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So conservative investors might want to avoid options with very high implied volatility or use it to set stop-loss orders and hedge positions. Bottom line Implied volatility is an essential ...
The Volatility Index futures have become seriously traded in recent days as traders and hedgers alike, use it as a hedge against their positions and there is a record amount of money that has ...
Traditionally, that level of size and stability makes a company an unlikely candidate for options trading, but its trading volume and volatility keep it on this list. 4. Advanced Micro Devices (AMD)
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.
To an option trader engaging in volatility arbitrage, an option contract is a way to speculate in the volatility of the underlying rather than a directional bet on the underlying's price. If a trader buys options as part of a delta-neutral portfolio, he is said to be long volatility. If he sells options, he is said to be short volatility. So ...
If an option is held as part of a delta neutral portfolio (that is, a portfolio that is hedged against small moves in the underlying's price), then the next most important factor in determining the value of the option will be its implied volatility. Implied volatility is so important that options are often quoted in terms of volatility rather ...