Ask The Institute

Your Education Snapshot:


Welcome to your source for answers to questions about option concepts, strategies, and terminology. A new question and answer is published each week. To view the Ask the Institute archives, click the "Ask the Institute Archive" link below.

Submit Question

Please note, questions WILL NOT be personally answered and may not be chosen for publication on the web site.

Ask the Institute Archive

View the archive of all "Ask the Institute" questions.

This week's question:

DATE: May 15, 2015

QUESTION:
How can a trader research Historical and Implied Volatility?

ANSWER:
As stock prices swing about, options traders will look into the future to surmise how volatile the market will be in the future. If the market has been highly volatile for the most recent 30 or 60 days, that does not mean that it will continue to be equally volatile over the next 30 or 60 days.

Researching whether historical or implied volatility is high or low on a stock can be invaluable to a trader. Fortunately, CBOE offers the Volatility Optimizer, a free investment trading tool under the "Tools & Resources" tab at CBOE.com which provides traders this information in a graph format. To learn more about researching Historical and implied Volatility using the Volatility Optimizer tool, view this segment of "Ask the Institute."

  VIX Snapshot

*Third Party Advertisement