Anthony comes out of the chutes strong today, and delivers an Oreo treat to Dr. Jim to kick things off. Then, Dr. Jim introduces Anthony to a brand new term to add to his vocabulary - Volatility Mean Reversion. This basically states that volatility has a propensity to return back to its average (or 'mean') over some period of time. In other words, when volatility has been rising, we expect the likelihood that it might fall to increase, and vice versa.
Anthony then uses this new concept, alongside what he learned last week about volatility and option prices, to begin to build out a game plan for how to select strategies using volatility's relative level.
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