Historical volatility

Trading Discussion News and Economy
1

Hi, first of all - sorry if posting in the wrong section, I couldn’t find one that seemed to match perfectly my question. (Hope admin will move to appropriate section, if it is there, rather than delete)

Basically, I would like to ask exactly what it means when a currency cross (I am interested in options) has a historical volatility of, say, 10%. I understand that the 10% is the volatility expressed in annual terms, and that it represents a one standard deviation move. Also, I understand that one standard deviation represents two thirds (approximately) of all occurences, but - but then my question is - what does that mean exactly?

Will it mean that Currency cross X, at the beginning of the year is trading at 100, will, in two thirds of the cases, stay between [U][B]90 and 110[/B][/U]? Or will it, in two thirds of the cases, stay between [B][U][U][I]95 and 105?[/I][/U][/U][/B] Or none of the above?

This is basically my doubt.

2

I believe that you’re correct in that it would move 10% up or down in about 70% of cases, eg between 90-110.

However, I’m absolutely not a reliable source on this, my guess is no better informed than yours.

Trevligt att se en nordbo h�r f�rresten. God jul fr�n Sk�ne!:slight_smile:

3

keep in mind we�re facing crisis times and most of the times markets shows unusual comportments. Actually I�m really careful about how much and where I should invest. Gabby

4

Not only the crisis, but the holidays are also a bummer, forexwise.

5

I understand that in current volatile scenario, is not that insane to trade options. Some option traders have told me about them taking advantage of this situation. I am also a beginner trading options; I am just trading vanilla options using Core Options I hope I don’t lose my premium.

6

I wouldn�t be trading Gold option right now, there seems to be a shortage in supply and the prices may be backwarded for a while.

7

I thought the Gold market would be roaring during this season.

8

I�d like to know if going into the options, is going over Forex. I don�t know what else than currencies may we trade in forex platforms as mt4? Should I use more platforms? Adrian

9

Well basically MT4 only allows you to trade currency pairs, though you can also trade currency options and even other options like gold. You can also trade features and comodities, though if you’re looking to invest on other trading ways I highly recommend vanilla options, they are easier to trade and you can trade them with core view.

10

As far as I knew MT4 is a Forex platform, maybe you got a little confused here. You mentioned Core View, that�s the one you use to trade Options, is the same Core Options but I guess the brokers can re-name the platforms they run, Tradeview in this case.

11

I am sorry, I missed a couple of words there. Thanks for clarifying it.

12

So what you mean is that Core it�s a tool for the MT4 or is a different kind of platform, If it is a different one which are the differences between them?, I got more confused in here, sorry. :slight_smile:

13

I think I got it then. Anyway it�d be enough for me trading currencies; maybe soon it�ll be also useful getting involved in more markets like the ones you�re saying. Then it is important start trading with brokers offering more than currencies. So in Core View from Tradeviewforex� broker, what else can be traded? Is that in the Fx market?