Advantages by Trading Implied Volatility

Trading Implied Volatility is selling the premium of the volatility expectation that is priced into individual options. The implied volatility of an option is actually backed out of the price of the option. All the inputs of an options pricing model are known (time to expiration, strike, price, interest rates) except for the volatility that the option is pricing in. […]

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Implied Volatility Rank

Before we explain Implied Volatility Rank (IVR) we briefly look at Implied Volatility. Implied volatility (IV) is a forward-looking expectation of price fluctuation.  This is derived from an option pricing model and carries great importance in the pricing of options.  However, due to multiple inputs in option pricing models, IV can (and typically does) constantly fluctuate. Beyond the actual reading […]

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Implied Volatility Explanation

  Volatility can be defined by how much the price of an underlying can fluctuate during a certain period of time. The volatility of the underlying instrument plays a big role in the pricing of the options. In the option market, traders care about historical volatility and implied volatility. We focus on Implied Volatility. We sell options with high Implied […]

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Make Better Trading Decisions

Improve your Trading Traders want to be successful and in the business for the long run. You want to have the best information and knowledge to make informed decisions. So that you can trade with confidence and make Smart Trading Decisions. There are few ways to improve you trading skills. You might want to Sell options instead of buying them, […]

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Optimal Strike Selection of Options

In this articles we will discuss how to determine strikes of your option trades. You want to select strikes which gives you the optimal price risk reward.  With the selection of strikes you determine the amount of risk you take. The use of the Probability Model and Standard Deviation is very helpful. Our practice is to sell options order to […]

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Implied volatility as a trading tool

Implied volatility as a trading tool

Implied Volatility is important when you are selling options. It is a great trading tool that shows you how much potential the stock can move according the market’s opinion. It doesn’t give a clue which direction it is going to move though. If implied volatility is high, the market expects that the stock can move largely. When the stock has […]

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