# Volatility Quality Index

`D07-F06-A06` · Technical Indicators → Range and Volatility Indicators · archetype `series-transform` · difficulty 2/5 · verification **verified**

Full page: https://docs.thefintechbuilder.com/technical-indicators/range-and-volatility-indicators/volatility-quality-index/
Agent skill: `npx skills add IslamBaraka90/Fintech-Algorithms-Library` — https://docs.thefintechbuilder.com/guides/agent-skill/

## Install and import

```bash
npm install fintech-algorithms
```

```ts
import { volatilityQualityIndex } from "fintech-algorithms/technical-indicators/range-and-volatility-indicators/volatility-quality-index";
```

## Signature

```ts
volatilityQualityIndex(input)
```

Volatility Quality Index: accumulates each bar's true range signed by the direction of its close, then smooths the running total with an exponential moving average.

## Parameters

| Name | Type | Required | Notes |
| --- | --- | --- | --- |
| `input` | `TopicInput` | yes | `bars` is the required OHLCV array -- each bar carries `timestamp`, `open`, `high`, `low`, `close`, `volume` and an optional `basis`, strictly ordered by timestamp. From `parameters` this topic reads only `period` (default 14, integer >= 2), the EMA length applied to the cumulative signed range. |

## Returns

`TopicResult`

`series` holds `raw`, the signed true range contributed by each bar, and `value`, the EMA of the running total of `raw`. `latest` carries the last of each. `raw` has no warm-up at all -- it is zero on the first bar and populated from there on -- which is why `ready_at` is 0; `value` carries `period - 1` leading nulls.

## Warm-up

The first `0 bars for `raw`, `period - 1` bars for `value` (13 at the default period)` positions are `null`. `raw` is defined from the first bar, so the result reports ready at index 0 even though `value` is still null there. Callers reading `latest.value` on a short history must check for null themselves.

## Errors

- When `parameters.period` is not an integer >= 2 — throws Error
- When a bar is missing open, high, low, close, or volume, or one of them is not a finite number — throws Error
- When bars are not strictly ordered by timestamp, or a bar's high is below its open, low, or close — throws Error

## Complexity

Time `O(n)`, space `O(n)`.

## Worked example

Captured by running this function on the input its own test provides. Real output of real code — but not asserted against a published figure.

### Input

`input`:

```json
{
  "bars": [
    {
      "timestamp": "2024-01-02",
      "basis": "synthetic-unadjusted",
      "open": 100,
      "high": 101.45,
      "low": 98.695,
      "close": 100,
      "volume": 750000,
      "benchmark": 200
    },
    {
      "timestamp": "2024-01-03",
      "basis": "synthetic-unadjusted",
      "open": 101.49111452,
      "high": 103.38381693,
      "low": 100.05480022,
      "close": 101.78791214,
      "volume": 795117,
      "benchmark": 200.56326135
    },
    {
      "timestamp": "2024-01-04",
      "basis": "synthetic-unadjusted",
      "open": 102.45519048,
      "high": 104.6701838,
      "low": 100.91147007,
      "close": 102.9549389,
      "volume": 840234,
      "benchmark": 201.11020913
    }
  ],
  "parameters": {}
}
```

### Call

```ts
volatilityQualityIndex(input)
```

### Returns

object with 9 fields: topic_id, title, state, ready, ready_at, series, latest, parameters, …

```json
{
  "topic_id": "D07-F06-A06",
  "title": "Volatility Quality Index",
  "state": "calculated",
  "ready": true,
  "ready_at": 0,
  "series": {
    "raw": [
      0,
      3.3838169299999947,
      3.758713730000011,
      3.9386350599999957,
      -3.829996080000001,
      -3.4696505999999943
    ],
    "value": [null, null, null, null, null, null]
  },
  "latest": {
    "raw": -3.1208633100000043,
    "value": 12.394917882563625
  },
  "parameters": {},
  "diagnostics": {
    "causal": true,
    "input_count": 96
  }
}
```

## Verification and provenance

Tier: **verified** (via E).

The worked example below is the figure published in this algorithm's article, replayed and asserted by the test suite on every build. The arithmetic cannot drift without the build failing.

Both tiers guarantee the signature. Full explanation: https://docs.thefintechbuilder.com/guides/verification/

Generated from the docs.json payload shipped inside fintech-algorithms@0.13.0.
The signature and parameter list are checked against the compiled implementation at build time,
so a description that contradicts the code fails the build rather than reaching this file.

## Links

- Article (how it works, step by step): https://thefintechbuilder.com/technical-indicators/range-and-volatility-indicators/volatility-quality-index/
- Implementation source: https://github.com/IslamBaraka90/Fintech-Algorithms-Library/blob/main/src/technical-indicators/range-and-volatility-indicators/volatility-quality-index/impl.ts
- Package on npm: https://www.npmjs.com/package/fintech-algorithms
- Domain index for agents: https://docs.thefintechbuilder.com/technical-indicators/llms.txt