May 12, 2019

**Often investors notice that after an earnings
announcement a stock has the potential to move depending on the
news. But what type of volatility or movement was expected before
the announcement? Using implied volatility, we can look at how
option premiums are pricing in potential expected moves. Derek
Moore explains how the numbers work and how you can see what a one
standard deviation expected move is once you know where to find
implied volatilities of the underlying stock or index. **

- • What is the VIX Index
- • How does the VIX measure volatility via options premiums on the S&P 500 Index.
- • What is implied volatility or IV?
- • What does the implied volatility translate to regarding expected stock movement?
- • Formula using implied volatility to calculate expected single standard deviation ranges
- • Why does implied volatility rise sometimes prior to an earnings announcement?
- • What is the straddle option strategy?
- • Why long straddle options positions are a more complicated trade than you think.
- • How to calculate expected one standard deviation ranges for any number of days
- • What is the VIX futures curve?
- • Inverted VIX curve

**Mentioned in this Episode:**

VIX Futures Curve

CBOE VIX Explanation

Podcast on Inverted Yield Curve

What is the Yield Curve Inversion and Why People Care Podcast?