One of the most important risk factors when trading financial assets and their derivatives is the actual and historical volatility of the underlying asset that impacts the implied volatility used to ...

Historical volatility gauges the risk of securities through price dispersion. Understand its calculation and practical ...

Volatility influences options prices because dramatic price swings amplify gains and losses. While traders can’t look at a crystal ball to see how much volatility the market will endure, implied ...

Implied volatility is the most important concept and tool in options trading. It gives you a simple metric to determine how expensive or how cheap an option is relative to other similar options. To ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Samantha (Sam) Silberstein, CFP®, CSLP®, EA, is ...

One of the most common metrics used when trading options is the Implied Volatility Percentile. IV Percentile is a measure of implied volatility where current implied volatility is compared to the ...

Earnings season is winding down, but we still have a couple of big name companies reporting. This week we have Broadcom (AVGO ...

The volatility risk premium refers to the phenomenon that option-implied volatility tends to exceed realized volatility of the same underlying asset over time. This creating a profit opportunity for ...

As traders, it is easy to develop a strategic blind spot. Equity traders and index traders spend their days glued to the CBOE Volatility Index (VIX), treating it as the definitive metric of market ...