Search results “Volatility for options pricing models”

http://optionalpha.com - Option traders often refer to the delta, gamma, vega and theta of their option position as the "Greek" which provide a way to measure the sensitivity of an option's price. However, it's important that you realize that the "Greeks" don't determine pricing, just reflect what could happen in pricing changes for moves in the stock, implied volatility, etc.
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Option Alpha

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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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Option Volatility and Pricing: https://amzn.to/2SU6f8K
How to Price & Trade Options: https://amzn.to/2FqsPmn

Views: 68329
projectoption

[here is my xls https://trtl.bz/2Ri5R7r] Instead of arbitrarily selecting the up (u) and down (d) jumps in the binomial, we can "match them to a volatility input assumption, σ. The correct values are given by u = exp[σ*sqrt(Δt)] and d = 1/u; notice that the exponent is just apply the Square Root Rule (SRR) of scaling the per annum volatility to the correct period volatility; in this example, a 30.0% per annum volatility translated into 30.0% * sqrt(0.25) = 15.0% three-month volatility. When we use these assumptions, we implicitly assume that the geometric (aka, continuous) returns are normally distributed which is tantamount to assuming the prices are lognormally distributed, and this version of the binomial (aka, Cox Ross Rubinstein) converges on the classic Black-Scholes-Merton (BSM) as the number of steps increases. Discuss this video here in our FRM forum: https://trtl.bz/2Vx7uLw.

Views: 630
Bionic Turtle

Implied volatility is driven by option prices, and higher implied volatilty expands the standard deviation of prices. @tastytraderMike walks you through how prices drive IV, and how IV drives standard deviation!
New to options trading? Mike breaks down trading strategies and concepts in a visual way for beginner to intermediate investors.
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tastytrade

Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/black-scholes/v/implied-volatility?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here:
https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/interest-rate-swaps-tut/v/interest-rate-swap-2?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Interest is the basis of modern capital markets. Depending on whether you are lending or borrowing, it can be viewed as a return on an asset (lending) or the cost of capital (borrowing). This tutorial gives an introduction to this fundamental concept, including what it means to compound. It also gives a rule of thumb that might make it easy to do some rough interest calculations in your head.
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
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Views: 429672
Khan Academy

Created by Sal Khan.
Missed the previous lesson? Watch here:
https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/black-scholes/v/introduction-to-the-black-scholes-formula?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Interest is the basis of modern capital markets. Depending on whether you are lending or borrowing, it can be viewed as a return on an asset (lending) or the cost of capital (borrowing). This tutorial gives an introduction to this fundamental concept, including what it means to compound. It also gives a rule of thumb that might make it easy to do some rough interest calculations in your head.
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Views: 170276
Khan Academy

Try a free options trading demo account here: http://bit.ly/Q72dYG
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VIDEO NOTES
Hello and welcome.
In the last video, we took our first look at option pricing. In this video, we will continue with option pricing by taking a closer look at volatility.
Volatility can be broken into 2 parts- Historic Volatility, and Implied Volatility.
Historic Volatility is the volatility of the Periodic Daily Returns. The Periodic Daily Return is the rate that price changes each day using continuous compounding. Each day, the price of a stock is the previous day's price times e raised to some value. The value that e is raised to is the rate of change for that day, in other words, the Periodic Daily Return.
Historic Volatility refers to the Standard Deviation of the Periodic Daily Returns. The standard deviation shows the rate of dispersion, or how spread out the Periodic daily Returns are from the average of all of the Periodic Daily Returns.
In short, Historic Volatility is the Standard Deviation of the Periodic Daily Returns over a 1 year period. For more on this, please what my video on the Period Daily Return, and my 3 video series on the Standard Deviation.
Implied volatility shows the market's opinion of the stock's potential moves,
In other words, Implied Volatility shows what the market "implies" about the stock's volatility in the future.
When Implied Volatility is high, then the market thinks that the stock has potential for large price movements in either direction before the option expires. When Implied Volatility is low, then the market thinks that the price of the stock will move less by option expiration.
Implied Volatility is affected by things like upcoming earnings reports, and upcoming economic announcements. For instance, in the days leading up to an earnings report, Implied Volatility will increase due to the uncertainty of what the results of the report will be, and after the earnings are announced and the results are known, Implied Volatility will decrease.
Volatility is the largest factor in determining option pricing. Let's say that there are two stocks that are both priced $10 per share. One of these stocks goes up and down about 1% or 10 cents each day, and the other stock goes up and down about 3% or 30 cents each day.
Let's say that a trader buys $12 Call Options on both stocks. This locks in a pre-set buy price of $12, so this trader is hoping that both stocks rise above $12 before the options expire. The stock that moves around 3% each day on average has a better chance of rising over $12 than the stock that only moves 1% each day on average. Therefore, the option for the stock that moves 3% a day will be priced much higher than the option for the stock that only moves 1% a day. In other words, the higher the volatility, the more the cost of the option.
Volatility is used to form a range around the expected path for price to create a continuous range of probability for what the actual rate of change in price will be.
By combining some basic assumptions about the markets with some basic laws and theories of statistics, we can develop an expected path for price. In other words, we can determine the path for price that has the greatest odds of occurring. Even though we know price probably will not follow that path, it is the path that has a better chance of occurring that any other path. Therefore, we call it the expected path for price.
We can take that expected path of price along the volatility, and form what is known as a probability distribution of what the future path of price will be. In other words, we take the expected path of price, and the volatility, and form a range around the expected path that tells us the probability or odds of any path occurring.
We can use this to determine the probability of what the future price will be, not only for pricing options, but also for things like Monte Carlo Simulation, which is used to determine possible future outcomes of price, and Value At Risk, which is used to determine things like expected maximum risk of loss.
In the last video, I mentioned that option pricing only has 5 inputs or 6 if the stock pays a dividend. The Strike Price is fixed, but the stock price, the volatility, and the amount of time left until the option expires are constantly changing, and interest rates may change at any time. As these values change, they affect the price of the option. In the next video, we will begin to look at how these changing values affect an option's price by taking our first look at the Greeks. See you then.

Views: 21759
InformedTrades

Speaker: Jason Strimpel (@JasonStrimpel)
Python has become an increasingly important tool in the domain of quantitative and algorithmic trading and research. This extends from senior quantitative analysts pricing complex derivatives using numerical techniques all the way to the retail trader using closed form valuation methods and analysis techniques. This talk will focus on the uses of Python in discovering unobserved features of listed equity options.
The Black-Scholes option pricing formula was first published in 1973 in a paper called "The Pricing of Options and Corporate Liabilities". In that paper Fischer Black and Myron Scholes derived an equation which estimates the price of an option over time. This formula and its associated "greeks" have become ubiquitous in options trading.
In this talk, we'll demonstrate how to gather options data using the Pandas module and apply various transformations to obtain the theoretical value of the option and the associated greeks. We'll then extend the talk to discuss implied volatility and show how to use Numpy methods to compute implied volatility. We'll use the results to visualize the so-called volatility skew and term structure to help inform potential trading decisions.
Event Page: http://www.meetup.com/PyData-SG/events/226837711/
Produced by Engineers.SG
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Views: 3508
Engineers.SG

This video demonstrates my Matlab implementation of Monte-Carlo simulation used to price options on equities while accounting for non-constant volatility, specifically stochastic mean reverting volatility as per the Heston model.
I am happy to connect with other financial professionals and recruiters on LinkedIn. You can find my profile here:
https://www.linkedin.com/in/alex-ockenden-81756aa1

Views: 3014
Alexander Ockenden

MIT 18.S096 Topics in Mathematics with Applications in Finance, Fall 2013
View the complete course: http://ocw.mit.edu/18-S096F13
Instructor: Stephen Blythe
This guest lecture focuses on option price and probability duality.
License: Creative Commons BY-NC-SA
More information at http://ocw.mit.edu/terms
More courses at http://ocw.mit.edu

Views: 43961
MIT OpenCourseWare

Just what is implied volatility? Find out how this important data is derived from the Black-Scholes options pricing model, and how implied volatility can impact the prices of call and put options.

Views: 4686
Zecco

Using the market price for an option on Google's stock, I use Excel's GOAL SEEK function to estimate implied volatility. Implied volatility is a reverse-engineering exercise: we find the volatility that produces a MODEL VALUE = MARKET PRICE. For more financial risk videos, visit our website! http://www.bionicturtle.com

Views: 77707
Bionic Turtle

What is Options, Uderstanding of Options Strategies, Options Pricing Model, Spot Price, Strike Price, Time to Maturity, Annual Volatility, Rate of Interest, Implied Volatility, Bull Call Spread, Bull Put Spread, How to make Options Strategies, In the Money Option, At the Money Option, Out of the money Option, Low Volatility Vs High Volatilty, How to learn Option Strategy, Delta, Gamma, Vega, Theta, Rho
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Finideas Sol

The volatility smile is a real-life pattern that is observed when different strikes of option, with the same underlying and same expiration date are plotted on a graph.
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Volatility smiles are implied volatility patterns that arise in pricing financial options. It corresponds to finding one single parameter (implied volatility) that is needed to be modified for the Black-Scholes formula to fit market prices. In particular for a given expiration, options whose strike price differs substantially from the underlying asset's price command higher prices (and thus implied volatilities) than what is suggested by standard option pricing models. These options are said to be either deep in-the-money or out-of-the-money.
Graphing implied volatilities against strike prices for a given expiry yields a skewed "smile" instead of the expected flat surface. The pattern differs across various markets. Equity options traded in American markets did not show a volatility smile before the Crash of 1987 but began showing one afterwards. It is believed that investor reassessments of the probabilities of fat-tail have led to higher prices for out-of-the-money options. This anomaly implies deficiencies in the standard Black-Scholes option pricing model which assumes constant volatility and log-normal distributions of underlying asset returns. Empirical asset returns distributions, however, tend to exhibit fat-tails (kurtosis) and skew. Modelling the volatility smile is an active area of research in quantitative finance, and better pricing models such as the stochastic volatility model partially address this issue.
A related concept is that of term structure of volatility, which describes how (implied) volatility differs for related options with different maturities. We will be learning about that in tomorrows video. An implied volatility surface is a 3-D plot that plots volatility smile and term structure of volatility in a consolidated three-dimensional surface for all options on a given underlying asset.

Views: 269
Patrick Boyle

This is Black-Scholes for a European-style call option. You can download the XLS @ this forum thread on our website at http://www.bionicturtle.com.

Views: 155012
Bionic Turtle

Lecture 23: Carter introduces the Black-Scholes options pricing formula through conceptual discussion and trading examples. Historical and implied volatility are defined.

Views: 99
UC Davis Academics

How do you find out the implied volatility for your option pricing model? Here's the answer.

Views: 14
X Trading

Tom Sosnoff, Tony Battista, and Jacob Perlman discuss a model that can be used in option pricing formulas to try to account for the volatility skew, which pushes the prices of OTM options higher.
Catch Jacob, our in-studio Math Wizard, every Thursday live at 9am CT: only at https://tastytrade.com/tt/live

Views: 5980
tastytrade

A plot of implied volatility (i.e., the volatility that forces the BSM model option price to equal the observed market price) against strike price. The smile is proof the model is imprecise (incorrect in some assumption); e.g., returns are not lognormally distributed. For more financial risk videos, visit our website! http://www.bionicturtle.com

Views: 41104
Bionic Turtle

This video is a part of our course on Certification in Applied Derivatives (https://finshiksha.com/courses/certification-in-applied-derivatives/), and talks about the Binomial Model of Option Pricing.

Views: 491
FinShiksha

We price an American put option using 3 period binomial tree model. We cover the methdology of working backwards through the tree to price the option in multi-period binomial framework. Empahsis is also placed on early exercise feature of American option and it's significance in pricing. Although not a prerequisite, viewers can look at the tutorial on risk neutral valuation in binomial model for understanding how to calculate risk neutral probability of stock price going up.

Views: 77406
finCampus Lecture Hall

Pricing Options using Black-Scholes Model, part 1 contain calculation on excel using data from NSE and part 2 explains how to use goal seek function to get implied volatility.

Views: 3296
Excelasy by Nitin Surana

Introduces the Black-Scholes Option Pricing Model and walks through an example of using the BS OPM to find the value of a call. Supplemental files (Standard Normal Distribution Table, BS OPM Formulas, and BS OPM Spreadsheet) are provided with links to the files in Google Documents.
tinyurl.com/Bracker-StNormTable
tinyurl.com/Bracker-BSOPM
tinyurl.com/Bracker-BSOPMspread

Views: 243104
Kevin Bracker

Implied volatility formula video you'll learn how option volatility and pricing affects the value of options contracts. 📚 Take our FREE options course here: https://bullishbears.com/options-trading-course/ 🔔 Members - we post our daily trade alert setups here: https://bullishbears.com/trading-alerts/
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Related Searches: Implied volatility calculator, implied volatility example, implied volatility definition, implied volatility options

Views: 4136
Bullish Bears

@ Members :: This Video would let you know about parameters of Black Scholes Options Pricing Model (BSOPM) like Stock Price , Strike Price , Time to Maturity , Volatility ( Implied Volatility ) and Risk Free Interest Rates.
You are most welcome to connect with us at 91-9899242978 (Handheld) , Skype ~Rahul5327 , Twitter @ Rahulmagan8 , [email protected] , [email protected] or visit our website - www.treasuryconsulting.in

Views: 14132
Foreign Exchange Maverick Thinkers

Basics of Options Pricing http://www.financial-spread-betting.com/ PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! Options pricing can be pretty complicated; you have the Black-Scholes formula, you have those big derivative based equations but as traders we just want to break down into the big fundamentals basics so we can the major components that effects the options price we are trading.
We have 2 components to an options price
1) We have the intrinsic value; intrinsic value is the profit that is built into the option already. So for instance if you have bought a $50 put option (bearish view) and the stock is trading at $40, that option already has $10 worth of value. So the instrinsic value of that is $10.
2) We have the extrinsic value. Extrinsic value (also known as time value or premium) is where the intricacies start. The premium consists of the time to expiry and implied volatility. As time increases so does the extrinsic value as the longer the time to expiry the larger the likelihood of bigger moves. Implied volatility is how volatile people perceive the stock price to be in the future.
What are the options for time-value decay, and how can a trader benefit from it?
The price of an option is the intrinsic value plus time value. For example a 95 call with the asset at 100 and a call price of $6.50 - (5.00 intrinsic) = $1.50 time value. On expiration day, with no time left. The time value will be zero.
But the time value will not decay in linear fashion, there is slope. Most often you will find time decay (theta) will increase rapidly after 18–22 days to expiration.
How does volatility work for an option buyer? Volatility (in annualized percentage form) is one of the variables for the black-schole option price ‘model’. It is used to price options to get an estimate of probability of a range of outcomes at expiration. Volatility measure the magnitude of price changes. Without regard for direction.
Once an option trades and is active and price is put into the BSM model and the Implied volatility is calculated. Implied volatility its the markets expectations of the magnitude of price changes in the future.
How is implied volatility different from historical volatility?
Historical volatility is the standard deviation of price returns of the underlying asset (on which the option is based) has traded IN THE PAST. The number is expressed as an annual percentage number.
Historical volatility tells us about the past. it is the annulled standard deviation of stock returns through the last sale or closing price.
Implied volatility is the volatility (same as historical - standard deviation per annum) is the volatility implied by the price of the option. It is the market's expectation of the volatility of the underlying asset from “today” until the expiration date of the option.
So historical tell us about the past, implied tells us about the future.
Complete Options Trading Course
Check the rest of the videos on our Options Trading videos playlist at
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Views: 874
UKspreadbetting

Sheldon Natenberg, legendary author and head educator at Chicago Trading Company, discusses volatility, arbitrage and options trading with Tom Sosnoff and Tony Battista. The guys discuss volatility and its impact on Option Prices.
Watch a REAL Financial Network, live everyday from 7am-3pm CT at https://tastytrade.com/tt/live

Views: 20474
tastytrade

An introduction into option pricing. Understanding how option pricing works and the components that determine an option price. For more information visit www.tradesmartu.com

Views: 23254
TradeSmart University

A walkthrough of the Black Scholes Option Pricing Model on a Spreadsheet. Spreadsheet file is linked and available in Google Docs. Link for video is tinyurl.com/Bracker-BSOPMSpread

Views: 37421
Kevin Bracker

How Volatillity Impacts Options Pricing by The Options Industry Council (OIC)
For The Full Managing Volatillity Series click here https://goo.gl/0D5Bgv
Implied volatility is a key part of every option position, and one that all investors should understand. In this 60 minute webinar, we analyze how implied volatility affects your position when the underlying stock soars, falls or goes sideways – and offer ideas for how you can use it to your advantage in the future.
About the series: Learn how volatillity can impact your options positions

Views: 2524
The Options Industry Council (OIC)

Excel VBA macro/program I wrote to build option strategies using either real time market data or made up scenarios. If you choose to use a certain stock, it will download the historical prices and calculate the volatility of returns for use in Black-Scholes and Cox-Ross-Rubenstein option pricing equations, as well as pull the dividend yields from online. If you choose to make your own hypothetical situation, you have the choice of entering this data from your own data set, or not using any pricing model inputs at all. Not intended for use in real trading, but a piece of software that is extremely useful in learning about options.
Currently, I am working on adding parts to pull the option prices and risk-free rate from online in order to make it the most user-friendly and easy to use as possible. While I want to maximize the capabilities of this program, I do always intend to keep the bare elements of it where originally you simply enter which type of option it is, short or long, the strike price, current spot price, premium, and quantity with no regard for time, interest rates, volatility, or dividend yields. Under this original framework, it was extremely simple (as it still is since you can still get to this simple framework by clicking "Don't include stock data" and "Don't include Greeks") to model option strategies to learn about things like "what does the payoff chart of a straddle look like?"

Views: 5116
Brian Glueck

www.skyviewtrading.com
Options are priced based on three elements of the underlying stock.
1. Time
2. Price
3. Volatility
Watch this video to fully understand each of these three elements that make up option prices.
Adam Thomas
www.skyviewtrading.com
what are options
option pricing
how to trade options
option trading basics
options explanation
stock options

Views: 1368657
Sky View Trading

The binomial solves for the price of an option by creating a riskless portfolio. For more financial risk videos, visit our website! http://www.bionicturtle.com

Views: 150487
Bionic Turtle

What is Options, Uderstanding of Options Strategies, Options Pricing Model, Spot Price, Strike Price, Time to Maturity, Annual Volatility, Rate of Interest, Implied Volatility, Bull Call Spread, Bull Put Spread, How to make Options Strategies, In the Money Option, At the Money Option, Out of the money Option, Low Volatility Vs High Volatilty, How to learn Option Strategy, Delta, Gamma, Vega, Theta, Rho
Hope you will like this.
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FinIdeas on Social Networks :
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Views: 12373
Finideas Sol

ZACH DE GREGORIO, CPA
www.WolvesAndFinance.com
This video discusses the Black-Scholes Option Pricing Model. This math formula was first published in 1973 by Fischer Black and Myron Scholes. They received the Nobel Prize in 1997 for their work. This equation calculates out the value of the right to enter into a transaction. The math is complicated, but the concept is simple. It is based on the idea that the higher the risk, the higher the return. So the value of an option is based on the riskiness of the payout. If a payout is uncertain, you would be willing to pay less money. The way the Black-Scholes equation works is with five main variables: volatility, time, current price, exercise price, and risk free rate. Each variable has some level of risk associated with it which drives the value of the option. By entering in your assumptions, it calculates a value. Calculators are available online for this equation. This video shows an example with actual numbers. You can understand the variable sensitivity by creating a table. You can change the value of the current price while keeping the other variables the same.
Neither Zach De Gregorio or Wolves and Finance Inc. shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.

Views: 2250
WolvesAndFinance

Full workshop available at www.quantshub.com
Presenter: Roger Lord: Head of Quantitative Analytics, Cardano
Within this workshop we will explore two topics that are important to the modern day pricing of derivatives - the Monte Carlo simulation of stochastic volatility models, as well as how to price options by using Fourier inversion techniques.
The first part of the workshop will focus on techniques to efficiently simulate stochastic volatility models such as Heston, Schöbel-Zhu and SABR. Pitfalls of using too simple methods are shown, and lessons are learned from more sophisticated methods that are applicable in a wide variety of stochastic volatility models.
The second part will be focussed on the usage of Fourier inversion techniques to price options. Since the characteristic function of many, typically affine, models can be expressed in closed-form, one can price vanilla options by means of Fourier inversion. We will show how to derive the characteristic function of such models, and focus on how to compute these efficiently by means of choosing an optimal contour, or via control variates.
An overview of stochastic volatility models (e.g. Heston, Schöbel-Zhu, SABR)
Pitfalls using Euler or higher-order schemes
Leaking correlation
Moment-matching schemes
Derivation of characteristic function in affine models
Option pricing using Fourier inversion
Caveats using complex logarithms
Choosing the optimal dampening coefficient
Usage of control variates

Views: 2324
Quants Hub

What is Options, Uderstanding of Options Strategies, Options Pricing Model, Spot Price, Strike Price, Time to Maturity, Annual Volatility, Rate of Interest, Implied Volatility, Bull Call Spread, Bull Put Spread, How to make Options Strategies, In the Money Option, At the Money Option, Out of the money Option, Low Volatility Vs High Volatilty, How to learn Option Strategy, Delta, Gamma, Vega, Theta, Rho
Hope you will like this.
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Views: 12608
Finideas Sol

Get one projectoption course for FREE when you open and fund your first tastyworks brokerage account with more than $2,000: https://www.projectoption.com/free-options-trading-course/
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============
Implied volatility represents the overall option prices on a particular stock. However, each option has its own unique price, and therefore its own implied volatility.
Volatility skew refers to the inequality of out-of-the-money call and out-of-the-money put implied volatilities.
In this video, you'll learn:
1. What implied volatility skew is
2. Which products tend to have upside or downside volatility skew
3. Three helpful pieces of information volatility skew can tell us
You'll also see some examples and visualizations to help you understand implied volatility skew.
==== RESOURCES ====
Trade with tastyworks (& Get a Free Course):
https://www.projectoption.com/tastyworks/
Our Options Trading Courses:
https://www.projectoption.com/options-trading-courses/
==== FAVORITE OPTIONS TRADING BOOKS ====
How to Price & Trade Options: https://amzn.to/2FqsPmn
Option Volatility and Pricing: https://amzn.to/2SU6f8K

Views: 18603
projectoption

Option Chain Analysis - Put Call Ratio, Implied Volatility & Open Interest Analysis - Option Chain, Put Call Ratio & Implied Volatility explained in this Option trading strategies for beginners video.
In this Options trading strategies video, I discuss about Option Chain Analysis where I show how Open Interest Analysis, Put Call Ratio and Implied Volatility come together to form a holistic framework for options trading.
I have begun this video by explaining basics of put call ratio and implied volatility through Option Chain. I have shown how put call ratio links up with open interest and how implied volatility relates with open interest analysis. Put call ratio can be used as confirmation and contrarian indicator and this remains one of the most popular derivative indicator in Options Trading.
I have pointed out free resources to acquire Put Call Ratio data and data on Implied Volatility. Link to the free websites is given in the Options trading video. Put call ratio can be obtained from NSE website whereas data on Implied volatility has to be manually maintained. It is important for you to have data on Put call Ratio, Implied Volatility and Open Interest for thorough Option Chain Analysis.
I have taken up same example as I took in Open Interest analysis video and shown how Put call ratio and Implied Volatility from option chain can help you point out details about Market movement. I have reasoned why it is important to combine Open Interest Analysis, Put Call Ratio and Implied Volatility to analyse entire Option chain better.
Towards the end I have given out 8 rules which link Open Interest Analysis, Implied Volatility, Put Call ratio and Price analysis together to form basics of Options Trading and Option Chain Analysis. Do watch the video on Open Interest Analysis and Option Chain Analysis which was released few days earlier. Concepts discussed here can be applied for Nifty option chain analysis and Bank Nifty Option chain analysis.
Link to Other Trading Options videos is given below. Entire series is structure around how to trade options and it has various options trading strategies for beginners.
***********
🔥 Options Trading Strategies - Option Trading For Beginners
Part 1 - https://www.youtube.com/watch?v=mNHXZlKSUgo
🔥 Options Trading Strategies - Long Call Strategy
Part 2 - https://www.youtube.com/watch?v=WsLLG1h7Aiw
🔥 Options Trading Strategies - Truth About Selling Options
Part 3 - https://www.youtube.com/watch?v=RtnO7rw7wbA
🔥 Options Trading Strategies - Covered Call Writing
Part 4 - https://www.youtube.com/watch?v=N2Krdczwr_I
🔥 Options Trading Strategies - Bank Nifty Covered Call Writing
Part 5 - https://www.youtube.com/watch?v=wgCMUdhh-yM
🔥 Options Trading Strategies - Bull Call Spread
Part 6 - https://www.youtube.com/watch?v=8i4_98yF-s4
🔥 Options Trading Strategies - Call Ratio BackSpread Strategy
Part 7 - https://www.youtube.com/watch?v=uWtKEOLALsg
🔥 Option Trading Strategies - Straddle Option Trading Strategy
Part 8 - https://www.youtube.com/watch?v=g23UKRwm-sM
🔥 Option Trading Strategies - Option Chain Open Interest Analysis
Part 9 - https://www.youtube.com/watch?v=eOBndPzxb2A
***********
Indian Stock Market Analysis Video is released every Friday 7 Pm IST
***********
Thank You for Visiting Trade With Trend Channel
***********

Views: 20376
Trade With Trend

How often do stocks actually fall within expected range?
See more options trading videos: http://ow.ly/MZDKN
Today, Tom Sosnoff and Tony Battista are joined by Mike "Dr. Data" Rechenthin, PhD from the Research Team as he explains how fear in the market often causes options to become overpriced, thus causing the stock's expected move to exaggerate the actual price move. Using the formulas from our last "Skinny on Data Science", Dr. Data creates a large backtest to determine how often stocks actually fall within the expected range. The results confirm our strategy of selling premium and explains why it provides us with an edge.
Math is the most feared four-lettered word around, even to Tom and Tony. Luckily the well dressed Dr. Data is here to show how to tame the beast and even use it to make money. Check out his segments on analysis and data manipulation to understand the reasoning behind our trades.
You can watch a new Skinny on Options Data Science episode live and check out all previous episodes everyday at http://ow.ly/EoyGW!
======== tastytrade.com ========
Finally a financial network for traders, built by traders. Hosted by Tom Sosnoff and Tony Battista, tastytrade is a real financial network with 8 hours of live programming five days a week during market hours. From pop culture to advanced investment strategies, tastytrade has a broad spectrum of content for viewers of all kinds! Tune in and learn how to trade options successfully and make the most of your investments! Plus, access our visual trading platform, dough, to learn the basics of options trading and manage your portfolio! With hours of tutorial videos and unique tools on a simple, easy-to-use trading interface, dough.com is here to make learning how to trade options fun!
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Watch tastytrade LIVE daily Monday-Friday 7am-3:15pmCT: https://goo.gl/OTv3Ez
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Views: 7123
tastytrade

Join us in the discussion on InformedTrades:
http://www.informedtrades.com/1087607-black-scholes-n-d2-explained.html
In this video, I give a general overview of the Black Scholes formula, and then break down N(d2) in detail. I cover most of the entire formula in this video.
My goal is to describe Black Scholes in a simple, easy to understand way that has never been done before. Because this parts of the formula are somewhat complicated, I repeat parts several times during this video.
See our other videos on Black Scholes: http://www.informedtrades.com/tags/black%20scholes/
Practice trading options with a free options trading demo account: http://bit.ly/apextrader

Views: 144523
InformedTrades

**A 1:40 Mike states in an example that "implied volatility would have overstated historical volatility" - he meant to say "implied volatility would have UNDERSTATED historical volatility" in this example**
Implied volatility expresses the perceived risk based on option prices, but is it accurate? Mike walks through the historical comparison of realized volatility vs implied volatility, and why premium sellers are generally paid more than they should be paid based on the statistics.
New to options trading? Mike breaks down trading strategies and concepts in a visual way for beginner to intermediate investors.
Follow:
@tastytradermike
======== tastytrade.com ========
tastytrade is a real financial network, producing 8 hours of live programming every weekday, Monday - Friday. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 50 original segments, and over 20 personalities, we’ll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. http://ow.ly/EbzUU
Subscribe to our YouTube channel: https://www.youtube.com/user/tastytrade1?sub_confirmation=1
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Views: 14467
tastytrade

This video shows how to calculate call and put option prices on excel, based on Black-Scholes Model.

Views: 10574
Mehmet Akgun

A continuation of the Black-Scholes Option Pricing Model with the focus on the put option.
Templates available at:
tinyurl.com/Bracker-StNormTable
tinyurl.com/Bracker-BSOPM
tinyurl.com/Bracker-BSOPMSpread

Views: 33124
Kevin Bracker

[my xls is here https://trtl.bz/2AruFiH] The binomial option pricing model needs: 1. A set of assumptions similar but not identical to those found in Black-Scholes; 2. A framework; i.e., risk-neutral valuation which allows us to infer the probability of an up-jump; 3. An assumption about asset dynamics, in this case that arithmetic returns are normally distributed; and 4. A valuation process which is two steps: FORWARD simulation produces terminal asset prices, then BACKWARD induction which returns the option price based on a series of discounted expected values. Discuss this video here in our FRM forum: https://trtl.bz/30qCfFL.

Views: 1448
Bionic Turtle

Financial Markets (2011) (ECON 252)
After introducing the core terms and main ideas of options in the beginning of the lecture, Professor Shiller emphasizes two purposes of options, a theoretical and a behavioral purpose. Subsequently, he provides a graphical representation for the value of a call and a put option, and, in this context, addresses the put-call parity for European options. Within the framework of the Binomial Asset Pricing model, he derives the value of a call-option from the no-arbitrage-principle, and, as a continuous-time analogue to this formula, he presents the Black-Scholes Option Pricing formula. He contrasts implied volatility, as represented by the VIX index of the Chicago Board Options Exchange, which uses a different formula in the spirit of Black-Scholes, with the actual S&P Composite volatility from 1986 until 2010. Professor Shiller concludes the lecture with some thoughts about options on single-family homes that he launched with his colleagues of the Chicago Mercantile Exchange in 2006.
00:00 - Chapter 1. Examples of Options Markets and Core Terms
07:11 - Chapter 2. Purposes of Option Contracts
17:11 - Chapter 3. Quoted Prices of Options and the Role of Derivatives Markets
24:54 - Chapter 4. Call and Put Options and the Put-Call Parity
34:56 - Chapter 5. Boundaries on the Price of a Call Option
39:07 - Chapter 6. Pricing Options with the Binomial Asset Pricing Model
51:02 - Chapter 7. The Black-Scholes Option Pricing Formula
55:49 - Chapter 8. Implied Volatility - The VIX Index in Comparison to Actual Market Volatility
01:09:33 - Chapter 9. The Potential for Options in the Housing Market
Complete course materials are available at the Yale Online website: online.yale.edu
This course was recorded in Spring 2011.

Views: 123917
YaleCourses

Subscribe to our channel to learn more about options trading strategies: bit.ly/2RmCiSg.
Visit http://www.OptionsEducation.org for more free online courses, podcasts, videos and webinars taught by options experts.
Contact our Investor Services team for help on your options questions and continued education at [email protected] Receive expert insight on your risk mitigation questions.
Do you have a volatility position when you initiate an options trade? The answer is ""Yes"". Learn about what options strategies you may want to consider when volatility is increasing or decreasing. Join the Options Industry Council (OIC) for a discussion which will define the risk profiles of various volatility positions and provide specific examples.
To learn more option trading strategies, register for interactive assignments with MyPath online.
Study at your own pace and based on your own skill level : https://www.optionseducation.org/theoptionseducationprogram/mypath
Options Volatility Video Checkpoints:
(4:24)- Volatility as an option risk, premium review, trends and pricing factors
(7:00)- Historical volatility: higher vs lower values and where to find them
(9:45)- Where to find vega
(12:57)- Historic volatility: effect on prices
(13:38)- Implied volatility: option chains and effects on prices
(20:18)- Volatility vs buyers and sellers
(20:55)- Implied vs historical volatility
(31:57)- Using implied volatility
(37:25)- Implied effects: strategies when up and down
For daily options insight and more great content, follow us on our social media channels:
Twitter: @Options_Edu
LinkedIn: https://www.linkedin.com/showcase/the-options-industry-council-oic-/
Facebook: https://www.facebook.com/OptionsIndustryCouncil "

Views: 157
The Options Industry Council (OIC)

Modelling Stock Price Behaviour
Partial Derivation of the Black-Scholes Differential Equation Calculating Using the B-S Model
American Options and Dividends
Estimating Volatility
Put Option Pricing
The Greeks

Views: 24
Liana Growth Index Fund

© 2019 Make business online successful

This is a point that I want to expand on a little more, specifically in relation to copying other traders. Below is a screenshot of my equity chart over six months. The red line shows the number of people copying me. My equity vs copiers chart. The same holds true for the stock market in general. Long-term growth of UK stock market. Useful resources. How to Start Trading Cryptocurrencies. Cryptocurrency trading can be extremely profitable if you know what you are doing, but it can also lead to disaster. Even though most traders decide to either go with fiat or bitcoin, other cryptocurrencies can represent viable income sources, as long you as you tread carefully and understand what you are doing. This guide is for those who want to start getting involved in cryptocurrency trading. Where to trade.