Implied volatility of a stock is the future volatility and is calculated using the derivatives of the underlying stock. The factors used in calculating implied volatility are given below:
1.Risk Free Rate
2.strike price
3.Spot price
4.time to maturity
5.option's price.
6.option type - call / put
Given the stock historical volatility, finding the option price is easier using black–scholes formula. To know more Black–Scholes Formula, click here.
But finding the volatility using this formula is a bit difficult, to read the complete article click the following link.
Click here to read the entire article
Please visit us at http://www.softwareandfinance.com
No comments:
Post a Comment