Options Trading Strategies – Wrong Use of Historical Volatility and Implied Volatility Crossovers
Not all volatilities are constructed equal. It is critical to differentiate between Historical Volatility and Implied Volatility, so retail traders learn how to trade options focused on what is material to theoretically price option spreads forward. Historical Volatility (HV) measures past price movements of the underlying asset recording the asset’s actual or realized volatility. The more commonly known type of HV is Statistical Volatility, which computes the underlying assets return over a finite but adjustable number of days. Let me explain what “finite but adjustable” means. You can vary the number of days to measure the Statistical Volatility: for example,…
Forex Trading Strategies – What Are Your Options?
forex trading revolves around currency trading. The value of the currency can rise and fall as a result of different factors that include economics and geopolitics. The changes in the currency value are what factor in the profits for forex traders and this is the main objective of getting into the trades. The trading strategies are sets of analysis used by the traders to determine whether they should sell or buy currency pairs at a given period of time. These strategies can be technical analysis charting tools based or news based. They are made of a multiple of signals that…