There are three key ways to use the Volatility Dashboard to improve your trading approach. We believe our tools will empower you to better:

• Understand Market Sentiment
• Identify Options Mispricing
• Assess Market Extremes

First, to get a sense of Market Sentiment, the Fixed Strike Matrix reveals how implied volatility is reflected right now versus previous time periods. Red cells indicate lower implied volatility, and therefore, cheaper options prices.

During these scenarios, you may want to also consider buying calls for upside leverage or puts for cheap downside protection. Alternatively, when you see green this indicates higher volatility and more expensive options prices.

Next, traders use the Dashboard to identify Options Mispricing. After scanning the green and red sections, you can click the Show Highlights toggle within the settings function to show where current market mispricing reflects higher or lower IV for a cell compared to its neighbor in real time.

As a confirmational tool, you can then flip over to the Term Structure Tab and compare today’s volatility to both its recent extremes, within the 10%-90% cone, and its historical volatility within the compare mode.

The third way we want to highlight how to use the Implied Volatility Dashboard to assess Market Extremes. Using our Volatility Skew tab, you can see how major indices or specific names of interest are pricing the chance of a larger move. When you see the skew graph indicating more risk to one side, this may be a time to watch your tail risk to the upside.

Additionally, using Fixed Strike within our compare mode can show you at which strikes traders have been paying relatively higher prices for calls or puts.