Volatility part1 & part 2
The vast majority of CDM Trading’s investment strategies are based on volatility.
The word volatility comes from volare meaning to fly. Volatility in relation to options refers to how much the price of the underlying asset flies about’.
What is volatility and why is it so important to an option trader? The option trader, like a trader in the underlying asset, is interested in the direction of the market.
But unlike the trader in the underlying, an option trader is extremely sensitive to the volatility or speed of the market. Markets, which move slowly, are low volatility markets; markets, which move quickly, are high volatility markets.. . .