How to calculate the implied voliatality of options?

Answer 1

GO TO SITES LIKE ICICIDIRECT.COM AND MONEYCONTROL.COM

Answer 2

Hello,

If you do not know the options pricing mechanism look up
http://en.wikipedia.org/wiki/Black-Scholes
In this formula the volatility is an input from the user.
If the options price is known you can reverse this formula and calculate the volatility. This is implied volatility. But it is not possible to reverse the formula. So what you need to do is start with an assumption that volatility is say 50 calculate the option price using this volatility. Check how far it is from the actual options price. Now use another say 25 and see how close it is to the options price and then depending on how option price matched decide to increase or decrease the volatility further. Keep iterating till you get as close to the option price as possible.
E.g. say the actual options price is 10 Rs.
With 50% volatility you ended up with say 25 Rs as options price
With 25% volatility you ended up with say 8 Rs volatility then you can conclude that the final volatility is between 25 and 50. Now try say 37.5 and so on.
Instead if with 25% volatility the price was 16 Rs then you can conclude that the volatility is below 25% and you can try with probably 12.5 and so on.

Answer 3

The implied volatility can be calculated using the formula High - Low/(high + low)/2 which is called the stock del for a particular stock which has options.

Answer 4

Download the Black-Schoels model on your system and you will be do it yourself, automagically.

There are many web sites that offer it too (for free), but the data is delayed.

Good luck.

KKP_Inv

Answer 5

For all the calculations pertaining to options and the black-scholes model, please refer to my free information site at http://www.optiontradingpedia.com/

Hope this helps.