No, this isn't a chicken or an egg scenario. Option markets pre-date BSM. Conversion-markets pre-date BSM. You arrive at implied vol via an option price. Post earnings vol open is no continuous. You remind me of the noobs who thought that shares cannot gap and most open where they closed the prev-day.
No, this isn't a chicken or an egg scenario. Conversion-markets pre-date BSM. You arrive at implied vol via an option price. Post earnings vol open is not continuous. You remind me of the noobs who thought that shares cannot gap and must open where they closed the prev-day. (fixing iPad typos)
wxy, no offense, but this is really the very very basics part. It’s even in the name, ‘implied’ It’s not implied price
It's implied volatility because it is implying the chance of the option finishing itm, so the price must be adjusted accordingly. IV goes up, chance of finishing itm goes up, price goes up. Give me the IV and my spreadsheet will calculate the live option prices...matching the brokers. Again people...don't give me an in to plug my spreadsheet! Options were a mess before Black-Scholes came along and solved the problem. I watched the documentary...the equation for option pricing resembled more of a psychoanalytical exercise than a calculation. (Can't find it on youtube)
Of the three of us, who has a google sheet that not only tracks pnl of multiple options strategies, but it also calculates live options prices with no importing of data or scripts??? I warned you guys...next I'll start posting screenshots. Also, let's not forget the (2008) Lambo and my other cars that are currently getting paid off via options.