Do traders (Futures, Options, Stocks) use India VIX in their trading plan? How?

I read in one of the blogs that incase of VIX above 20, the trader needs to stay out or reduce position size.

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Madan Kumar, Zerodha winner does. He uses VIX to note when market is becoming volatile, and thus exits his position incase his VIX limits are breached.


Any more details on the logic behind it? Isn’t volatility good for traders?

Since he is a swing trader, he fears that there might be larger gaps when VIX is beyond his threshold. You may want to read the QnA session in his interview page. Google - ‘zerodha madan kumar’ and then on the page search for the words ‘VIX’. Truly one heck of an interview, very inspiring.

Thanks for the kind words flyingshark. Nithin was kind enough to interview a small-timer like me and generous enough to keep that page alive (everything takes server space).
Well, as i carry positions overnight, VIX plays a major role in my trade plan. When VIX is around or above 22-25, i close out 50% of my position. The idea is to protect the capital at all times and higher VIX is just an indication that uncertainty/fear is high. Adverse gap against us can always put us down emotionally/financially.

Thanks for the reply Madan. It gave me a clear picture on how you use VIX and I am sure kam.tngr also will benefit from your reply.

Madan, do you reduce the position size before entering the trade as well if the VIX is above 22?
Recently the VIX has gone above 20 but not reached 22 yet, have you limited your position size?