Understanding and Utilizing Implied Volatility (IV): This video focuses on how to find stocks with high options implied volatility using the Mark Chameleon platform. It explains the concept of IV and its importance in options trading, emphasizing relative IV (IV percentile rank) over absolute IV values.
Screening and Filtering Stocks: Dimitry demonstrates how to use the platform's various filters and screening tools to narrow down the list of stocks based on desired criteria, such as IV percentile rank, market cap, upcoming events (like earnings), and options volume.
Combining Multiple Filters: The video showcases the power of combining multiple filters, including using a separate stock screener to add additional criteria, ultimately creating a highly targeted list of potential stocks for analysis.
Key Ideas and Facts:
IV Percentile Rank: This metric shows the percentage of historical observations where IV was lower than the current value, providing context for how high the current IV is relative to its historical range.
"The higher this is [IV percentile rank], that means that the higher the current implied volatility is relative to its historical observations." - Dmitry
Impact of Upcoming Events: Stocks with upcoming events, such as earnings releases, tend to have higher IV due to increased uncertainty and potential for price movement.
"Stocks that have upcoming events will have potentially higher buy volatility to compensate for that to account for those events." - Dmitry
Open Interest Percentile Rank: Similar to IV percentile rank, this metric shows the percentage of historical days where open interest was lower than the current level. High open interest can indicate a buildup of positions and contribute to elevated IV.
Stock Screener Functionality: The platform allows users to save custom screens with specific criteria, making it easy to apply these filters to the IV rankings report and refine the search further.
Importance of Relative Metrics: The emphasis is placed on analyzing IV and open interest in a relative context (percentile ranks) rather than focusing solely on absolute values.
Actionable Insights:
Identify potential trading opportunities: By understanding IV and using the filtering techniques outlined in the video, traders can identify stocks with high IV and potentially capitalize on price movements.
Manage risk: The video highlights the importance of considering upcoming events and open interest when analyzing IV, allowing traders to better assess risk and make informed decisions.
Utilize advanced screening tools: Traders can leverage the platform's stock screener and filtering options to create highly customized searches based on their specific trading strategies and preferences.
Overall, the video provides valuable insights into using IV as a key metric for finding potential trading opportunities in the options market. The demonstration of the Mark Chameleon platform highlights its powerful screening and filtering capabilities, allowing traders to effectively identify and analyze stocks with high options implied volatility.
