OK, this is fine. I don't know how Bruno designed spreadsheet but BSM formula is used to calculate IV from given price or to calculate price and greeks when fed with IV number. Now, when you tested this, try to think about purpose of all this jazz. Why one wants to take the trouble at all?The goal was simply to see if the formula works by entering the IV and the result being the option price no more than that I am not planing on using it for any modeling or anything like that
I agree. The only thing is I'd use word 'understanding" instead of "command", or even "feel" would be better. This is what options trading is about (imo), "to be better prepared for the unknown". Plus you have to add arsenal of trades to take advantage of IV at hand and of greeks dynamics. I prefer that over "rules".if you have strong command over Greeks, you're in a better position to manage your positions well. That includes understanding interactions or cross derivatives like for instance how IV also impacts Delta.
Not sure if you read an article on Aeromir's main page by Joanna White about being part of trading group. There are so may directions trader can take that there is no way one person can sufficiently cover everything alone. Traders need to find his own trading way, his style. It's much easier to sort it out by hanging in proper environment. I agree with Bruno's conclusion about trading, but I took different path. Other way was chosen by Kevin Lee (machine learning) I also think this is not the right path and don't want to follow, but I can be wrong and want to hear from Kevin, from Bruno, from Ted, and other traders about their experience and how they go about improving trading results. Unfortunately Kevin disappeared from my radar.
That article says about building group in fashion of Mr Hill's Mastermind idea. Of course there should be group of people of similar interest. In our case this will be about trading options. Mr Hill, if I remember correctly, suggested that members of Mastermind group should contribute and also that each member should benefit from participation, not only via output of the group as a whole but on personal level ( I think Mr. Napoleon Hill suggested monetary incentives for each person).
I looked up few communities, admit - not to many, and most of them are in 'passive mode'. That means most of participants are in listening mode trying to learn as much as possible and are not willing to participate (by fear of asking stupid questions or not having enough time or not being interested). This is fine but I also understand that in this environment traders who can contribute or share their 'trading discoveries' are more and more reluctant in doing so when they get no responses, positive or negative, at all. As I remember old CD Forum was pretty good once, with a lot of knowledge pouring in from different directions. Now Aeromir with TG1 is, in my opinion, one of the best alternatives out there as a platform to exchange thoughts but still it is not horribly active.
I remember once there was 'Eagles' group out there. Wonder if it is still on? How it is doing... But this was private one constructed in Mastermind fashion (I suppose). Did time of public forums passed? Do you, gents, know of any other options trading forum which is more active, that is not guru dominated or focused on single strategy? Maybe private groups, a la Hill's Mastermind, is the way to go? Or, maybe, it is all about pure commerce now.
That said, I say 'thanks' to all active participants of TG1 and to Bruno and Tim and Himanshu add others who contribute to trading knowledge by sacrificing their effort and time.
Bruno, you lost meLet's say that you have that vol surface equation worked out, or you have a very comprehensive data set available in which case you only need local approximation to fill the gaps, that continuous non linear function IV(X,t) tells you what IV to use in volatility surface mode.