Quote “That’s what implied volatility is: the value of time.” I believe it important that your clientele understand what implied volatility is, and it’s not the value of time; rather, implied volatility reflects the volume of options trading – especially puts thanks to volatility skew. Theta is the factor which determines the value of time in the price of an option. Even so, your audience heard the point of the message: one must place the trade as soon as the opportunity presents itself, for the opportunity and/or profit is fleeting.
Quote “That’s what implied volatility is: the value of time.” I believe it important that your clientele understand what implied volatility is, and it’s not the value of time; rather, implied volatility reflects the volume of options trading – especially puts thanks to volatility skew. Theta is the factor which determines the value of time in the price of an option. Even so, your audience heard the point of the message: one must place the trade as soon as the opportunity presents itself, for the opportunity and/or profit is fleeting.