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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe
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To: Dominick who wrote (737)2/22/2003 10:50:14 PM
From: tyc:>  Read Replies (3) of 1064
 
stockcharts.com

I always use 50 day bollinger bands. On this chart, the upper Bollinger band is 10% higher than the 50 day MA (24.06/21.87). To annualise it I multiply this figure by the square root of time expressed as a fraction of the year. There are 225 trading days in the year, so the square root of (50/225) = 2.245. And 2.245 times 10% equals approx 22%.

Where did you get your figures from, Dominick ? Could it be they are the implied volatility of options ? Or is my method simply all wrong ? Granted it is based on the volatility only of the past 50 days, and the chart clearly shows the bollinger bands pinching indicating reduced volatility.
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