Implied and Historical Volatility

One of the most important concepts of options pricing and strike selection is determining the implied volatility of an option and the underlying asset that you are trading. In this video, we explain what volatility is and how to use it to get the edge trading options.

We called our trading platform Implied Volatility because it is the single most important factor that you need to consider when building options strategies to match your trading view. During our travels, we have found, to our great surprise, that even the most sophisticated traders and professionals had no understanding of implied volatility and how to factor it into their trading.

In this video, we explain the gravitas surrounding volatility, the difference between historical and implied volatility and how it forms part of strike selection and getting the edge. Implied Volatility forms the basis of all of the trading systems that we trade day-to-day.

After watching this video, you should be able to understand what volatility means and how to use it in your trading to give you the trading edge over other traders.

Video Contents

• What is historical volatility?
• What is implied volatility?
• What does volatility actually tell us about future prices?
• Implied Volatility over periods shorter than 1 year
• Where to find implied volatility in the trading platform