How to Trade Volatility effectively

For traders¬†it is important to know how to trade Volatility. What is it and how can you use it? When the stock moves up and down Volatility increases. While uncertainty increases the option premium increases. This change of the stock option premium always is exaggerated. And the experienced trader knows that the the price will have a mean reversion. Why […]

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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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How will Standard Deviation help in trading

Option Premium sellers often sell options one Standard Deviation away from the market price. In this way there is a high probability of profit. The Options sold may expire worthless or you take profits now buy buying them back. Standard Deviation is a statistical term that measures the amount of variability or dispersion around an average. It is a number […]

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