- Wealth PMS (50L+)
Recently we’ve had some solid path breaking arguments on options and volatility and how, even in times of great volatility, you get different ways to participate using options that might actually help control or take advantage of the greed/fear.
We had an impromptu Google Hangout with Vashistha Iyer (@vy3r on slack). Here is the complete video.
What we spoke of:
1. How high IVs – of 30+ in the Nifty actually provided for large moves – some so large that they overstated the move in the Nifty most times.
2. The big outlier was the 2009 move- where there was a 2SD move in the Nifty. But short of that, most large moves seem to have been “caught” by options.
3. We used Snap to overlay charts and calculators to work through SD ranges. The current IV is so low it makes little sense to WRITE options, but you can see how IV ranges move over a longer term and how the current IV isn’t exactly normal.
And much more in the Video! Thanks to Vashistha for the inputs (and the Ukulele lead-in too!).
Click on the image to watch the tutorial in Capital Mind’s Private Video Channel.
Or You can just click this link: Trading Volatility with Options: Vashistha Iyer and Deepak Shenoy
You can directly ask in the comments section below the video or just send us a mail to firstname.lastname@example.org.
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Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion.
Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.