Low IV options

[rapidex]

In regards to finding Low IV options, I use the optionetics site:
http://www.optionetics.com/market/rankers/default.asp?freeRanker=yhlrankperc

My question in regards to this concerns when you say a stock has Low IV options (like in above link) does that mean all options (calls and puts) for all strikes and all expiration months have Low IV?

Can a stock have both expensive and cheap options at the same moment in time (assuming the expiration months would be the differential).

Thanks.

 

[wayneL]

In regards to finding Low IV options, I use the optionetics site:
http://www.optionetics.com/market/rankers/default.asp?freeRanker=yhlrankperc

My question in regards to this concerns when you say a stock has Low IV options (like in above link) does that mean all options (calls and puts) for all strikes and all expiration months have Low IV?
Can a stock have both expensive and cheap options at the same moment in time (assuming the expiration months would be the differential).

Thanks.

The IV figures quoted on sites like the one above is an average of IV,s. It can be an average across strikes and expiries and one would need to find out for sure.

"My question in regards to this concerns when you say a stock has Low IV options (like in above link) does that mean all options (calls and puts) for all strikes and all expiration months have Low IV?" Relatively speaking yes. There is usually some sort of skew or smile, where away from the money strikes can be different than at the money strikes, and different expiries may have different IVs, but they will all be low relative to what they would be when expensive.

"Can a stock have both expensive and cheap options at the same moment in time (assuming the expiration months would be the differential)". Mmmmm. You would never get cheap and expensive at the same time, but you might get expensive and a lot more expensive (This is called time or strike skew) when there is some announcement (FDA or suchlike) due in the front months.

For instance the front month may have 170% ATM options and back months are at 80%, when normal IVs are circa 30%.

 

[rapidex]

Great - thanks Wayne.