Options Jive

Monday – Friday | 8:40 – 9:00a CT

Translating Stock Movement to Options

Options Jive

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Stock movement does not only affect the market capitalization of various companies, but it also affects the market for insurance on those stocks via options prices. This episode of Options Jive is centered around the relationship between stock movement and implied volatility movement.

Tom and Tony look at some historical representations of this relationship through daily movement in the S&P 500 (SPY) and how that movement correlated to daily movement in the S&P IV Index (VIX). After throwing out the extremely low IV year of 2017, the guys find that a 1% move in the stock market has often resulted in a 10% move in the market for options on stocks.

The segment above shows these historical relationships between stocks and implied volatility paired with great commentary from the experienced duo of Tom Sosnoff and Tony Batista.