Module 2 Lesson 5

Question 1

Implied Volatility is?

Answer 1

The level of volatility based on options prices today.

Question 2

Realized volatility is _____ looking and implied volatility is _____ looking.

Answer 2

Backward, Forward.

Question 3

Implied volatility almost always turns out to be?

Answer 3

Higher than realized volatility.

Question 4

If implied volatility almost always overstates what actually happens, that means that?

Answer 4

options are almost always overpriced.

Question 5

As a net seller of options, you have a built-in edge called?

Answer 5

implied volatility edge or the IV edge.