Options 201: Beyond Obi-Wan-Kenobe Message Board

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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe

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To: OX who wrote (765)	2/23/2003 7:39:34 PM
From: Dominick	of 1064

That was my thought. Using standard HV or IV method it was 60% or more. But using BB indicators on a chart, the upper band was around 10% higher than the 50 day mean using 2 SD. Multiplying by 2.245 gave him 22%. I'm using symbol AEM not AEG.TO, so my prices are in the teens. But looking at long term chart with BBs 95% of time the prices stay with in the bands. So why couldn't one use those measurements for volatility instead of the standard method? After the BBs narrow, they go wide, and after they go wide, they go narrow. Kind of simple when you think about it. Since he's not sure of the direction, he sells a straddle for a credit that has break-evens at the outer bands. Like he says, "it works". Can't argue with that! Dominick

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