Implied Volatility (IV) Is a measure of how much people think the price of a stock or option might change in the future. What is Implied volatility Implied Volatility (IV) Is a measure of how much people think the price of a stock or option might change in the future. It’s like trying to predict…
An option is like a bet that you make with someone else about what you think will happen to a particular stock in the future. Trading in Shares When we talk about the stock market, we are talking about companies that sell small pieces of themselves called “shares.” When you buy a share, you own…
In this article, 7 notable differences between European options and American options, are listed and see how Indian market adopted these option types. Exercise Date European options (EO) can only be exercised on their expiration date (option buyer will have to wait until the expiry date for exercising his right), while American options (AO) can…
An option chain is a tool that provides a list of all available options contracts for a specific underlying asset. It displays the current market prices and other important information about each option, including the strike price, expiration date, bid-ask spread, and implied volatility. What is Option chain The option chain is typically organized in…
Option Greeks are parameters used to measure the sensitivity of an option’s price to changes in various underlying factors, such as the price of the underlying asset, the passage of time, implied volatility, and interest rates. Here are the details of the most commonly used option Greeks: Delta: Delta measures the sensitivity of an option’s…
Here are the 4 advantages of option selling over option buying: Higher Probability of Success: When selling options, traders can benefit from the time decay of options premiums, as options lose value as they approach expiration. This means that, all other things being equal, option sellers have a higher probability of success than option buyers….