SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Covered Calls for Dummies Thread
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: rydad who wrote (3162)12/19/2001 1:58:27 PM
From: Dominick  Read Replies (3) of 5205
 
IV are the initials for Implied Volatility. That's what the market makers think the future volatility would be till expiration. HV stands for Historical Volatility. HV is the actual volatility of stock prices that has occurred in the past.

A quick way to find a 68% chance, (one standard deviation), of a possible range the stock could be within is to multiply the IV times the current price. Add the result to the current price for the high, then subtract the result from the current price to find the low. This would be the possible range a stock could travel till expiration.

F.E. NTAP current price 25 with an IV of 87%. 25 * .87 = 21.75. 21.75 + 25 = 46.75. This is the high of the range. 25 -21.75 = 3.25. This is the low of the range. So, there is a 68% chance of the stock till expiration being within a range of $46.75 to $3.25.

Hope this helps,

dom@luvthisstuff.com
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News