May 12, 2020

What Is A Confidence Interval?

We talk a lot about price distributions, standard deviations, confidence intervals, etc. in our rooms. What are we talking about? We throw these terms around like it’s “2+2=4” and that is not fair. Here is what we are talking aboutFor example, a 95% confidence interval is a range of values that you can be 95% certain contains the true mean of the population. This is not the same as a range that contains 95% of the values.

The video below will help clarify things.

Follow me on Twitter @MikeShorrCBOT

Disclaimer:  This video does not imply any endorsement of Prosper Academy by Khan Academy and the information contained herein is not intended to be a source of advice and the information and/or documents contained in this website do not constitute investment advice.

about the author:

Mike Shorr

Since 1994, Michael has been an on-the-floor market maker, Vice-President of Interest Rate Derivatives for Knight Financial Products and Director of Education and Options Instructor at Trading Advantage. He makes the oftentimes complex world of options and trading accessible to the novice and advanced trader alike. Michael has a Bachelor of Science degree in Statistics and Finance from the University of Illinois Champaign-Urbana. He presently is Director, Trader Education at ProsperTradingAcademy.

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