How to Chart Volatility for Stock Options

Chart volatility for stock options using the Volatility Charts software available online with TradeKing. This stock options website features stock option analysis software in addition to broker access to stock option contracts. The charting features are free upon sign-up. The Volatility Charts let you graphically display discrepancies between a stock's historical volatility and implied volatility, which are the two key measures of volatility when analyzing stock options. Historical volatility is an analysis of a stock's prior price fluctuations. Implied volatility shows how option prices reflect what market participants expect of the stock's future volatility. These Volatility Charts are easy to access after entering the ticker symbol for the stock.
Create a 'SpreadHacker' chart using the ThinkOrSwim software platform. This software is free after registration and includes many analytical features for researching stock options. The SpreadHacker tool calculates implied volatility, and optionally combines this information with other stock option characteristics, such as strategy probability and real-time price analysis. You can then use this information to find a stock option trading position that suits your investment goals. Hundreds of different stock options trade on most stocks. SpreadHacker lets you categorize the options based on their implied volatility so you can study the possibilities more quickly.
Download the free Stock Volatility Calculator software for Excel. This spreadsheet application includes pre-written formulas to calculate a stock's historical and realized volatility, as well as statistical deviations of the stock's price movements. Unlike more comprehensive software, this program does not incorporate this information into a dedicated interface for stock option analysis. Thus, this program is best suited for veteran traders with a strong knowledge of option behavior. Experts can make informed decisions based solely on these raw calculations and will know how to use this program's data with other software to find good stock option strategies.