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I think this is a good article too. Interview with Andrew Lo (MIT). Has some good bits on volatility, DE Shaw, and TA. http://www.derivativesstrategy.com/magazine/archive/1999/0399qa.asp

lol, i know the feeling.

Good article on floor specialist: http://www.derivativesstrategy.com/magazine/archive/2000/0700fea1.asp This is a good article too (not "a day in the life of" though): http://www.derivativesstrategy.com/magazine/archive/1999/0999qa.asp

Anyone ever been to the GOOG board (or any board for stocks) on Yahoo Finance? lol. What a waste of bandwidth. A circus of 5 year olds with web access. http://messages.yahoo.com/?action=q&board=GOOG

By the way, what typically happens on expiration day to a stock? GOOG's expiration day for options is next week.

On April 18th, the June 230 Call on GOOG was selling for $1.45. Today it's selling for $61. $14,500 investment returned $610,000 in 2 months.

Yeah, I guess it's an anomaly.

Never mind, I found it at businessweek. So this is interesting. Take a look at GOOG June 230 calls historical daily price data. Assuming you bought it in November for roughly $12, would you have kept it until now? It would have been a real test of will for me to have held it. This...

Before I start trading next month, I want to find out if GOOG options were just an anomaly or if indeed similar profit potentials (as a % move in option price) happen all the time. I hope some of that makes sense.

Wow, I did some research on the web about IV and volatility smiles/skews. I had no idea it was such an involved topic. [note to self: do research before asking questions on here]

Never mind my question. I found the answer: demand for an option determines IV. So makes sense it's different for different strikes.

I've been playing around on an options calculator and so far it appears that for the most part delta hurts an OTM option more than IV helps when an option goes even more OTM. So I guess most of the time that an IV spike is not enough to counter the loss in value from delta.

Follow up question: why do options of the same underlying/same expiration but at different strike prices have different IV? I thought IV was for underlying - why would it differ based on strike price?

Somewhat relevant to this discussion: In my paper trading via Optionsxpress, I bought GOOG 320 June call (just for observation purposes) on Monday. Today, GOOG is up 5 points, but the call has lost 30% of value just today. My guess is becaue IV has dropped. Kinda interesting to me...

Are you saying - and if so, it makes sense - that an OTM can go even more out of the money (say the underlying going up while you own a put) yet because of an increase IV (assume there is a huge increase) then the OTM put actually becomes worth more?

The reason I find this interesting is that conceptually I always thought of an OTM option as being in a race against time to get to the strike price and beyond so as not to expire worthless. But now I see that that way of thinking is only correct if I want to exercise the option (of course...

The reason I ask is because of IV. My guess is that if IV skyrockets for whatever reason, it would seem that the OTM option's value would jump and perhaps create a profit even tought it's still OTM. (Sorry for the newbie questions, but hey, who better to ask than all of you.)

Not looking to daytrade. There are a few stocks/options that I want to buy. Thanks.

Ok finally makes sense. Thanks guys. I've been studying options for about 6 weeks, so I don't know if I'm retarded and not getting it, or if my questions are expected for someone at my stage of learning. Things are clicking I feel, but once in a while a concept comes up that I just can't find...

Why would uncertainty increase - about whether an ATM expiring ITM/OTM - as time passes? Isn't it just as uncertain 80 days away as it is 5 days away from expiration? As a real-life example, I'm not any more certain today that an ATM GOOG June call will expire ITM/OTM than I am on June...