Not all options on the same stock are priced equally. #algorithmictrading #stockmarket

QuantInsti Quantitative Learning · Intermediate ·⚡ Algorithms & Data Structures ·1mo ago

About this lesson

In the Money options carry higher Implied Volatility. At the Money options carry lower Implied Volatility. Plot that relationship and you get the IV Smile. It is not just a pretty curve. It is the market expressing how it prices risk at every single strike. When the underlying drops, put IV spikes. When the underlying rises, put IV compresses. Understanding this relationship is the difference between trading options and actually understanding options. Watch the full video here: https://youtu.be/ISVFhvECvzc Want to go deeper into professional options trading? Explore EPAT: https://www.quantinsti.com/epat implied volatility smile, IV smile options, options strike pricing, ITM ATM options volatility, put call implied volatility, options risk pricing, volatility smile trading, options Greeks, algorithmic trading, quant trading, QuantInsti, EPAT #ImpliedVolatility #IVSmile #OptionsTrading #OptionsGreeks #PythonTrading #QuantTrading #AlgorithmicTrading #VolatilitySmile #OptionsStrike #TradingShorts #QuantInsti

Original Description

In the Money options carry higher Implied Volatility. At the Money options carry lower Implied Volatility. Plot that relationship and you get the IV Smile. It is not just a pretty curve. It is the market expressing how it prices risk at every single strike. When the underlying drops, put IV spikes. When the underlying rises, put IV compresses. Understanding this relationship is the difference between trading options and actually understanding options. Watch the full video here: https://youtu.be/ISVFhvECvzc Want to go deeper into professional options trading? Explore EPAT: https://www.quantinsti.com/epat implied volatility smile, IV smile options, options strike pricing, ITM ATM options volatility, put call implied volatility, options risk pricing, volatility smile trading, options Greeks, algorithmic trading, quant trading, QuantInsti, EPAT #ImpliedVolatility #IVSmile #OptionsTrading #OptionsGreeks #PythonTrading #QuantTrading #AlgorithmicTrading #VolatilitySmile #OptionsStrike #TradingShorts #QuantInsti

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