0
Volatility in the stock markets usually implies that the market is about to swing either upward or downward. Where there is a strong stock sell off it can indicate that the market is about to take a downward swing.
Wiki User
∙ 10y ago
Add your answer:
Earn +20 pts
What is imp vol in option trading?
Implied volatility is the expected volatility of the underlying stock. The higher the implied volatility, the more the underlying stock is expected to move and thus the more expensive an option becomes due to increased extrinsic value.
Why are markets important?
Stock markets are trading places. A place to buy and sell commodities.
What does the stock markets depend on?
Greed and fear
What are some examples of free markets?
A local farmers' market, a flea market, stock markets
Why is the stock market important to capitalism?
Desire of wealth is spirit of capitalism which is a driving force behind stock market volatility and economic growth. Investors for want of wealth and status trade heavily in stock market.
What has the author Riad Dahel written?
Riad Dahel has written: 'Volatility in Arab stock markets' 'The behavior of stock prices in the GCC markets'
What is stock option volatility?
Stock option volatility is the amount of movement a stock is anticipated to make in a specific time frame. This information is important to investors to enable them to predict if they will make money or not.
Is volatility a word?
Yes, volatility is a word and it means unstable or easily susceptible to external influences.For example, the volatility of the Stock Marketincreases as the economy weakens.
How an option holder gains from the volatility of the underlying stock price?
A component of the option price is the implied volatility of the stock. When the implied volatility rises the price of the option rises slightly. Read more about VEGA & DELTA of an option.
What is imp vol in option trading?
Implied volatility is the expected volatility of the underlying stock. The higher the implied volatility, the more the underlying stock is expected to move and thus the more expensive an option becomes due to increased extrinsic value.
Why does trading stock create volatility?
Simple answer is that volatility is simply price change. Price changes due to supply and demand so when people trade a stock it affects supply and demand.
What would make a firm's beta increase?
The beta of a firm's stock is dependent on the volatility of the stock relative to the overall market. So if the stock's volatility increased relative to the overall market, it's beta would increase as well.
Where can I find information on stock option volatility?
There are quite a few web sites that list stock volatility including Bloomberg. They not only display information about each company, but a long history of their stock prices so you can see the long-term viability of a stock and its options.
What is the historical volatility of a stock?
The historical volatility of a stock is the variation of the returns over a period of time (say, over the last twelve months). The variation of the returns is usually taken as the standard deviation of the returns. You need a spreadsheet to calculate historical volatility (see the related link for an example)
What does it mean when premiums are increasing in call options?
two possible reasons: 1. the underlying stock of the option is increasing in price value. 2. the volatility of the broad markets may be increasing. in this case, the stock may not even rise in price value but its call premiums would increase.
What is the VIX index?
VIX is not about volatility. The word "volatility" is used erroneously. Volatility would imply rapidly changing in EITHER direction. People have lost lots of money on account of the improper use of the word. I contacted the CBOE and they even admit the word is used incorrectly. They attribute it to a person 30 years ago who used the word improperly. It is a unidirectional measure of the ratio of S&P500 puts and calls, which is NOT volatility. The VXX is a product of Barclay's Bank and also uses the word "volatility" even though it does not track volatility, thus their product is misleading.Read more: http://www.answers.com/search?q=VIX+is+not+about+volatility.+The+word+"volatility"+is+used+erroneously.+Volatility+would+imply+raplidly+changing+in+EITHER+direction.+People+have+lost+lots+of+money+on+account+of+the+improper+use+of+t#ixzz1naTzgrKq
Why is global trade necessary?
Concerns about trade have added to the volatility in the stock market.
