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Implied volatility is a powerful but often misunderstood metric that plays a major role in options trading. Implied volatility doesn’t tell you what’s going to happen to an option’s price ...
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 ...
The Onion Futures Act is a United States law banning the trading of futures contracts on onions as well as "motion picture box office receipts". [1] In 1955, two onion traders, Sam Siegel and Vincent Kosuga, cornered the onion futures market on the Chicago Mercantile Exchange. The resulting regulatory actions led to the passing of the act on ...
Futures have similarities with options, though both have important differences to be aware of. 4 strategies for trading futures The following are core approaches to how you can trade futures.
The main risk when investing in stocks is volatility. Stock markets can rise or fall at any time, which means you can lose money if the share price of the stock you hold drops in value ...