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

To: Dominick who wrote (757)	2/23/2003 2:41:31 PM
From: tyc:>	Respond to of 1064

>>Do I have this correct? Possibly you are correct.. The main point is that today's BB values seem to indicate the historic volatility of closing stock prices during the previous 50 days. To calculate that volatility annualised, just divide the upper band value by the 50day MA value, subtract 1, and multiply by 2.245. Leave the lower BB out of it ! To the extent that 50 day BB values are changing every day, 50 day historic volatility is changing every day. I don't see much value in an indicator for it will simply duplicate the message of the BB's. The calculation is valuable only when you want to have a value to compare with the current implied volatilities of related options.