Winter in the Great White North Message Board

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Strategies & Market Trends : Winter in the Great White North

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To: tyc:> who wrote (243)	2/2/2001 12:42:23 PM
From: LeonardSlye	Read Replies (1) of 8273

Thanks for the reply. I’m no expert in options’ pricing but I’m quite sure that they arrive at the term “volatility” differently. I seem to recall that there it is derived by subtracting the 52 week low from the 52 week high, dividing by the 52 week low and expressing it as a percentage. This number seems so rigid that, like you, I’d be looking for another way to calculate the risk on the underlying interest; there Bollinger bands seem like the most logical choice. It seems to work for me...I’d just be a little cautious about making them interchangeable is all. But, for sure, both of them measure risk. They’re both calculated on price alone. This is perhaps the main reason I use them as confirmation of other indicators rather than as a starting point. All, of course, IMHO. As I was saying, this striving for objectivity surely brings out the subjectivity in us. Marcos, I think you’re probably right on the Bollinger bands not working as well on stocks that are spotty. For the standard deviation thing to work I believe you’d really need to have constant periods, sorry ma'am. But then, hey what do I know? I’m just an old Cowboy singer. Happy Trails Lenny

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