To a successful option strategist, an understanding of both historical and implied volatility, as well as their interrelationship, is of crucial importance. Of course, once a trade is put on, whether a simple long position or a complex multi-legged spread, risk management can make or break even the most carefully planned strategy. For options this means knowing the “Greeks” of the position.
Option Workbench is a quantum leap forward in the analysis of the daily historical volatility, implied volatility extremes and skews, and unusual volume reports available on the Strategy Zone. Option Workbench integrates these data into a single spreadsheet like table that presents a profile of the option market for each stock, index and future covered. The option profile data can be sorted and filtered in various ways to allow a strategist to zero in on trading opportunities.
Using Option Workbench an option trader can quickly and easily zero-in on opportunities, compare the various strategies that can be utilized to take advantage of opportunities and perform sophisticated risk analysis.
Future posts on this blog will include topics covering the three primary benefits of using Option Workbench as well as why it is important to understand the effects of changes in implied volatility on even the simplest long option positions, understanding and using the “Greeks” and discussions about using volatility as an asset class.