Index Of Badla [verified]

When the Badla rate doubles within a week, it signals a shortage of cash lenders. This is a leading indicator of a market crash. In 1992, the Badla rate hit over 30% just before the BSE crashed 40%.

| Badla Index Value (Annualized) | Market Condition | Interpretation | |-------------------------------|------------------|----------------| | < 6% | Very low carry cost | Excess liquidity, bearish sentiment (no demand for leverage) | | 6% – 12% | Normal range | Balanced, functioning badla market | | 12% – 24% | High demand for carry | Bullish sentiment, long positions expensive to hold | | > 24% | Extreme stress | Shortage of financiers, possible market top or margin call cascade | | Negative (rare) | Reverse Badla | More short positions than long – bears pay bulls to carry short forward (ultra-bearish) | index of badla