I am confused about Options IV. I would really appreciate if you guys help me to clear the confusion.
What I read is,
IV is a variable in option pricing formulas that shows how much an underlying asset can fluctuate between now and the option's expiration.
Also, other definition...
But any specific reason that IV (ATM) for PNB is always more than 50? Why it is so high even there is not much price volatility?
Also, what should be the approach when price is high and IV is also high and price is low and IV is also low?
I am studying Price and IV relationship. I am studying PNB and trying to compare price with its IV. I read that, whenever price is high, IV will be low and vice versa.
General Trading setup:
If Price is high and IV is low then CE and PE will be cheap. In such scenario buy PUT.
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Ok, After searching whole day and reading different articles, I understood below. Hope it will help to newbie in options like me and expert can correct me if anything is wrong,
Below description is for CALLs, for PUT consider vice versa true.
Delta - It is important factor to decide/increase...
Thanks a lot sir. I was going through this forum and also searched on google about greek and time decay. I got few links where they were talking about Delta, Theta..... But I am not getting clear article that mentions what is the perfect time to buy options at particular premium. And also, due...