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The Option Alpha Podcast

135: You Don't Need A Degree In Financial Engineering To Understand How Implied Volatility Works

The Option Alpha Podcast

Kirk Du Plessis

Education, Options Trading, Trading, Investing, Stock Market, Business, Finance

4.81.2K Ratings

🗓️ 20 June 2018

⏱️ 45 minutes

🧾️ Download transcript

Summary

Show notes: http://optionalpha.com/show135 Today we'll condense potentially an entire semester of financial engineering into a single podcast episode. The goal being to help completely understand how implied volatility works, why we need it, where it comes from, and how we can profit from it as option sellers. This show is a little longer than normal but I think the time spent walking through the foundational elements of implied volatility and it's impact on option pricing are critical for an...

Transcript

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0:00.0

You're listening to the Option Alpha Podcast from Option Alpha.com where we show you how to make

0:06.3

smarter trades learn how the stock market really works and generate consistent monthly

0:11.2

income. Now your host and head trader at

0:15.0

option alpha.com Kirk depluses.

0:20.0

Hey everyone this is Kirk here again from option alpha.com working every single week to make

0:24.3

this the most popular investing podcast offered online and in iTunes because it's based on one thing

0:30.3

and one thing only and that's helping you guys make smarter trades.

0:33.4

So again thanks for tuning in today on today's show we are going to be talking

0:37.8

in depth about implied volatility and why you don't need a degree in financial engineering to of I think once you peel back some of the layers it's actually very easy to understand and we're going to try to make it

0:54.7

hopefully really really easy for you to understand because it is really the hallmark or the

0:59.1

core of what we do as options traders is using implied volatility to our advantage, selling rich implied

1:06.5

volatility compared to historical standards, and trying to profit from this mispricing that

1:12.0

happens throughout the expiration month.

1:14.7

So we're going to be talking about this all through the podcast here today.

1:17.8

Again, you can get more resources and links to different sections on volatility and

1:22.1

courses that we have on volatility by heading over to

1:24.9

option alpha.com slash show 135 again that's just the number 135 option alpha.com

1:30.6

slash show 135 now in today's show what I want to try to do is I want to try

1:35.2

to hit on a bunch of different topics and I've kind of penciled things down

1:38.2

because my mind was going all over the places I was thinking through how I

1:42.1

wanted to describe implied through how I wanted to describe implied volatility, how I wanted to

1:45.1

present implied volatility to you guys so that you can understand how it works and then how it

...

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