Volatility Index Comparison
Video Tutorial
beeTrader – Volatility Index Comparison
Understanding the Volatility Index Comparison function
Introduction: the volatility indices represent the implicit volatility mediated by a series of options on different expiries. The Volatility Finder completes the volatility analysis which analyzes expiry by expiry having real time information, for example to build calendar strategies…but not only.
beeTrader’s Volatility Index has a proprietary calculation mode that differs from how the other indices are calculated and therefore absolutely not COMPARABLE measures.
We devised this algorithm because there was no Volatility Index that indicated not so much the implied volatility that I already find in the other indices, but gave an indication (Index) of the probable trajectory of the underlying. We have extended it to all the instruments dealt with and you can find it on stocks, currencies, futures and bonds.
This tool allows you to compare the historical graph of two titles whose graphical representation is normalized to favor comparison. For both titles, the corresponding Volatility Index is also displayed for a more complete evaluation.
Four graphs are then shown, each can be selected / deselected by clicking on the name at the top.
With this analysis the user will clearly see the differences between the Volatility Index of the selected securities bearing in mind that the options are sold with high volatility and eventually bought with low volatility.