Options Bootcamp 32: Volatility and Skew

Published on: Oct 25 2013 by John Critchley

 

 


Options Bootcamp 32: Volatility and Skew

 

  • What is Implied Volatility and how it is derived? Why is understanding  implied volatility is so important?
  • Historical volatility versus implied volatility.
  • What is skew? Why does skew exist?
  • What is the put wing? What is the call wing?
  • What is investment skew? What are other types of skew?
  • #1 Options question from newcomers – I bought a call option then the stock  rallied and my call lost value. Why?
  • How do you evaluate skew? How is skew measured?
  • What is reverse skew? What does reverse skew sometimes indicate?
  • What is term structure?

 Mail Call: You have questions.  We have  answers.

  • Question from Nick D. – I am a covered call seller. I have some people  recommend that I should sell in-the-money covered calls instead of my usual  5%-10% out-of-the-money calls because of volatility. But why would I want to  sell a call that is going to inevitably be called away? What is your thought on  this strategy?
  • Question from Charles Midler, Santa Fe, NM – I am thinking about hedging my  short stock positions with short put positions. How do the drill instructors  view this strategy? Am I on the right track? Can John discuss the margin  requirements of such a strategy?
  • Question from Nomad 6 – What are flex options

 

You also can download the podcast via:

Itunes http://itunes.apple.com/us/podcast/options-boot-camp/id514144367

Stitcher: http://stitcher.com/listen.php?sid=971812

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