Description
Actual Implied is the calculated At-the-money implied volatility given the various strike prices. Call and put implied gives the current market implied volatility for each individual contract using the mid price.
*DISCLAIMER: THIS IS THE OPINION OF THE WRITER AND NOT A RECOMMENDATION OR OFFER OF SERVICE OF ANY KIND TO THE READER. IT SERVES AS AN EDUCATIONAL TOOL ONLY*
Purpose
Allows the investor to see what option contracts are missed priced due to implied volatility. Knowing this, the investor can make a delta neutral trade that is either Long or Short volatility. As the volatility begins to correct itself, regardless of underlying movement, the trade will become profitable as long as the overall position remains delta neutral.