Discover and read the best of Twitter Threads about #impliedvolatility
Most recents (3)
1/ One of the essential factors I was interested to learn how to trade in options was implied volatility.
So in this thread, I went through important points that I found + how IV is being implemented in #Defi 🕳️ :
So in this thread, I went through important points that I found + how IV is being implemented in #Defi 🕳️ :
2/ #Impliedvolatility is a probabilistic calculation for how much the market is expecting a certain asset to vary in price, e.g supply/demand factor :
- IV high > options Demand high > expecting volatility
- IV low > options supply high > expecting neutral / slow deviations
- IV high > options Demand high > expecting volatility
- IV low > options supply high > expecting neutral / slow deviations
3/ #Vega is the first derivative of the option value with respect to the volatility.
And it is a great indicator that helps us understand IV effects over options prices by measuring how the price variates if the implied volatility changed by 1%. = S.sqr(t).N’(d1)
And it is a great indicator that helps us understand IV effects over options prices by measuring how the price variates if the implied volatility changed by 1%. = S.sqr(t).N’(d1)
#OptionsTrading thread!
1/ Options trading is a financial instrument that allows investors to buy or sell the right to buy or sell an underlying #asset at a predetermined price at a specific time in the future.
1/ Options trading is a financial instrument that allows investors to buy or sell the right to buy or sell an underlying #asset at a predetermined price at a specific time in the future.
2/ There are two types of options: call options and put options. Call options give the holder the right to buy the underlying asset, while put options give the holder the right to sell the underlying asset. #calloptipns #putoptions
3/ The price of an option is determined by several factors, including the underlying asset's price, time until the option expires, and the option's strike price (the predetermined price at which the underlying asset can be bought or sold).
#Option #Greeks Simplified
#Options are definitely more complicated than equity or futures.
Their prices don’t just go up and down.
They also fluctuate based on things like #time, #implied #volatility and #underlying stock movements.
#Options are definitely more complicated than equity or futures.
Their prices don’t just go up and down.
They also fluctuate based on things like #time, #implied #volatility and #underlying stock movements.
#Options #Greeks Are Simply Mathematical Shortforms
Most of you would remember from school that mathematical formulas sometimes were #Greek letters like Pi and #Delta. The same is true for options.
Don’t let them overwhelm you or scare you.
Most of you would remember from school that mathematical formulas sometimes were #Greek letters like Pi and #Delta. The same is true for options.
Don’t let them overwhelm you or scare you.
They’re simply #mathematical words to explain some very basic principles.
#Greeks Describe the Behavior of #Individual #Options
Each #greek can help predict how it will behave under different circumstances and how options prices would change.
#Greeks Describe the Behavior of #Individual #Options
Each #greek can help predict how it will behave under different circumstances and how options prices would change.
