What is implied volatility in options & how does it affect options

Podcast Duration: 06:19
Namaskar doston. Angel One ke is podcast me aapka swagat hai.

Doston aaj hum options ki ke baare me baat karne jaa rahe hain. To be more specific, hum aaj ye jaanenge ki implied volatility ka kya matlab hota hai aur iska options ki pricing par kya effect hota hai. Uske baad, we will discuss a few points to consider when forecasting implied volatility.

Doston options ke concept ko ek baar revisit kar lete hain. Options are basically contracts - in contracts ke through hum kisi stock ko ek set price par buy ya sell kar sakte hain, depending on the type of options.

Toh doston, call options allow you to buy the underlying stocks at a fixed price aur put options ke through aap underlying stocks ko ek fixed price par sell kar sakte ho - yaad rahe, options are valid only for a specific time frame.

Doston options ki jo price equation hoti hai, yani ki, the equation which is used to determine the price of an option, usme implied volatility is a crucial component, jisse options ki price determine hoti hai.

Toh kya hoti hai implied volatility?

Doston volatility ka matlab toh aap jaante hi ho. Agar nahi, toh here it is: Volatility kisi bhi stocks par milne waale returns kitne dispersed hain, uska ek statistical measure hota hai. Isliye, highly volatile stocks are riskier, aur jin stocks ki low volatility hoti hai, they are less risky.

Toh options ke context mein, implied volatility kisi option ke underlying stocks ki expected volatility ka ek measure hota hai. Implied volatility looks at the stocks expected volatility, lekin within the time frame for which the options are valid.

Doston implied volatility options ke underlying stocks ki demand aur supply par depend karta hai. Saath hi, us stock ki price expectations, strike price and expiry date of the option also affect the implied volatility of its options. Iska matlab ye hua dost, ki agar kisi stock ki prices increase hone wali hain, then it will result in high priced option premiums.

So jitne bhi options listed hote hain, unki implied volatility ke liye ek unique sensitivity hoti hai. Jo options short dated hote hain, they are less sensitive to implied volatility. Long dated options, on the other hand, are more sensitive to implied volatility.

Ye difference options ki time value ke kaaran hota hai. Options ki pricing equation ka ek component time value bhi hota hai. Toh agar koi options jaldi expire hone wale hai, then unki time value kam hogi, compared to options that are valid for a longer time period. But time value is not that simple, it is affected by other factors too.

Now that we have covered the basics, ab hum dekhte hain, ki how implied volatility affects options, aur aap in changes ko kin strategies ke through tackle kar sakte ho.

Doston, experienced investors undervalued options khareedte hain aur overvalued options sell karte hain. So although aisa karna is not as easy as it sounds, it can help you select an appropriate strategy when working with options.

Agar aap options ki implied volatility ko accurately forecast karne me capable hain, then trading with options becomes much simpler. Toh chaliye dekhte hain what points to consider when forecasting implied volatility.

Pehla point. Sabse pehle, you should be able to determine, ki implied volatility rise ho rahi hai, ya fall ho rahi hai, and whether it is high or low. Implied volatility ko samajhne ke liye, one of the best methods is to visualise it in a chart.

Implied volatility decrease hone se options ke prices fall hote hain. But at it starts touching extreme highs and lows, implied volatility usually mean value par reset ho jaati hai.

Chaliye dekhte hain second point. Agar koi options high implied volatility ke kaaran expensive premiums yield kar rahe hain, toh iske peeche ususally koi na koi reason hota hai. Aise case mein, checking the news might be a good idea.

Aisi situations mein company se usually high expectations hote hain. Earnings ke announcements, product release ya approval, mergers ya acquisitions ke rumours, or some other factors might be contributing to high expectations from that stock’s performance.

Lekin yaad rahe - jo bhi events anticipate kiye jaa rahe hain, unke completion ke baad ususally implied volatility collapse ho jaati hai, ya fir mean value ke around reset ho jaati hai.

Theek hai na doston.

Toh chaliye dekhte hain third point. Doston jab implied volatility high hoti hai, tab aapko selling strategies consider karna chahiye. Expensive premiums par, buying options is usually not desirable. Aise situation me aap covered calls, naked puts aur credit spreads jaisi strategies consider kar sakte ho. Is podcast me, we will ot cover these strategies.

Aur ab hum dekhenge last point: Agar options low volatility levels par trade ho rahe hain, toh us situation me aapko buying strategies consider karna chahiye. Experienced investors aise time par usually long dated options purchase karte hain, aur forecasted volatility increase tak inko hold karte hain. Jab options low implied volatility par trade ho rahe hote hain, tab aapko puts, buying calls aur debit spreads jaisi strategies consider karna chahiye. Doston, options ki trading mein implied volatility ko forecast kar paana is very important. Aur saath hi, in forecasts ko samajhne ke liye, you need to be up to date with the current news, so that you can rationalise and understand these forecasts inside-out.

Toh doston, aaj ke podcast me itna hi. एंजेल वन की तरफ से आपको अलविदा. ये podcast शेयर करना ना भूलियेगा - याद रखियेगा की ज्ञान बाटने से बढ़ता है । और फिर अंत में तोह financial markets एक ऐसी university है जिसमे कोई professor नहीं, सब students ही है ।