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This Article is From Sep 26, 2018

Will Volatility Fall This October?

Will Volatility Fall This October?
An electronic chart shows the performance of the Ibex 35 index during the last twelve months. (Photographer: Antonio Heredia/Bloomberg)

Volatility in Indian equities jumped 35 percent in September, the most in nearly three years, as a string of defaults by IL&FS Ltd. triggered liquidity concerns in the debt market and a weaker rupee increased the possibility of another rate hike by the central bank.

There's a solace though. Historical trend shows that in six of the last seven years, India VIX, a measure of volatility in Nifty 50 index option prices, fell in October. The only time it rose during the period in 2014 was by a meagre 1.1 percent.

Will the trend hold this October?

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