As I already said, this is a theoretical example, with the values picked at random, just for the sake of demonstration. The question to which I...
The IV curve is somewhat theoretical, of course. The figures were selected to make the example more striking. The main question is: does it make...
I came across a kind of paradox while trying to calculate the IV of a butterfly strategy. 1) Let’s suppose that we create a 90 / 100 / 110 1-year...
Thank you, Robert, I will think it over.
For American put it is clear now. Still a bit confused as to why time value can be negative for European puts...
Robert, this is a European options calculator (because the Black-Scholes model works only for European options, not American ones). I guess with...
Hi Robert, if we look at a standard Black-Schole calculator, then we can easily see that a put can have a fair value smaller than the intrinsic...
I recently by chance discovered that put options can have a negative intrinsic value, which can be easily seen on this graph: [ATTACH] Call...
There are so many ways to manage this risk: 1) Use a simple stop loss and close the trade if it had reached a certain loss level. 2) Hedge the...
Victor, I think the easiest way to determine whether a certain strategy is long or short volatility is to see how the value of the strategy...
The instrinsic value of a call is: Max (Price - Strike; 0) The intrinsic value of a put is: Max (Strike - Price; 0)
Victor, I think the best way to understand how an option strategy works is by looking at the option strategy chart. Here you can see what P/L you...
Brighton, thank you, I see. Seems a bit strange that companies like Yahoo or Google cannot provide them for free - like they do for stock...
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