How i can to figure out the volatility?

Hello everyone. I still trying to solve this problem.. For me, the knowledge how a IV calculated-is a key to understanding the option pricing... Can somebody help me with this problem.. I want to know how i can calculate the IV by my self...
From Russia with Love.
 
Quote from cvds16:

get this: http://www.amazon.co.uk/Options-Str...=sr_1_1?ie=UTF8&s=books&qid=1234772089&sr=8-1 the math to calculate vol is somewhere in the back
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hey men!!! It nice to meet you again :) ... How do you do ? .. I have read this book...

But my opinion is still the same... Without understanding how the IV calculating - i do not trading an option :) ... I think trading an option-it is not trading a price of basic instument- it is trading an option volatility ...
unfortunately, my strategy on option was broken down in autumn.. I have DD about 12 percent on my trading account and i stoped to trade... And now i seriously decide to solve my unknowledge in this question :) ..Thank for help me ..

From Russia with Love :)
 
Quote from jenek-cowboy:

Hello everyone. I still trying to solve this problem.. For me, the knowledge how a IV calculated-is a key to understanding the option pricing... Can somebody help me with this problem.. I want to know how i can calculate the IV by my self...
From Russia with Love.
More...

IV or Implied Volatility is just a number that you get by plugging in the market price of an option into an option pricing model, such as Black-Scholes or Binomial, and then solving for volatility.

The reason for doing this is that in option pricing volatility is the only unknown/unobservable variable.
 
it is explained there: it uses the lognormal curve, they use math to get an aproximation of that lognormal curve. Put in a s preadsheet with all values in and you get the vol. If you want to trade vol you better know how options really work = the greeks and know as much as a market maker. So you better really understand this http://www.amazon.co.uk/Option-Vola...=sr_1_1?ie=UTF8&s=books&qid=1234774874&sr=8-1 and this http://www.amazon.co.uk/Option-Mark...=sr_1_2?ie=UTF8&s=books&qid=1234774882&sr=8-2 If you don't understand this well, there is nothing I or anyone else on this site that is able to do anything for you. It's not rocket science, it's a matter of putting time and effort in.
 
Quote from MTE:

IV or Implied Volatility is just a number that you get by plugging in the market price of an option into an option pricing model, such as Black-Scholes or Binomial, and then solving for volatility.
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Sorry, may be i not understand..I trade Russia option market.. This place have no sufficient liquidity like CBOE or EVRONEXT.. And we are get the value of IV from the our trading program and set it in B-Sh.. And i think that we should know the IV in first, not but not vice versa...
 
Quote from jenek-cowboy:

Sorry, may be i not understand..I trade Russia option market.. This place have no sufficient liquidity like CBOE or EVRONEXT.. And we are get the value of IV from the our trading program and set it in B-Sh.. And i think that we should know the IV in first, not but not vice versa...
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Once again, there is no single way to estimate volatility. Read the books suggested by cvds. If you have read them and still don't understand a thing about volatility then maybe options trading is not for you, or at least volatility trading is not for you.
 
Quote from jenek-cowboy:

Sorry, may be i not understand..I trade Russia option market.. This place have no sufficient liquidity like CBOE or EVRONEXT.. And we are get the value of IV from the our trading program and set it in B-Sh.. And i think that we should know the IV in first, not but not vice versa...
More...
I don't know what it is with you: you are extremely stubborn and don't seem to WANT to understand this or either you are incredibly stupid (sorry to say so but it's time you got this). We have spent allready considerable time trying to explain this half a year ago. Seems you still don't understand. You can CALCULATE IT YOURSELF it doesn't matter what exchange this is traded on. If you have all the values IV comes out of the options model. IV volatility is the unknown, all the rest is known. (Stop thinking it SHOULD BE LIKE THIS OR THAT, you are WRONG !). Put some decent time and effort in to the books I mentioned and I mean read them two or three times, it seems you still haven't done this and you still don't understand anything. If I may sound harsh, it is because you have big opinions while you don't understand the subject. That's a big nono.
 
predicting FUTURE vol is something totally else, I have no knowledge about that, very very few people here on ET have, and those that have, won't give the secret away ! ! !
 
Quote from cvds16:

i If you want to trade vol you better know how options really work = the greeks and know as much as a market maker. So you better really understand this http://www.amazon.co.uk/Option-Vola...=sr_1_1?ie=UTF8&s=books&qid=1234774874&sr=8-1 and this http://www.amazon.co.uk/Option-Mark...=sr_1_2?ie=UTF8&s=books&qid=1234774882&sr=8-2 If you don't understand this well, there is nothing I or anyone else on this site that is able to do anything for you. It's not rocket science, it's a matter of putting time and effort in.
More...
THANKS...It is that i searched.. The first book i reedind now :) ..

My favorite question to all... Does the option trading-is a trading an IV? And if i want to trade volatility i have to understand the IV properties?!
 
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