FAQ: The Line in the Sand Between Implied and Delivered Volatility
See how professional traders evaluate option pricing without labeling contracts as overpriced or underpriced. OIC instructor Mat Cashman reframes the question around forward-looking implied volatility and backward-looking delivered volatility, and explains where relative-value traders perceive their edge.
0:00 Can Rule of 16 Identify Overpriced Options?
0:24 Implied Vol Is Never Wrong or Right
0:44 Forecasted vs. Delivered Movement
1:14 Optionality Underperformed Expectations
1:44 Optionality Outperformed Expectations
2:18 Implied Vol Forward vs. Delivered Vol Backward
3:29 Stock Delivering 70, Options Priced 55
4:10 Comparing Expected to Actual Movement
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