Timeline for Why does a call option's price increase with higher volatility?
Current License: CC BY-SA 4.0
19 events
| when toggle format | what | by | license | comment | |
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| Jul 1, 2020 at 22:18 | answer | added | Bob Baerker | timeline score: 1 | |
| Jul 5, 2019 at 17:49 | history | edited | Chris W. Rea | CC BY-SA 4.0 |
edited tags; edited title
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| Jul 4, 2019 at 18:00 | history | tweeted | twitter.com/StackFinance/status/1146841279931850754 | ||
| Jul 4, 2019 at 12:26 | answer | added | Prabhnoor Duggal | timeline score: 1 | |
| Jan 10, 2018 at 16:16 | answer | added | Fab | timeline score: 1 | |
| Sep 19, 2017 at 7:26 | answer | added | yashwini245 | timeline score: -1 | |
| Apr 5, 2017 at 16:41 | answer | added | Nam San | timeline score: 13 | |
| Dec 23, 2015 at 1:48 | history | edited | user32479 | CC BY-SA 3.0 |
Corrected conceptual mistake between implied and actual volatility
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| Dec 23, 2015 at 1:47 | comment | added | user32479 | This question was originally written wrongly. The option price depends on the actual volatility, whereas the question wrote about implied volatility. Implied volatility is what you get if you run the Black-Scholes equation in reverse - taking the current price and computing what volatility theoretically would have given it. I edited the question to correct this mistake. | |
| Dec 22, 2015 at 19:41 | answer | added | gnasher729 | timeline score: -1 | |
| Dec 22, 2015 at 6:40 | answer | added | College Student | timeline score: 5 | |
| Jan 29, 2014 at 21:29 | history | edited | user11865 |
Question directly about volatility and how it relates to price.
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| Jan 24, 2014 at 21:58 | comment | added | KeithS | You're correct, but both have power over the option price; the seller explicitly offers the price for the option (which he'll want to be as high as possible to cover his uncertainty), and the buyer has the choice to accept that price or not (the buyer will want it low for the same ends). Supply and demand; they'll meet in the middle. | |
| Jan 24, 2014 at 21:54 | comment | added | Victor123 | Volatility = unpredictability, but that goes both for the call option buyer and the seller, but looks like the benefit in thsi case goes to the seller only. | |
| Jan 24, 2014 at 20:59 | comment | added | KeithS | Volatility = unpredictability. Steady, relatively slow trading at only minor price variations allows a more reliable prediction of future behavior, making the party selling the option more confident in the (low) chance you'll exercise it at a significant loss to him. A highly volatile stock, trading at high volume for wildly varying prices, reduces the predictability of the spot price as of the option date, and therefore also reduces the confidence of the option seller that he won't lose his shirt on the deal. So, he'll want more money for the option to ensure he doesn't. | |
| Jan 24, 2014 at 19:31 | answer | added | JTP - Apologise to Monica♦ | timeline score: 13 | |
| Jan 24, 2014 at 18:06 | vote | accept | Victor123 | ||
| Jan 24, 2014 at 17:54 | answer | added | user11865 | timeline score: 2 | |
| Jan 24, 2014 at 17:37 | history | asked | Victor123 | CC BY-SA 3.0 |