EQD Research

Using Volatility Expectations For Successful Option Trading

Sep 9, 2021

By Russell Rhoads,
head of research

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The Nasdaq-100 Volatility Index (VOLQ) is the primary indicator for 30-day expected volatility for the Nasdaq-100 (NDX). VOLQ has a calculation methodology that focuses on near at-the-money NDX option contracts resulting in a more accurate predictor of subsequent realized volatility than many other volatility indices. In this overview of VOLQ, we take a look at how VOLQ can be utilized to predict market moves as well as construct consistent trading systems to trade NDX option contracts. Finally, this paper highlights how VOLQ can be used over a wide variety of time frames to confirm a trend in NDX or indicate that a trend may be preparing to reverse direction.

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