In contrast to historical volatility (HV), which looks at actual asset prices in the past, implied volatility (IV) looks ahead. … Implied volatility can be derived from the price of an option. Specifically, implied volatility is the expected future volatility of the stock that is implied by the price of the stock’s options
Click the video below to see how we dive into this important aspect of options trading.
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When traders expect a stock to drop, options give them more than one way to potentially profit from that move. Two of the most common bearish options strategies traders use in these situations are buying puts and selling calls. When presented with both options, some traders might ask: “If they’re both bearish options trades, aren’t […]
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Ever wonder why option premiums rise before binary events in the stock market? It’s not uncommon for option prices to spike ahead of major announcements like: For context, I like to describe option premium as the difference between the contract’s price and intrinsic value. It’s essentially what buyers pay for the “hope” that an option […]
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When the markets move, the Delta Greek can be one of the most valuable metrics to options traders. There’s a particular correlation between the Delta Greek and options premium that can help traders find out how much the price of an option is expected to change. From my personal experience, I believe this pattern can […]
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Most (if not all) traders are very familiar with Alphabet (GOOGL) and Nvidia (NVDA). Both tech names are mega-cap titans that made significant gains since April. Now, here’s the million-dollar question… If you had to own GOOGL or NVDA for the next five years, which one would you choose? Scott Bauer’s son, Jake asked him […]
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Earlier this week, Scott Bauer outlined an example trade for Spotify (SPOT) on the Schwab Network’s Big 3. If you caught the full segment, you probably saw him cover another trade idea for Uber (UBER) — and if you took it, you’d potentially be in a good spot right now. Scott said he would sell […]
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Despite posting decent earnings numbers, Spotify (SPOT) dropped 11% after reporting earnings on April 28. Now the stock appears to be showing signs of stabilization — which caught Scott Bauer’s eye. In an appearance on the Schwab Network, Scott featured Spotify in their Big 3 segment. He discussed how Spotify has moved post-earnings, and how […]
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