OmniTrader Upgrade Forums
OptionTrader
Option software
6 replies, 1089 viewings
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OmniTrader Upgrade Forums
OptionTrader
Option software
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Last Activity 12/1/2022 8:14 AM 6 replies, 1089 viewings |
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KenJ New User Posts: 1 Joined: 9/18/2018 Location: Toronto  User Profile |
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| LSJ Legend  Posts: 515 Joined: 8/17/2006 Location: Citrus Springs, FL User Profile |
(ImpliedVolatility() / (ImpliedVolatility()+HistoricalVolatility()))*100 > 55. You can change the number but I found 55 to my liking. I also use DTOE and put and call OI to get qualified candidates. | ||
| AlanD Member  Posts: 35 Joined: 12/1/2006 Location: Waipio, Hawaii User Profile |
Alan | ||
| Buffalo Bill Legend Posts: 539 Joined: 10/3/2006 Location: Stafford, VA User Profile |
Is this IV-HV relationship good for Call buyers?  Attached file : Option OS.png (12KB - 243 downloads) | ||
| LSJ Legend Posts: 515 Joined: 8/17/2006 Location: Citrus Springs, FL User Profile |
I scan for option trades with this: I also plot "ImpVol" and "HistVol" in the same panel to see the relationship. In the same chart I also use IndIVPercentile(250) to get a long look at IV. I am trading almost all option trades now just selling premium and waiting for decay or expiration OTM. There are statistical studies that show this process to have a high probability of profit. I like trading like this now that I am an old geezer because I can take a couple days off and rely on defined risk or stops set on the underlying and the trades are usually 10 days+. I really don't like buying options since it is a wasting asset. I did buy a few calls on real beat up stocks when the calls were cheap but that is the only way I buy premium. I used to use another option platform but I am been working with Option Trader 6 and modifying some of the trade plans to get what I want. But yeh, if you are buying calls you would want to buy calls with low IV. I have seen trades in call buying that even though the buyer got the direction right they lost money on the trade becsue IV increased. (You know all about headwinds and tailwinds <:) [Edited by LSJ on 2/8/2021 9:59 AM] Attached file : IV.jpg (22KB - 448 downloads) | ||
| Randy Regular Posts: 50 Joined: 12/6/2003 User Profile |
I use a spread to mitigate IV risk. Both options generally change at similar rates so you get to enjoy getting the direction right when IV goes against you. Thanks, Randy | ||
| LSJ Legend Posts: 515 Joined: 8/17/2006 Location: Citrus Springs, FL User Profile |
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