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Strategies & Market Trends : Implied Volatility

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To: John Liu who wrote (4)	7/23/1997 12:26:00 AM
From: Merlo	of 44

Hello, Implied Volatility can change from moment to moment. For example, MSFT during it's run up. Rumors were going around that it would split. Volume picked up and was self feeding from the momentum boys. At the absolute high, volume started to slow & reverse as resistance was encountered. At this point it was a toss up with a bet to the downside. IV on put options should have increased but it may be because of the added risk to the put seller's who now see more downside risk than upside. Now turn this around for the call side. A stock like JBIL drops hits it's low on good volume..volume slows the IV on calls increase, if nothing changed other than some normal profit taking the expectations are now to the upside. This is only a small part of the overall big picture and would include a lot more factors other than whats been mentioned so far. Look at a 30 day chart & trading range to get a better idea of the stocks movement. Thanks, Merlo

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