Implied Volatility Trading Strategy: What Options Traders Need to Know

Implied volatility is a measure of the market's expectation of a stock's future volatility.

Options traders can use implied volatility to determine the market's expectation of a stock's future price movement.

Implied volatility can be compared to historical volatility to determine if options are overpriced or underpriced.

The implied volatility trading strategy involves buying options when implied volatility is low and selling options when implied volatility is high.

This strategy can be profitable if the market's expectation of future volatility is incorrect.

Options traders should also consider other factors, such as the stock's fundamentals and technical analysis, when making trading decisions.

It is important to have a solid understanding of implied volatility and options trading before implementing this strategy.

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