Latest Articles

Why Is We The North Market the Go-To Platform for Buying Premium Cannabis Products in Toronto?

Toronto is known for its vibrant cannabis culture, where consumers seek high-quality products that match their lifestyle, preferences, and needs. With so many options...

Daily Free Football & Basketball Betting Tips: Are They Worth Following?

In the fast-paced world of online information, thousands of sports fans and bettors search for free football and basketball betting tips to gain insights...

10 Quick Ways to Get Rare Fallout 76 Items Without Glitching

In Fallout 76, rare items are a core part of the experience. Whether you're after powerful weapons, unique apparel, or coveted plans and mods,...

Modern Makeovers Made Simple with Metal Peel and Stick Tile

Modern Makeovers Made Simple with Metal Peel and Stick Tile When it comes to transforming a room quickly and effectively, few options rival the impact...

Choosing a Travel Agency Without Stress: Mistakes to Avoid

A trip begins long before boarding a plane, with choosing a travel agency. It is up to the agency to decide whether your vacation...

Exploring Home Selling Services: Options and Benefits

Selling a home can be a daunting task, but with the right home selling services, the process can be streamlined and even profitable. Whether...

How to Choose the Best Flight Options for Your Umrah Journey

The Umrah, or lesser pilgrimage to Mecca, is essentially a spiritual and religious obligation. However, the sanctity of the beginning occurs much earlier than...

Maximizing Warehouse Efficiency: Key Steps and Strategies

In an environment of economic stress, characterized by a heightened demand for delivery times, logistics cost control, and increasing expectations from customers and demands...

Driving Classes Are Outdated — Here’s What Works in 2025

The phrase driving courses are outdated sounds like a rejection of the entire system, but the problem is not the courses themselves, but how...

Best Immigration and Customs Enforcement Law Services in New Jersey

There are many on the right looking for Trust is important Immigration and customs control are complex processes that require precise knowledge of the...

From Patient Admission to Payment: Total Revenue Management

Revenue Management ” offers a linear and manageable picture, as if medical billing agency revenue is a clearly defined path that can be simply...

The Role of Construction Accident Lawyers in Liability Cases

The construction industry is most likely one of the sectors that is most susceptible to workplace injuries. Falling from heights, collapses, electrocutions, collisions with...

Digital Marketing Strategies for IT Companies: Harness the Cosmic Power!

In the ever-evolving cosmos of IT companies, digital marketing serves as the starship that propels these tech-savvy enterprises to B2b SaaS PPC advertising company...

How to Secure the Best NRI Loans and The Benefits?

For Non-Resident Indians (NRIs), buying a house in India can be a good way to feel connected to the country and also make good...

Sustainable Building Practices and Green Real Estate

The word "sustainability" has gained some traction in the real estate industry. But, unless we get the actual meaning of sustainability and why it...
HomeFinanceInvestment TipsHow To Use Volatility with Long Term Options Tactic? 

How To Use Volatility with Long Term Options Tactic? 

In investment sector volatility is seen as a risk, but in reality, it is a part of the trade market. Risk is not that happens always but a thought of what may happen. Therefore, likening volatility with risk will not work.

True risk is the opportunity for permanent capital loss. If an underlying stock shows a 50% net gain over 5 years then imagine the times value wildly fluctuated, so this is a great good long-term return. Besides, if you traded the stock during an extreme dip within that period the scene would be entirely different. However, over the long term, the underlying stock showed a good 50% net gain on investment. So, volatility is a synonym for potential losses [risks] for the short term and not for the long term. 

Volatility is an investment opportunity for the long term. Choose options trading that offers investors the right to sell or buy an underlying stock at a specific price with an expiry date. You can learn how to leverage volatility for gain on trading forum platforms like Steady Options. 

Options strategies are like owning an insurance agency. People spend a lot on home insurance premiums with the knowledge that the chances to file a claim are 1%. Insurance providers earn a profit from these paid premiums. In the same way, options on volatility can be used to earn a side income from underlying assets with limited risk.

Sell options to attach market index volatility. Over the long term, you can earn profits based on index fluctuations. According to market index performance of the last four to six decades, the longer the strategy the risk for capital’s permanent loss reduces. 

See also  How Bfic Network App works - the best App for stake-mining Crypto

Volatility types

For options, there are two types of volatility. 

  • Implied volatility [IV] – Market participants predict how much the underlying securities will move in the future. It is a real-time estimation of an asset value as it trades. When there is a downtrend the IV increases and vice versa. High IV means the price movement expected is high in future. 
  • Historic Volatility [HV] – It is also called statistical volatility. It measures the speed of price change across a specific period. HV is calculated every year because there are constant changes. It can be calculated daily for short time frames. Higher the HV percentage the higher the option’s value.

Underlying assets’ long-term volatility is believed to be mean-reverting. Based on some fundamental volatility’s average level is suggested. If the volatility level is too high above this average then there is a decline but if it is too below then there is a surge. 

With rising volatility, the options prices increase, so buy contracts to earn profit from surging price swings. Markets can move in either direction with high volatility, so buy strangle or straddle because both are indifferent to market directions. 

If volatility is moving downwards, then earn profit from selling options. Remember never to sell naked options [unhedged] because it is highly risky. 

Investors need to be patient while investing in a long term strategy. Slow and steady is the approach that can bring good profit even from harnessing volatility. 

Trending

Gaming for Good: The Social Impact of Video Games

Introduction: Beyond the realms of entertainment, video games have emerged as a force for positive change, contributing to social causes and fostering communities dedicated to...

Ayutthaya: Tracing Thailand’s Royal Legacy Amongst Ancient Ruins

Ayutthaya, a UNESCO World Heritage Site located in Thailand, attracts tourists with its extensive history and impressive ancient remains. Ayutthaya, formerly a powerful capital...

14 Best Free Ringtone Apps for Android

The time when you had to spend hours searching online on different websites for the ringtones of your choosing is long gone. These days,...

Animal Crossing: New Horizons includes a comprehensive walkthrough that walks players through the process of finding treasure islands – mtmmo

I'm just joking. If you follow where I'm going with this, the thief is the one who figured out how to move the switch...

Best Home Improvement Tips for Your New Home

Your home is your haven and sanctuary. Imagine coming home after a long day of hard work and stress. Home is the place where...

Our Top Beauty Treatments for 2022 will help you start the new year feeling your best

woman with youthful skin gazing happily into a mirror after obtaining her Tuscaloosa Medspa 2021 beauty treatments woman with youthful skin looking happily into...

What percentage does a personal injury lawyer take?

When individuals hire a personal injury lawyer to represent them in cases such as car accidents, workplace injuries, or medical malpractice, they are typically...

Anole Lizards Forest Appearance

The term Anole Lizard refers to one of over 400 species of mostly color-changing lizards found within South as well as Central America. There is...

Best Blooming Flowers Ideas to Brighten Your Home Garden

Gardening is not just a hobby or a pastime activity. It could be an expression of love towards nature. It could also be a...

FBISD Is a Great Place to Learn

Sugar Land Independent School District serves the city of Sugar Land and unincorporated areas Meadows Place and First Colony as well as Fort Bend...