – Nifty Range Explained

How to benefit from the data in Vix

The Vix can go high and the Vix can go low. A high vix reading is associated with a market going south and a low vix regime is mostly a bull market in motion.

In the short term markets we trade in every day, the vix provides valuable information on how to recalibrate the information from the vix to position ourselves to profit from the market.

In this post , we will show you how to use the Vix readings to form a range to trade with in every session as also for the duration of the week.

Utilizing VIX to Predict Nifty or BankNifty's Range for the Next Day

For our long-term readers, you might recognize this approach, which is an adaptation of a technique we discussed a few years ago. Here’s a step-by-step guide that remains applicable regardless of when you’re reading this:


  • Previous day’s Nifty or BankNifty Spot Price (referred to as “Spot_Price”)
  • Previous day’s VIX value (referred to as “VIX_Value”)
  • Days until expiration (referred to as “Days_To_Expiry”)


  1. Record the Previous Day’s Spot Price: This will be your “Spot_Price.”

  2. Note the Previous Day’s VIX Value: This will be your “VIX_Value.”

  3. Determine Days Until Expiration: This can be any number of days before the expiry. Label this “Days_To_Expiry.”

  4. Normalize Days to Expiry: Divide the number of days in a year (365) by "Days_To_Expiry". \text{Normalized_Days} = \frac{365}{\text{Days_To_Expiry}}
  5. Calculate Root Value: Take the square root of "Normalized_Days". \text{Root_Value} = \sqrt{\text{Normalized_Days}}
  6. Normalize VIX: Divide "VIX_Value" by 100. \text{Normalized_VIX} = \frac{\text{VIX_Value}}{100}
  7. Calculate Division Value: Divide "Normalized_VIX" by "Root_Value". \text{Division_Value} = \frac{\text{Normalized_VIX}}{\text{Root_Value}}
  8. Determine Range Shift: Multiply "Division_Value" by "Spot_Price". \text{Range_Shift} = \text{Division_Value} \times \text{Spot_Price}
  9. Predict the Range: Add and subtract "Range_Shift" from "Spot_Price" to get the potential range for the day. \text{Upper_Bound} = \text{Spot_Price} + \text{Range_Shift} \text{Lower_Bound} = \text{Spot_Price} - \text{Range_Shift}

Result: Your predicted range for the day is between “Upper_Bound” and “Lower_Bound.” Remember, if the VIX rises during the day, the range could also expand. Always stay updated with live market data!

The Calculation

Here is a quick calculation to see how you can use the Vix to arrive at what the range of the Nifty or BankNifty would be for the next day.

Let’s look at yesterday’s Nifty close and Vix as examples.

We closed at 5285 on the Nifty Spot and 32.38 in the Vix.

Step 1 : Look at the spot price from the day before ( 5285 )

Step 2 : Look at the Vix from the day before ( 32.38 )

Step 3 : Look at the days to expiry ( 1).You can do this any number of days before expiry.

Step 4 : Divide this figure from step 3 by the nos of days of the year ( 365/1 )
You get 365.

Step 5 : Take the square root of the figure in step 4 ( 19.10)

Step 6 : Divide Vix by 100 ( 0.3238)

Step 7 : Now divide step 6 by step 5.You get 0.016948

Step 8 : Multiply step 7 by the spot price of step 1 ( 0.0094 x 5285 = 89.57 )

Step 9 : Add and subtract step 8 from step 1 ( 5374-5195)

The range is 5374 to 5195 for today as long as Vix remains below 32.38. If it increases during the day then range may also increase.

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