Monthly Archives: October 2020

What Is Implied Volatility in Options Trading

In this section, we’re going to look at the Black-Scholes model, and the Binomial model. IV doesn’t predict the direction in which the price change will proceed. For example, high volatility means a large price swing, but the price could swing upward (very high), downward (very low), or fluctuate between the two directions. Low volatility […]

Implied Volatility IV: What It Is & How Its Calculated

Options traders may pay close attention to implied volatility since it’s one of the main factors driving options pricing. Considering IV typically reverts to the mean, a spike in IV may be an opportunity to sell options contracts, while a drop in IV could be an opportunity to buy options. Options traders can use metrics […]