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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