Скачать или смотреть Using Theoretical Value Benchmarks on an Option Chain Market Chameleon Tutorial

Have you ever found yourself questioning whether the premiums in an option chain are too high or too low? It can be challenging to determine a fair price with the multitude of contracts available. Just like you wouldn't purchase a home without comparing its price to that of similar properties, you need a way to benchmark an option's premium. This is where Market Chameleon's Theoretical Value Benchmarks come into play. This valuable tool allows you to quickly evaluate whether a premium is "elevated, subdued, or in line with a benchmark" by comparing the market's price to a theoretical value.

At the core of this tool is a standardized option pricing model, such as the Black-Scholes model, which computes a theoretical value for each option contract. The key component is your volatility assumption. You have the flexibility to select from various key benchmarks to gain a clear perspective:

Custom Forecast: If you have a unique perspective on the stock's future direction, you can input a custom volatility based on your forecast. This enables you to assess if the market is valuing the option higher or lower than what you anticipate its future volatility to be.
Historical Volatility: To determine if the market is overreacting, you can utilize a benchmark based on the stock's actual volatility over the past 20 days or even the previous year. This method provides insight into whether current implied volatilities are disproportionate to the stock's recent price movements in reality.
Historical Implied Volatility: Taking it a step further, we compare the current implied volatility to what has been customary for similar options in the past. The IV percentile promptly informs you if today's IV is at a high or low point within its historical range. For instance, an 80% percentile indicates that 80% of historical implied volatilities for a similar option were lower than the current one, suggesting that today's premiums are relatively high.

It is essential to acknowledge that these are benchmarks, not predictions. The future is uncertain, and models are not flawless. However, by enabling you to juxtapose market prices against a variety of standardized assumptions, this tool equips you with valuable insights. It assists you in identifying potential opportunities and making more informed decisions by pinpointing premiums that are either elevated or subdued compared to a transparent, data-driven benchmark.

Are you ready to start benchmarking your options? Explore the Option Chain for Google (GOOG) and experiment with the theoretical values feature yourself: [Market Chameleon - GOOG Option Chain](https://marketchameleon.com/Overview/...)

Financial Disclosure: Market Chameleon offers data and analytical tools for informational purposes exclusively. The content of this article and the utilization of the tools discussed should not be construed as financial advice or a recommendation to trade any security. Options trading carries considerable risk and may not be suitable for all investors. There is a potential to lose all or more than your initial investment. Always consult with a qualified financial professional before making any investment choices. Past performance does not guarantee future results.
tool used https://marketchameleon.com/Overview/...
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