Graduate 300 Level
7.0- Chapter 7: Introduction to Volatility
The Black-Scholes option pricing model, which was discussed in Chapter 4,possesses six input factors...
 
7.1- Historical Volatility
Historical volatility (HV), sometimes referred to as realized volatility, can be defined as the past price...
 
7.2- Implied Volatility
The last lesson introduced historical volatility, which allowsinvestors to analyze the fluctuations of a...
 
7.3- Normal Distributions
The previous lessons have introduced the basics of historical and implied volatility. We will now build...
 
7.4- Volatility Skews
The last lesson on normal distribution helped quantify volatility and give investors a platform with which...
 
7.5- CBOE Volatility Index
The CBOE Volatility Index ($VIX) has become a popular subject in the media the last few years. The index is...
 
7.6- Hedging Techniques
 As noted in the last lesson, the $VIX is not a proper hedge for portfolios over the long-term. Using...
 
7.7- Put/Call Ratio
 The Put/Call Ratio gives valuable insight into investor sentiment on an underlying stock. In most...
 
7.8- Put/Call Parity
The put/call parity is the mathematical relationship between call and put options that share the same...
 
8.0- Chapter 8: Time Spreads
The strategies that have been discussed so far have signified either a bullish or bearish bias on the...
 
8.1- Iron Condor (Credit Spread)
Investors use Iron Condors when they are neutral an underlyingstock and expect range bound trading between...
 
8.2- Butterfly (Debit Spread)
 The Butterfly position is used when investors are targeting a certain price at expiration. Whereas an...
 
8.3- Calendar Spread (Debit Spread)
There are many different forms of calendar spreads. This lesson will focus on the most common, which is the...
 
9.0- Chapter 9: Delta Neutral Trading
The strategies that have been discussed so far have signified eithera bullish or bearish bias on the...
 
9.1- Straddle (Debit Spread)
The straddle position is expensive to initiate but will profit from a large move either way in the...
 
9.2- Strangle (Debit Spread)
The strangle is much like a straddle position, however it requires less capital to initiate the trade. The...
 

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