Options in 3D

Randall Liss discusses the different dimensions of trading options: direction, time and velocity.
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In this video, Randall Liss breaks down the three primary components of options value: direction, time, and velocity. Direction refers to the direction the stock price moves. People often forget that sideways is a direction, and there are options strategies to take advantage of anticipated sideways movements, in addition to up and down moves. Time refers to when the development in the stock will occur. Velocity refers to the speed of the anticipated move. Increased velocity creates higher implied volatilities, thus increasing option prices. All three of these are critical considerations when evaluating potential options trades. For deeper tutorials and daily market commentary, check out Randall Liss’s website at http://www.thelissreport.com.