Technical Analysis Using Options Data

Summary

This article discusses technical analysis using options data, specifically the implied volatility of the SPY and its relationship with the stock price. ORATS provides a VIX-like reading for each symbol on the US equity options market, as well as put-call strike skew and term structure readings. Interested readers can sign up for a key at

SPY stock price on top of implied and realized volatilities. Do you see any patterns?

Implied volatility of the SPY, much like the VIX, normally rises as the SPY price falls. In times of calm, when volatility is flat or falling, stocks tend to rise.

ORATS provides this type of VIX-like reading for each symbol on the US equity options market.

Other important indicators are put-call strike skew and term structure readings.

Options 101: Implied Volatility Calculation And Uses

Options pricing models produce theoretical values for options and implied volatilities. Here we show common methods for calculating IV and how to interpret them.

Market Looks To Firm Up According To Implied Volatility Indicators

Implied volatility, contango, and forward volatility can be used to predict underlying movement. Ex-earnings IV for stocks is explained. Backwardation is described as is the flat volatility method.

Earnings Crush Implied Volatility

The fall of implied volatility after earnings is the earnings crush.