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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe -- Ignore unavailable to you. Want to Upgrade?

To: Louis V. Lambrecht who wrote (751)	2/23/2003 1:33:57 PM
From: Dominick	Respond to of 1064

I think that's the mistake I made. Thinking of the standard use of volatility. He hasn't responded to my just sent message yet but I believe he's referring to Std Dev of MA's movements within BB's only which comprises of 95% of the stocks movements. He may or may not place extra emphasis on over/under price options but the percent of price movements. Come to think of it, why not? I've played BB's often. Interesting, Dominick

To: Louis V. Lambrecht who wrote (751)	2/23/2003 1:37:23 PM
From: tyc:>	Respond to of 1064

>>can we find a common ground for talking about volatility. "volatility" describes how far closing stock prices deviate from the mean. This deviation is measured in "standard deviations". Stock option prices are calculated to cover 2 standard deviations. The point of the discussion is whether the measure of volatility used in the calculation of option prices bears any relationship with the actual volatility shown by recent stock prices. I am neither a statistician nor an options guru. I am seeking corroboration for an interesting idea that seems to work. That's all.