Is IV range similar to HV range?

Discussion in 'Options' started by Wait4proof, Dec 26, 2012.

  1. Is an option's IV range typically similar to the UL's 30-day HV range?

    As in, can you use the HV range to gauge the IV levels?
  2. how many ways can you explain that.. IV is the future implied distrobution.. historical is what actually happen.. they are never exactly the same.. sometimes implieds exhibit a large jump that doesn't happen.. sometimes realized have jumps that implieds didn't have priced in..
  3. Range vs. Range?
  4. Pricing on future distro does not necessarily correlate with realized distro.. forecasting vol can have a basis in realized but a fuzzy one.... isnt a distro a range of prices of sorts... GARCH is a vol forecasting tool assuming mean reversion.. sure at times there is correlation but what are you trying to accomplish...

    Would you swim across a lake that was on average 4 foot deep based on past lake measurements.... you'll drown... jumps are generally smoothed right out of view the larger more so called stable the time frame