Options trading statistics. How You Could Get Smoked By Blindly Shorting Options
Looking for a Potential Edge? Options Stats, Pre-Sliced and Diced on thinkorswim
Learn how comparing historical and implied volatility can help you choose an options options trading statistics Check the Sizzle Index to see any unusual options activity Use options stats with other indicators to make more informed trading decisions Are you an aspiring option trader? Or are you a stock trader looking for some extra info about the stocks you trade? Put and call options are used by professional traders and institutional investors to help manage options trading statistics, potentially enhance returns, and speculate.
Following their trading activity—active strike prices, delivery months, trading volume, and so forth—might give you an idea of how these pros view the market direction and possible pressure points. Are they, for example, eyeing the upside or downside?
How much expected volatility is priced into the market, and how does that compare to actual, realized volatility? And what about options volume—has it been heating up? Read on for a rundown of the main features, and discover how traders and investors might use all this sliced-and-diced options info. For illustrative purposes only.
Past performance does not guarantee future results. Keep Your Eye on the Vol The left column of the options statistics page is devoted to measures of volatility vol —both historical volatility and implied volatility—and how current readings stack up against measures seen over the past year. For example, the stock in figure 1 shows a current IV reading of Other data on the page can help put it in perspective. Current IV Percentile.
OPTIONS MARKET STATISTICS
So implied vol is relatively low in this stock right now. Is it warranted?
One way to help you decide is by comparing the IV data to the historical volatility HV data. IV is a forward-looking measure implied by the options market. HV, in contrast, is backward-looking. Current HV Percentile.
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How might a trader assess these readings? In other words, comparing the two can be a useful way to understand how much expected volatility is being priced into options versus how much it actually tends to materialize.
All else equal, higher IV relative to HV suggests options are expensive, while lower IV suggests options are inexpensive. Keep in mind, however, that past performance does not guarantee future results.
For the option trader, these can be important considerations when choosing a trading strategy. Some strategies, such as buying single-leg options and vertical spreads or buying a calendar spread, can be more attractive in a low-vol environment.
Other strategies, such as covered calls, selling cash-secured puts, and short vertical spreads, can favor a high-vol environment.
Simply go to the Trade tab, type in the symbol, and check the readings. One way to measure the heat is to check the sizzle.
- To view the data, click on the V-shaped icon before the section title.
- It blows out accounts.
- Equity Derivatives Statistics
A Sizzle Index reading greater than 1. A reading below 1. The further the measure is from 1.
The Second Worst Statistic In Options Trading
A sizzle of 4. For the stock trader, tracking unusual options volume can offer hints as to the strength of a directional move. For example, a spike in the Sizzle Index during a big up or down move in the stock could indicate strength in the direction. Conversely, a big move on thin volume might suggest a lack of conviction in the stock move and might even signal a reversal of the prevailing trend.
A look at where the unusual options activity is occurring might hint where the stock could go—or where the key price levels might be, according to the big option players generating all this volume. Looking for stocks with sizzling options volume?
Today's Option Statistics
The thinkorswim platform can do the heavy lifting for you. Set your sizzle criteria and run the scan.
So if the volume of calls and puts is the same, the ratio would be 1. If twice as many calls traded as puts, it would be 0.
Using the key statistics for options research
The assumption is that the ratio implies options trading statistics directional bias—higher put volume i. If you follow technical analysis, for example, you might use options stats along with moving averages, breakouts, or other chart tools see figure 2. Options stats may be most effective when used with other indicators. No matter which products you trade or how often you trade them, options stats can help you make more informed trading decisions.