Ads
related to: highest volatility options
Search results
Results From The WOW.Com Content Network
On the other hand, when IV is high, options are more expensive, meaning it might be a good time to sell options if you expect the volatility of the underlying stock to decline.
The implied volatility of the option is determined to be 18.0%. A short time later, the option is trading at $2.10 with the underlying at $43.34, yielding an implied volatility of 17.2%. Even though the option's price is higher at the second measurement, it is still considered cheaper based on volatility.
Higher volatility of returns after retirement may result in withdrawals having a larger permanent impact on the portfolio's value; Price volatility presents opportunities to anyone with inside information to buy assets cheaply and sell when overpriced; Volatility affects pricing of options, being a parameter of the Black–Scholes model.
Just as a bond's implied yield to maturity can be computed by equating a bond's market price to its valuation formula, an option-implied volatility of a financial or physical asset can be computed by equating the asset option's market price to its valuation formula. [12] In the case of VIX, the option prices used are the S&P 500 index option ...
The long position of the volatility option, like the vanilla option, has the right but not the obligation to trade the annualized realized volatility interchange with the short position at some agreed price (volatility strike) at some predetermined point in the future (expiry date). The payoff is commonly settled in cash by some notional amount.
For premium support please call: 800-290-4726 more ways to reach us