Finding Annualized Volatility for Black Scholes Option Pricing?

Discussion in 'Options' started by Fain, Apr 7, 2021.

  1. Fain

    Fain

    Not good business to hassle 8-9 firms for calculations when everyone is busy. I'd rather not know if that was the only alternative lol.

    Am surprised that with all the quants on this board that there isn't a tool or easy reference point for finding a stocks Annualized Volatility.
     
    #21     Apr 7, 2021
  2. ZBZB

    ZBZB

    www.tradingview.com add historic volatility as a study.
     
    #22     Apr 7, 2021
  3. You poor quant, such a simple question and so many irrelevant answers, here goes :
    You may calculate the annualized vol by a simple rolling 90 days std. dev., that's close enough, but that's an academic price, not close to the real price of the option, why? Because options trader plug what's called implied volatility which is close, but not the same as the academic volatility, that's the excess volatility traders use when calculating the real option price, so if it's just close approximation you seek, use 90 days rolling std dev, if it's real prices, you will have to buy historical data from a high quality vendor, it doesn't come free
     
    #23     Apr 7, 2021
    never2old likes this.
  4. ajacobson

    ajacobson

    Many of the public companies that still grant options use consultant benefit managers like AON(The old Hewitt) or Watson and both have sunk a bunch of change into pricing the longer stuff and often the two of them don't agree.
    It's also why many PCs do restricted stock today instead of options. The options are a bitch to value and report. The original BS work was actually entitled something like valuing contingent corporate liabilities and the work was done relating to pricing farm equipment. An option by any name - still an option.
    AON used to have a group to make a market in these.
     
    #24     Apr 7, 2021
  5. Fain

    Fain

    Add historic volatility as a Study?

    upload_2021-4-7_16-10-55.png
     
    #25     Apr 7, 2021
  6. destriero

    destriero


    And completely worthless.
     
    #26     Apr 7, 2021
  7. ZBZB

    ZBZB

    click on full featured chart and then add study.
     
    #27     Apr 7, 2021
  8. Fain

    Fain

    This still doesn't give me the volatility.

    upload_2021-4-7_17-6-11.png
     
    #28     Apr 7, 2021
  9. ZBZB

    ZBZB

    Set hv to 365 days or whatever length you want.
     
    #29     Apr 7, 2021
  10. Fain

    Fain

    Was hoping for a quick easy reference tool to find the annualized volatility and plug that into the Black Scholes formula.

    Will send my symbols to an institutional trader who's a buddy of mine. He offered to calculate for me.
     
    #30     Apr 7, 2021