Calendar spread opportunity in INDIA VIX?

The 3 weekly contracts for India VIX presently are week 1 2340, week 2 2696, week 3 2965.5. It seems like a huge opportunity for setting up calendar spreads, am I missing something? Also what is the margin for setting up a calendar spread on India VIX?

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Trading Calendar spreads on India VIX is a little tricky because

  1. Since it is very tough to setup a position equivalent to the underlying VIX, there is no underlying to future arbitrage traders out there. So what this means is that the spread between VIX underlying and the Future can behave weirdly, but the short duration of the contract keeps it in check. 
  2. What the above point means is that on the weekly expiry which is a tuesday, the calendar spread could be as wide or narrow, so it won't really follow a set rule. 

So yeah, the spread is over 10% which is ridiculously high, but it may not be safe to play it expecting it to narrow. I remember a rule learnt early in life trading, if an opportunity seems too good to be true, hmm.. you must be missing something important.. ;)

Margin required is pretty high with election season around and volatility expected to increase. 

1 lot : 750 ,a contract is around 18lks, margin required is around 25 to 30%, guess around 5lks today. But you do get the calendar spread benefit, so if you buy 1 week and sell another, margin will be required only for 1 side. 

You can see the exact margin requirement here

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I would like to explain simple way what I learned from Nithin.

The Current Price of Indiavix are

7 April 2370

15 April 2730

22 April 3030

If we sale @ 3030 (22 April) and buy @ 2730 (15 April) we will get difference of 750x300=225,000

If the difference will reduce on 22 April say 250 we will get profit of Rs 37,500

If the difference will increase on 22 April say 350 we will lost Rs 37,500

Note–There 20-30 points jobbing in Bid Ask rate.

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Thanks a lot for the clarification.

Usually most contracts on exchange are a value of around 2lks, why is INDIA VIX a 18lk contract? It makes it really tough for retail investor to participate putting up 5lk as margin.

I guess this must be a SEBI requirement of keeping the contract value such high, because if NSE was on its own, I am sure the contract value would have been much lesser to encourage retail participation.
Cheers,

VIX will take time to evolve as a trading instrument for me. I will wait for big punters to add liquidity in it. VIX is totally new trading instrument. With a margin of 5 lakhs I can trade other instrument .