Volatility Charts - "Identify historical patterns that can help determine value"

Historical volatility information is vitally important when comparing an option’s current volatility levels to where they trade historically. OptionVue 5 produces 6-year charts of weekly average implied volatility (IV) plotted together with the statistical volatility (SV) of the underlying security.

OptionVue 5's Volatility Charts provide a plethora of important information including a percentile ranking number as indicated by the SV and IV numbers in brackets below the chart title...SV[25], IV[54].

When volatility "percentile" levels are at extremes, there may be trading opportunites based on widely followed "reversion to the mean" theories. When IV is at an extremely low percentile level, we may choose to buy options with the belief that IV is likely to increase over a given period of time and vice versa.

Price charts can also be overlaid and be useful in identifying repeatable (and tradable) price and volatility relationships (such as seasonal tendencies in futures).

Place your mouse over the blue price bars (top left corner) to view the price chart overlay

Each Volatility Chart also displays seven Moving Volatility Averages calculated over time frames ranging from "3-weeks" to "6 yrs". Here you can quickly reference and determine overall ranges to identify trends and trading opportunities.

Volatility trends are not uncommon and identifying extremes can be very useful in determining strategy choices. It is always important to know where the current volatility level is in relationship to its historic range.