Sentences with phrase «if implied volatility»

If implied volatility is higher, callable security prices will be depressed.

By selling a bull put credit spread in these circumstances, a trader is able to maximize his / her potential profitability by taking in more premiums than if implied volatility was lower.

If the implied volatility is much higher than what is forecast, they simply do the reverse.

They then buy the option if the implied volatility is lower than the forecast volatilities and then delta hedge the option with the underlying until it expires.

The FB straddle would have a profit of $ 2,000 if the implied volatility rose two points and a $ 2,000 loss if the implied volatility dropped two points.

If implied volatility increases, the option's premium increases.

* Finally, if implied volatility perks up from its current slumber and spikes to higher levels, that can inflate the profit potential (at least prior to expiration) of this trade.

Not exact matches

This scenario is also scarier if realized volatility can stay near implied (if it doesn't, implied volatility can fall, reversing the cycle).

Since the implied volatility is relatively low at 38 %, this trade has a maximum profit of only 3.3 % if the puts expire worthless, and it only provides a downside hedge of 3.4 % if the puts are assigned.

Since the implied volatility is relatively high at 50 %, this trade has a maximum profit of only 0.9 % if the puts expire worthless, but it provides a downside hedge of 10.1 % if the puts are assigned.

If gold prices rocket upwards faster than we anticipate then this trade should still be profitable since it benefits from an increase in implied volatility as well as an increase in gold prices...»

If options writers were underpricing options in order to try to expand their activities, then implied volatility would be persistently below the subsequently realised volatility of the underlying assets over the life of the options.

3) Can accumulate even more value if and when implied volatility ever perks up again (the more the better)

If the insurance company can handle the lack of incremental income, investing in higher credit quality instruments in tight spread low implied volatility environments can mitigate the risks.

Implied Volatility: If the market becomes volatile, or if volatility is expected, implied volatility will rise, thereby increasing options Implied Volatility: If the market becomes volatile, or if volatility is expected, implied volatility will rise, thereby increasing optioVolatility: If the market becomes volatile, or if volatility is expected, implied volatility will rise, thereby increasing options priceIf the market becomes volatile, or if volatility is expected, implied volatility will rise, thereby increasing options priceif volatility is expected, implied volatility will rise, thereby increasing optiovolatility is expected, implied volatility will rise, thereby increasing options implied volatility will rise, thereby increasing optiovolatility will rise, thereby increasing options prices.

What if» scenarios - Change implied volatility, days to expiry or the underlying asset price of an option to model it in thousands of potential scenarios.

Only time will tell, but if realized volatility moves higher, expect an increase in implied volatility which can directly lead to trading opportunities.

If you sell when implied volatility is high, you increase the premiums you make on the option.

If, for example, the company plans to announce earnings or expects a major court ruling, these events will affect the implied volatility of options that expire that same month.

Correct me if I'm wrong, but Implied Volatility is for a specific option contract (a specific strike, a direction, and an expiration).

When all but one variable is known or assumed, the last variable can be calculated, so if one has the price of the underlying and all else except the volatility, the volatility can be calculated thus implied.

If one selects an implied volatility, and all variables except the underlying price is known, the underlying price can be calculated.

If both LETF and ILETF have the same leverage factor in absolute value and the same dividend yield qℓ, we should observe the same implied volatility and same option price under the Black - Scholes model.

If I wanted implied volatility to be higher, could...