Getting Started
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de
Options Insight
Whether you’re a seasoned pro or new to options trading, the diverse features of TC Options Insight help you explore volatility trends and easily navigate suitable strategies.
schedule
5
min
Using the Strategy Lab you can find different strategy outcomes based on your unique investing preferences, trade style and risk level. There are three questions to answer that lay the groundwork for a strategy built around your goals.
Next to the strategy questions, there is a price chart which helps us see historical and expected price movement. The default charting view shows a volatility cone, a handy visual for estimating the potential range of stock’s price based on volatility.
The cone begins with today’s price of 234.45 and widens the further we move forward as the future’s uncertainty increases. The wider the cone, the more volatile the stock is.
We can see that a month from now, the price will likely be within the range of 247.13 or 221.37, something many refer to as the “swing”.
Within two months, this range expands to a high of 253.45 and 215.05.
Question #1 in the Strategy Lab explores what direction we believe the stock is likely to go: up or down?
To help answer this question, you can overlay the most recent technical outlook using Technical Views.
Technical Views offers key price levels and a directional bias, utilizing Trading Central's proven trend-following methodology, developed and managed by the experienced TC Analyst team.
Based on this research, I’m going to note within the questionnaire that I believe the stock’s price will go up.
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Question #2 is to assess the potential magnitude of the move. Is the stock trading at a new record high with room to run, or is there limited upside due to overhead resistance? Will the move be slightly upward or significantly upward?
Using the Technical Views levels, I see a resistance level at $242.30 so I’ll choose “slightly upward”.
The last question asks about your primary focus for trading options in your chosen stock. Review the list and explanation of each.
I’ll choose “Limiting My Risk”, which means I’m interested in managing risk more effectively by utilizing strategies that have clearly defined risk characteristics, aiming to limit my potential losses.
Submit for your results.
Based on your answers, you now have three suitable strategies: a bull call spread, a long call and a bull put spread.
Looking at the chart, the highlighted areas indicate the maximum gain and risk of the selected strategy. You can either choose to “Trade ” or restart the smart-filter.
This is a great resource for a high-level view of all the key volatility data points required to form a strategy.
Looking at the stock AAPL, let check out the different insights:
1. Implied Volatility Rank (IVR):
The IVR helps traders determine if the current implied volatility of an option is high or low compared to its historical volatility over a given time frame.
It guides traders in deciding whether to favour buying or selling options based on volatility conditions.
AAPL’s current IVR is 9/100 compared to 14/100 a week ago. This is lower, which could make debit spreads more favourable.
2. Volatility Levels & History:
Use the Volatility Levels to visualizes the gap between implied and historical volatility, while the Volatility History widget plots these values over time for comparison. There’s currently an overall downward trend in both implied and historical volatility.
3. Upside/Downside Volatility Bias:
This metric helps determine if traders are anticipating greater volatility in a potential upward or downward move. It looks like option traders are indicating a bearish or downside bias.
4. Timeline Volatility Bias:
Use this to identify whether more expensive premiums are found in short-term or longer-term dated options. The example below shows options premiums are slightly more expensive in longer term dated options for AAPL.
5. Key Data:
Important metrics at a glance that impacts option premiums and volatility, such as upcoming earnings reports and dividends.
6. Expected Price Movement:
These insights help traders assess anticipated price movement over the next few monthly expirations based on options premiums.
7. Peer Comparison:
Use this chart to review how the volatility data for AAPL measures up against other leading stocks in the same sector.
Reorder any of the columns for easy comparison.
As an example, if I’m interested in writing credit spreads I can sort the Implied Volatility Rank from highest to lowest amongst leading technology stocks. Reordering the ratio of implied volatility and historical volatility helps clearly identify those with the largest implied volatility spread.
Using the Strategy Lab you can find different strategy outcomes based on your unique investing preferences, trade style and risk level. There are three questions to answer that lay the groundwork for a strategy built around your goals.
Next to the strategy questions, there is a price chart which helps us see historical and expected price movement. The default charting view shows a volatility cone, a handy visual for estimating the potential range of stock’s price based on volatility.
The cone begins with today’s price of 234.45 and widens the further we move forward as the future’s uncertainty increases. The wider the cone, the more volatile the stock is.
We can see that a month from now, the price will likely be within the range of 247.13 or 221.37, something many refer to as the “swing”.
Within two months, this range expands to a high of 253.45 and 215.05.
Question #1 in the Strategy Lab explores what direction we believe the stock is likely to go: up or down?
To help answer this question, you can overlay the most recent technical outlook using Technical Views.
Technical Views offers key price levels and a directional bias, utilizing Trading Central's proven trend-following methodology, developed and managed by the experienced TC Analyst team.
Based on this research, I’m going to note within the questionnaire that I believe the stock’s price will go up.
Question #2 is to assess the potential magnitude of the move. Is the stock trading at a new record high with room to run, or is there limited upside due to overhead resistance? Will the move be slightly upward or significantly upward?
Using the Technical Views levels, I see a resistance level at $242.30 so I’ll choose “slightly upward”.
The last question asks about your primary focus for trading options in your chosen stock. Review the list and explanation of each.
I’ll choose “Limiting My Risk”, which means I’m interested in managing risk more effectively by utilizing strategies that have clearly defined risk characteristics, aiming to limit my potential losses.
Submit for your results.
Based on your answers, you now have three suitable strategies: a bull call spread, a long call and a bull put spread.
Looking at the chart, the highlighted areas indicate the maximum gain and risk of the selected strategy. You can either choose to “Trade ” or restart the smart-filter.
This is a great resource for a high-level view of all the key volatility data points required to form a strategy.
Looking at the stock AAPL, let check out the different insights:
1. Implied Volatility Rank (IVR):
The IVR helps traders determine if the current implied volatility of an option is high or low compared to its historical volatility over a given time frame.
It guides traders in deciding whether to favour buying or selling options based on volatility conditions.
AAPL’s current IVR is 9/100 compared to 14/100 a week ago. This is lower, which could make debit spreads more favourable.
2. Volatility Levels & History:
Use the Volatility Levels to visualizes the gap between implied and historical volatility, while the Volatility History widget plots these values over time for comparison. There’s currently an overall downward trend in both implied and historical volatility.
3. Upside/Downside Volatility Bias:
This metric helps determine if traders are anticipating greater volatility in a potential upward or downward move. It looks like option traders are indicating a bearish or downside bias.
4. Timeline Volatility Bias:
Use this to identify whether more expensive premiums are found in short-term or longer-term dated options. The example below shows options premiums are slightly more expensive in longer term dated options for AAPL.
5. Key Data:
Important metrics at a glance that impacts option premiums and volatility, such as upcoming earnings reports and dividends.
6. Expected Price Movement:
These insights help traders assess anticipated price movement over the next few monthly expirations based on options premiums.
7. Peer Comparison:
Use this chart to review how the volatility data for AAPL measures up against other leading stocks in the same sector.
Reorder any of the columns for easy comparison.
As an example, if I’m interested in writing credit spreads I can sort the Implied Volatility Rank from highest to lowest amongst leading technology stocks. Reordering the ratio of implied volatility and historical volatility helps clearly identify those with the largest implied volatility spread.
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