Run Time: 90 minutes. When are option prices cheap? When are they expensive? What causes prices to change? The answer to each question is the same: Volatility. Understand how volatility affects the market and securities underlying specific options - and you can significantly improve your trading results. Now, Profit with Options author Larry McMillan gives you a crash course in analyzing and understanding volatility, and the critical role it plays in your overall trading success.
McMillan explains everything about volatility — from basic types to the best strategies for profiting from extreme levels of volatility. He begins by addressing “Volatility as a Predictor”, $VIX and other basic volatility measures. He then examines their use as contrary indicators before moving on to powerful techniques for trading volatility.
You’ll discover how to:
- Distinguish between the 2 types of volatility
- Use the “net” to analyze volatility figures
- Compare options to determine the composite volatility for an underlying asset
- Increase profits by using “trailing stops” on your option trades
- Adjust option strategies in response to rapid changes in volatility
- And recognize when volatility signals time to sell out-of-the-money options, use trading straddles, or reflects routine seasonal factors.
It’s an insider’s guide to the intricacies of options pricing, with important strategic insights that will benefit novice and experienced traders alike. See why traders are raving, “an essential addition to the reference library of every options investor!”