Volatility on WebNotes

Intraday margin increases on volatile days

Wed, 20 May 2026 00:00:00 +0000

Intraday margin requirements increase on high-volatility days as VAR (for equity) and SPAN (for F&O) parameters update to reflect the elevated risk. This can affect existing intraday positions even without new trades.

How it happens

The exchange’s VAR / SPAN parameter file refreshes:

End of day (default).
Mid-day during exceptional volatility.
Multiple updates on extremely volatile days.

When parameters increase:

VAR (equity intraday margin) rises.
SPAN (F&O margin) rises.
ELM may also adjust.

Open positions’ required margin scales up accordingly.

Standard deviation in mutual fund performance

Mon, 18 May 2026 00:00:00 +0000

Standard deviation measures the volatility of a mutual fund’s returns, indicating the typical deviation of returns from the average. Higher standard deviation = higher volatility = higher uncertainty in outcomes.

Annualised standard deviation

For mutual fund analysis, returns are typically annualised:

Monthly returns are computed and annualised by multiplying by √12.
The annualised standard deviation indicates the typical year-to-year variation.

Typical ranges by fund category

Category	Typical Annual Std Dev
Large-cap equity	18-25%
Mid-cap equity	25-30%
Small-cap equity	30-35%
Aggressive hybrid	12-18%
Conservative hybrid	5-10%
Long duration debt	6-10%
Short duration debt	2-4%
Liquid fund	0.5-1%

Interpretation

One standard deviation rule

Approximately 68% of returns fall within ±1 standard deviation of the mean. For an equity fund with:

How to use Bollinger Bands on Kite

Sun, 17 May 2026 00:00:00 +0000

Bollinger Bands are a volatility-based envelope developed by John Bollinger in the early 1980s and now one of the most widely-used charting indicators on Indian retail platforms. They are built into Kite charts on both the ChartIQ and TradingView engines with Bollinger’s original 20-period, 2-standard-deviation defaults. The indicator’s enduring appeal is the way it visualises volatility regimes: the bands widen when price action becomes volatile and narrow when volatility compresses, often before a directional breakout.

Standard deviation as a mutual fund risk metric

Tue, 12 May 2026 00:00:00 +0000

Standard deviation in the context of mutual funds is the annualised measure of how much a fund’s periodic returns deviate from its average return. It captures total risk, both upside and downside volatility, making it a symmetric risk measure. It is the denominator in the Sharpe ratio and appears in every AMC’s monthly factsheet as a standard AMFI-mandated risk disclosure.

A higher standard deviation indicates a more volatile fund whose returns fluctuate widely around the mean; a lower standard deviation indicates steadier, more predictable returns.