Mike And His Whiteboard

Options | Standard Deviation

Mike And His Whiteboard

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Standard deviation is the distribution of occurrences around a given mean.

In options trading, we use standard deviation to give ourselves a visual representation of implied volatility.

We also use SD to help us determine where our strikes should be for things like 1SD strangles.

Tune in to learn all about standard deviation and be sure to save the "cheat sheet" slide found in the bottom right corner just below the video player!

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