Ref: http://www.optionstradingsignals.com/understanding-implied-volatility-when-trading-options-part-1/
1 Std Dev = 68% Probability
2 Std Dev = 95% Probability
3 Std Dev = 99% Probability
This formula is fine for 1 Std Dev
1 Std Dev = Price x Volatility x SQRT( Calendar Days/ 365.25)
68% = Price x Volatility x SQRT( Calendar Days/ 365.25)
*************
Question1: Whats the above formula for 2 Std Dev ?
95% = ???
Question2: Whats the above formula for any probability percentage ?
75% = ???
NOTE: I assume you dont change volatility to fit, as thats a fixed variable.
Any ideas???
Thanks
1 Std Dev = 68% Probability
2 Std Dev = 95% Probability
3 Std Dev = 99% Probability
This formula is fine for 1 Std Dev
1 Std Dev = Price x Volatility x SQRT( Calendar Days/ 365.25)
68% = Price x Volatility x SQRT( Calendar Days/ 365.25)
*************
Question1: Whats the above formula for 2 Std Dev ?
95% = ???
Question2: Whats the above formula for any probability percentage ?
75% = ???
NOTE: I assume you dont change volatility to fit, as thats a fixed variable.
Any ideas???
Thanks