Implied Volatility: Historic vs. Implied | Options Trading Concepts


**A 1:40 Mike states in an example that "implied volatility would have overstated historical volatility" - he meant to say "implied volatility would have UNDERSTATED historical volatility" in this example**

Implied volatility expresses the perceived risk based on option prices, but is it accurate? Mike walks through the historical comparison of realized volatility vs implied volatility, and why premium sellers are generally paid more than they should be paid based on the statistics.

New to options trading? Mike breaks down trading strategies and concepts in a visual way for beginner to intermediate investors.



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Jean-François Labrie 

Very good video. One remark: being right 83% and wrong 17% of the time may be good ... or may be bad. It all depends on how much you benefit when you are right and how much you lose when you are wrong. You don't want to be winning pennies 83% of the time while losing dollars 17% of the time. Cheers!

rajesh nayak 

This is the best video so far. Thank you. Love from Mangalore (India)