Thursday, August 18, 2011

Options pricing and Volatility

1. Use option calculator to always find the option price.

2. when volatility is high it is time to sell. Use stop loss to sell. what if the market opens rally low or high??

3. That is a good question. The best thing is to buy when there is low volatility or when the stock rallies in the opposite direction of the overall long run 1 year 30 day moving average.

4. Got the idea. Take good profits and get out.

5. Volatility is the most important factor and also the trend of the underlying stock. The option pricing is most dependent on volatility. This is an important point to remember. 

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