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CortesInvestments

01/10/14 11:55 PM

#18149 RE: $$$DEEJ**$**MONEY$$$© #18147

Not sure if your being sarcastic but I was lol. Anyways, million dollar question right here.

So you explained to me why my options decreased In value. It was because the implied volatility fell hard and messed with my options. So now, the same stock, MU, is at 42% IV and the HV is at 50%. Statistically speaking, the options for this stock is cheap. So if you buy calls, and if the implied volatility increases with the stock moving a little, your options increase faster, correct? So now....

I'm looking at NFLX. I see a down trend on the IV. It is currently at 58%. The trend line indicates it will hit around 64% and fall back down if it continues the trend. So, you can make good money by buying cheap options and letting the IV RISE. But, is there a way to make money when the IV FALLS? Thanks in advance.