How to forecast implied volatility to trade options?
2007-01-29 12:07:58 · 2 answers · asked by Carlos G 3 in Business & Finance ➔ Investing
Since options are a derivative of an underlying stock, you have to look at historical volatility of the underlying stock and assume that volatility is going to continue
2007-01-30 08:53:57 · answer #1 · answered by Ruben G 2 · 0⤊ 0⤋
You can't, you can only make "informed guesses", which is little more than betting on horse races. That's why there are no people who have made their fortunes trading options, just people who have made fortunes selling the idea of "making a fortune selling options"!
Think about it; How did Warren Buffet make his fortune? (Buy and hold)
How did Trump make his fortune? (Property)
Now name a successful "options" multimillionaire everyone knows.....
We're waiting....
2007-01-29 12:20:39 · answer #2 · answered by Anonymous · 0⤊ 0⤋