Implied volatility is a powerful but often misunderstood metric that plays a major role in options trading. Implied volatility doesn’t tell you what’s going to happen to an option’s price, but it ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

The volatility term structure, which plots implied volatility against different expiration dates for options on the same underlying asset, can reveal when potential catalysts are anticipated by ...

Volatility is important for position sizing, determining risk, calculating stops and profit-targets, and rebalancing portfolios. Average true range is a useful measure for position sizing in futures ...

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 ...

There is no single measure of implied volatility for FX markets, unlike those that exist for the S&P500 or for US interest rates. To fill the gap, banks build their own proprietary indices, such as ...