Reflecting the presence of more unsettled investors on the Wall Street, compared with those on Dalal Street, the Indian market volatility has turned lower than that on the US market. In a rare trend, this month (May) has seen the National Stock Exchange-calculated volatility index, called India VIX, quoting. at day’s close, at levels below the Chicago Board Options Exchange-calculated volat­ility index, called VIX.

NSE’s India VIX measures the 30-day expected volatility of the S&P CNX Nifty Index, while CBOE’s VIX does the same for S&P 500 Index.

Both are calculated using the implied volatility in the daily traded prices of the options in their respective indices.

A VIX of 40 means that options trades are telling the story of an expected movement of 40 per cent in the index, in either direction, in the next 30 days.

Since its launch in November 2007, India VIX has closed lower than CBOE VIX on only about 108 trading days out of about 630 trading days.

In this year, except for most trading sessions in May, India VIX has closed higher than CBOE VIX on almost all the days.

The equity indices of high-growth markets such as India tend to trade in a wider range as compared with low-growth developed markets.

The recent trend has suggested that the latter can too gyrate wildly, much to the discomfort of the investors on Wall Street.