Implied Volatility Explained | Options Trading Concept

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Implied volatility is one of the most important concepts to understand as an options trader.

Implied volatility represents the option prices on a particular stock, which is an indication of the future stock price movements that the market is expecting.

Stocks with more expensive option prices have higher implied volatility, indicating larger expected price changes in the future. On the other hand, stocks with cheaper option prices have lower implied volatility, indicating smaller expected price changes in the future.

Additionally, implied volatility can be used to calculate the one standard deviation expected stock price ranges over any time frame.

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Comments

projectoption says:

Get REAL Trades & Learn Systematic Options Trading:
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BuffteethrBlog says:

Best video I have seen on IV. In fact all your videos are very good. You should teach. You have a knack for it.

pawan mahal says:

Great explanation!

ednakazuya12 says:

Awesome video and thanks for the information the only thing that bothers me is that there is only 252 days of trading. Do I still divide 30/365 for the monthly to get the monthly

Green Go says:

Is there any meaning at the time buy or sell option by considering IV value of particular strike price?

Puru Date says:

Hello Presenter and viewers. Let us take an example of Options contract in India. As of today, 26th April expiry has life of 30 days. I would like to refer to commentary from 10:18 to 10:21 which explains calculations of an expected ranges. Should I use 30 instead of 365 in the denominator? Because, option contract with 26 April expiry has life of 30 days

Wedgewood Pinseekerston says:

Brilliant explanation

CHACE says:

Tasty Trade will go off on why they use SD but never explain why. This is one of the only places on the internet that simply explains the relationship between IV and SD.

Saitom Sai says:

GREAT VIDEO THANKS

Ajinkya Deshpande says:

by far, best and clear video on internet

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