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Basic, but important (options) :D
You could say the options market is fundamentally a market of probabilities.
Delta is often interpreted as the probability of finishing ITM, while implied volatility (IV) reflects the market’s expectation of the future price distribution over a given time horizon.
Don’t confuse that with the fundamental drivers that influence the market itself. With options or futures you’re positioning around what the market may do, not influencing what the market will do.
It’s a fairly broad topic (derivatives) to be honest, but you should follow an order to learn finance and investment (CFA syllabus) if you start with derivatives without understanding other things about markets and investment (management), you might get "disappointment".
You could say the options market is fundamentally a market of probabilities.
Delta is often interpreted as the probability of finishing ITM, while implied volatility (IV) reflects the market’s expectation of the future price distribution over a given time horizon.
Don’t confuse that with the fundamental drivers that influence the market itself. With options or futures you’re positioning around what the market may do, not influencing what the market will do.
It’s a fairly broad topic (derivatives) to be honest, but you should follow an order to learn finance and investment (CFA syllabus) if you start with derivatives without understanding other things about markets and investment (management), you might get "disappointment".
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Kris (@KrisAbdelmessih) on X
A Visual Primer For Understanding Options
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