IV Charts

You have to select

1) The market your stock is in

2) The ticker of your stock

You are then shown a stockprice chart of the ticker you have chosen with the

choice of 5 overlays and 5 indicators, these can be shown above or below the

stockprice chart. The Overlays and Indicators are explained below.

The middle chart is used to show Implied Volatilities, Put, Call and both combined and

historical volatility. This chart is used to determine if IV is high, low or moderate. You

can also compare IV and the HV20 (historical volatility 20 day average), this will tell

you if options are cheap or expensive.

The third chart shows the daily put and option volume chart. Extremes may indicate

a trend change.

Overlays

Simple Moving Average

A moving average which gives equal weighting to each day's stock price data

Should be used when the stock is 'trending' i.e. bullish or bearish trend

The first variable is the number of days used for the Simple Moving Average

Exponential Moving Average

A moving average which places a greater weighting to recent data

Should be used when the stock is 'trending' i.e. bullish or bearish trend

The first variable is the number of days used for the Exponential Moving Average

Bollinger Bands

An overlay developed by John Bollinger. Three lines with the middle line being a SMA Simple

Moving Average. The upper band is the SMA plus 2 standard deviations. The lower band is the

SMA minus 2 standard deviations. Standard deviation is a statistical concept, 2 standard deviations

ensures that 95% of the price data falls between the upper and lower band.

If the stockprice is above the upper band, it is considered overextended and should fall. The reverse

is true if the stockprice falls below the lower band.

If the bands are tight together it indicates that stock volatility is low, if the bands are very wide it conversely

indicates that stock volatility is high. This volatility indication can be used to help decide which option strategy would be appropriate.

The first variable is the simple moving average. The second variable is the number of standard deviations

Bollinger Bands (area)

The same as Bollinger Bands, but the area between the upper & lower band is shaded in.

The first variable is the simple moving average. The second variable is the number of standard deviations

Indicators

IV_C

Default=1

This indicator shows the daily Implied Volatility (IV) for the Call options

You should use this for strategies which are short term, less than 3 months

IV_P

Default=1

This indicator shows the daily Implied Volatility (IV) for the Put options

You should use this for strategies which are short term, less than 3 months

IV_CP

Default=1

This indicator shows the daily Implied Volatility (IV) for the combined Call and Put options

You should use this for strategies which are short term, less than 3 months

IV_C6mnth

Default=1

This indicator shows the  Implied Volatility (IV) for the Call options 6 months in the future

You should use this for strategies which are medium term, less than 6 months

This indicator may not be available if option series do not exist 6 months in the future

IV_P6mnth

Default=1

This indicator shows the Implied Volatility (IV) for the Put options 6 months in the future

You should use this for strategies which are medium term, less than 6 months

This indicator may not be available if option series do not exist 6 months in the future

IV_CP6mnth

Default=1

This indicator shows the Implied Volatility (IV) for the combined Call and Put options 6 months in the future

You should use this for strategies which are short term, less than 6 months

This indicator may not be available if option series do not exist 6 months in the future

IV_C1yr

This indicator shows the Implied Volatility (IV) for the Call options 1 year in the future

You should use this for strategies which are medium term, less than 1 year

This indicator may not be available if option series do not exist 1 year in the future

IV_P1yr

This indicator shows the Implied Volatility (IV) for the Put options  1 year in the future

You should use this for strategies which are medium term, less than 1 year

This indicator may not be available if option series do not exist 1 year in the future

IV_CP1yr

This indicator shows the Implied Volatility (IV) for the combined Call and Put options 1 year in the future

You should use this for strategies which are short term, less than 1 year

This indicator may not be available if option series do not exist 1 year in the future

HV

Historical Volatility, the 20 day HV is mostly used to compare against IV_CP to see

if the options are expensive, cheap or moderate compared to the past.

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