Volatility
The fluctuations in the market, or as its colloquially called volatility, is a thing to live with. As uncertainty and how to tide over it is the game for option traders. In this module, realise what different metrics of volatility are and how they bind together and more importantly, how to build biases on the metric to enable traders in effective trade decisions.
- 01Price action in marketsStock prices don't move in a preconceived path . Of course, financial analysts put forth forecasts about a particular sector or asset to reach…4 min · video
- 02What is Implied Volatility?Implied volatility is an attribute that is given to any unexplained price change of option premium after passage of stipulated time and stipulated…4 min · video
- 03Volatility SkewOption traders don’t observe the same implied volatility across different strikes and different option types (call/put) on the same underlying…5 min · video
- 04Volatility and Mean ReversionMean reversion is a phenomenon where, if a data point is far from the historical average values, then the tendency of the next data point is, to be…4 min · video
- 05Relative Positioning of Implied Volatility - (IVR) & (IVP)Implied volatility, as discussed in the previous chapter is mean reverting . The observation is also, visible from the below chart.4 min · video
- 06Future realized volatility + Volatility tradingWe have studied historical volatility and implied volatility in past chapters, with the latter finding applications in options trading ; as IV is…2 min · video