Options Pricing & Volatility

Without a doubt we get our "edge" as options traders by mastering options pricing and volatility. Specifically the fact that long-term implied volatility always overstates the expected market move; thus options are always overpriced long-term.

This module includes lessons on mastering implied volatility and premium pricing for specific strategies. We'll also look at IV relativeness and percentiles which help you determine the best strategy to use for each and every possible market setup.

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How To Find Option Price Quotes

Using AAPL stock and options as our default case study we'll show you multiple ways to search and find option price quotes including your br...

Understanding The Math

Welcome back to statistics class. Undoubtedly more important that understanding the Black Scholes model for pricing (which we purposesly don...

IV vs. IV Percentile

Understanding (and mastering) the difference between a stock's actual implied volatility and that IV's percentile or rank going back histori...

Probability of Profit vs. Probability of Touch

Probabilities come in many forms and today we'll discuss the differences between prob of profit and prob of touch. This becomes of the key p...

Option Probability Curve

We are all visual learns and in this video I'll show you a simple but powerful indicator to help you master the option probabilities with th...

Bid-Ask Spread Defined

The stock market is the biggest and most efficient live auction on the planet. But even within this huge market there are very illiquid mark...

IV Expected vs. Actual Move

One of the ways we gain an "edge" in the market selling options is because IV tends to overstate the actual expected move of a stock in near...

The "Greeks"

Trying to predict what will happen to the price of a single option or a position involving multiple options as the market changes can be a d...

Fatal Pricing Errors

We'll take a possible TWTR trade today and look deeper into the #1 fatal error people make that traps them into a losing cycle before they e...

Inverse ETFs

Inverse ETFs or exchange-traded funds were created by using various derivatives for the purpose of profiting from a decline in the value of ...

Backwardation/Contango

Contango is when the futures price is above the expected future spot price. Because the futures price must converge on the expected future s...

Options Parity

Options parity happens when a stock is trading at its intrinsic value with no extrinsic value (or time value) in the option. Parity will ge...

Kirk Du Plessis

Course Instructor

Full-time options trader, real estate investor & Option Alpha founder. Former mergers and acquisitions investment banker for Deutsche Bank in New York, REIT Analyst for BB&T Capital Markets in Washington D.C., and Options Strategy Consultant for multiple hedge funds.

Course Objectives

What You'll Learn:

Finding option prices and mastering implied volatility's impact on our trading edge.
Option probability basics including OTM, ITM and Prob. of Touch.
Historical volatility and the over-expectation of implied volatility long-term.
Fatal option pricing errors when trading credit spreads.

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