The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about why you cannot predict implied volatility. This actually came from a question from a user. He basically sent me a message through Facebook and they said, “Kirk, can you actually predict where implied volatility is going to go?” And I thought to myself – It’s an interesting question, but the answer is you cannot predict where implied volatility is going to go because implied volatility is the prediction itself. The fact that market participants, you, me and everybody else out there that’s trading options and buying and selling underlying securities are actively engaging in the market therefore creates a prediction based on our actions of where we think the market’s going to go, but that is the essence of what implied volatility is, an estimation, an assumption of where the volatility is or how volatile a stock will be moving forward into the future. I think their question wasn’t ne