Volcone Options Implied Volatility Analyzer

The volcone analyzer from options university provides a graphical display that allows the trader to immediately determine if a particular option is cheap to buy or simply too expensive. The volcone software analyzes historical implied volatility data of the option's underlying security. It then crunches the numbers and outputs a set of plots to show historical volatility levels with respect to the time-to-expiration. Along with the plots, it highlights the exact location of the stock option of-interest to let the trader know if the option is at a good buy point or is over-valued.

If the location of the option is above the cone-shaped plots then there is too much implied volatility in the existing option, which translates to the option being over-valued. Thus, the option is not at a good buy entry. However, if the option is positioned below the graphical cones, then the existing option is cheaper than historical trading periods and thus, is a good buy entry candidate.

Option University's Volcone options trading software is focused only on the volatility index. It is a good tool to complement charting tools to find the best possible entry and exit positions. With the volcone analyzer, the trader can quickly and easily determine where an option is trading (in terms of price) as compared to where it should be trading. As the name suggest, volcone stands for volatility cone. The graphical display of the cones provides an immediate feedback to the trader to allow real-time trading.