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CBOE Volatility Index (VIX) from December 1985 to May 2012 (daily closings) In finance, volatility (usually denoted by "σ") is the degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns. Historic volatility measures a time series of past market prices.
Options price in a stock’s dividend payments, meaning that call options on dividend stocks are less expensive (and put options more expensive) than on non-dividend-paying stocks, all else equal ...
The resulting VIX index formulation provides a measure of market volatility on which expectations of further stock market volatility in the near future might be based. The current VIX index value quotes the expected annualized change in the S&P 500 index over the following 30 days, as computed from options-based theory and current options ...
Bottom line: The VIX Index is not a useful or reliable indicator of long-term stock market value. From long to short On the other hand, there is quite a bit of evidence to support the validity of ...
An option’s implied volatility (IV) gauges the market’s expectation of the underlying stock’s future price swings, but it doesn’t predict the direction of those movements.
Implied volatility, a forward-looking and subjective measure, differs from historical volatility because the latter is calculated from known past returns of a security. To understand where implied volatility stands in terms of the underlying, implied volatility rank is used to understand its implied volatility from a one-year high and low IV.
Silver urged investors to remember that “a market falls into a correction, ten percent or more, once a year on average,” and that "usually the market reverts to the mean, and the mean is an ...
Volatility risk is the risk of an adverse change of price, due to changes in the volatility of a factor affecting that price. It usually applies to derivative instruments , and their portfolios, where the volatility of the underlying asset is a major influencer of option prices .