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I have noticed a few posts recently suggesting that the Metastock Option
Volatility indicator plots implied volatility. I suggest a little caution
here. There is not sufficient data in stock end-of-day prices to calculate
the implied volatility of the options on that stock. In order to do that,
you would require the option prices for the complete chain. Also, bear in
mind that options for different strike prices may well have different
implied volatilities. Sometimes the difference is quite marked.
The Option Volatility indicator can only be based upon some kind of
historical volatility formula. Therefore, if you are comparing this to,
say, the Fishback historical volatility indicator, which is based upon a
linear regression calculation, you are comparing like to like and it will
be of no use to you for options trading.
In order to see 'historical' implied volatility, you will need to access a
website that has all of that data stored. I think that OptionsXpress will
let you chart 'historical' IV on particular stocks for free.
Regards,
Kevin
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