How Volatility Can Define Your Next Trade
How Volatility Can Define Your Next Trade How Volatility Can Define Your Next Trade For an options trader, price alone is only half the story. You may correctly predict that the index will move higher, yet still lose money buying a call. Why? Because options are not just a directional instrument. Volatility , time decay and the premium paid can decide whether your trade actually works. Source: Opstra To get the IV chart, Log in to Opstra > Options > IV Charts > Select Scrip The Nifty IV chart above brings these variables together. It combines price, historical volatility, implied volatility, IV Percentile and the IV-RV spread, giving an options trader a framework to answer, "Should I buy volatility, sell volatility, or simply wait?" Let us decode the chart. 1. Price – The Directional Anchor The top panel shows price movement, broadly oscillating between the 23,200–24,700 zone during the period...