What's you favorite underlying?

Discussion in 'Options' started by torntech.com, Aug 10, 2002.

  1. Hey, what's your favorite symbol?

    I like the volatility and volume of the OEX. However I don't like the slowness of CBOE.

    Comparison of some different option series:

    QQQ 23.33 -1.02%     ATM (23) Aug Calls -14%     "Ratio" (14/1.02)= 13.7
    OEX 458.82 +0.36%     ATM (455) Aug Calls +0.88%     Ratio (0.88/0.36) = 2.4
    SPX 908.64 + 0.35%     ATM (905) Aug Calls +1.05%     Ratio (1.05/0.35) = 3.0
    MSFT 48.12 -1.62%     ATM (47.5) Aug Calls -26.7%     Ratio (26.7/1.62) = 16.5
    Am I right assuming that the higher the underlying price the larger the volatility of the option?

    I'm not really sure what I'm trying to prove here... Anyway it would be interesting to hear what options you are trading and why.

  2. def


    you would be wrong to assume the higher the price the higher the vol.

    a $ move is not the same as a % move.
  3. Pabst


    If anything there are two rules of thumb. Index's trade at lower vols then stocks. Only on the rarest of days do all components move in the same direction. Secondly the LOWER the price of the underlying , the HIGHER it's implied volatility usually is. It's more common for a $10 stock to move a couple of points then a $100 stock to move 20 points.