Options traders need to analyze volatility to determine prices, and those who are familiar with volatility analysis will know it is no easy task. A visit to IVolatility.com will be of great value to those who prefer not to perform the complex calculations involved.
FIGURE 1: IVOLATILITY.COM. This Website contains volatility data for all optionable stocks in the US.
At IVolatility.com, you can find volatility data for all optionable stocks in the US. After each trading day, the data is scanned and the top results displayed on the homepage (Figure 1). You see the five top stocks and the five bottom ones, ranked based on a number of measures such as the implied volatility (IV) mean versus the 30-day historical volatility (HV), the IV index mean range, stocks with the greatest IV change since yesterday, and the volatility skew.
The mining and filtering technology behind IVolatility has been developed by EGAR Technology. A click on any of the symbols will display a chart of the underlying stock as well as volatility data. Price and volatility charts are also displayed. These charts can be enlarged in a separate browser window.
The features available include options analysis (which lets you view a complete options analysis of any stock), data for historical volatility, implied volatility, and a historical 30-day correlation against the Standard & Poor's 500, and options data for both puts and calls.
FIGURE 2: VOLATILITY RANKER. This feature ranks stocks based on implied volatility index, historical volatility, call/put index ratio, and correlation.
The volatility ranker (Figure 2) ranks stocks based on the implied volatility index, historical volatility, call/put index ratio, and correlation. Scans can be grouped by top 200 options volume, top 200 options open interest, Dow Jones Industrial Average (DJIA) stocks, S&P 500 stocks, Nasdaq 100 stocks, European stocks, and Japanese stocks. European and Japanese stock information is only available to those who have subscribed to the service at $9.95 per month.
The option calculator automatically plugs in the previous day's closing stock price, the at-the-money strike, the nearest expiration month, number of days to expiration, dividends if applicable, the appropriate interest rate and the implied volatility, and determines put and call option values and all the greeks. All you have to do is enter the stock symbol. You can go back and adjust any of the input variables and recalculate, as well as choose between American and European option styles.
Other features include a forum for registered users and a commentary section, which includes articles analyzing current market conditions.
Interested users should register to gain full access to the site. Ivolatility does not redistribute any of your information, so you will not get bombarded with e-spam mail, and the basic features of the site are free. Only subscribers to the advanced features such as data download and special filtering tools are charged for access. Subscribers simply select which services they want. Fees range from $9.95 to $39.95.
Overall, there is a wealth of option volatility information available on IVolatility.com. It is easy to use and contains useful, detailed information that is free of charge, and there's even more information for the taking if you're willing to subscribe. Overall, the Website's worth a look.-- Jayanthi Gopalakrishnan Technical Editor
Stockscores.com is a Website designed for those who want to have a technical guide but not necessarily get involved with technical analysis. The site provides a stock with a score based on technical indicators and allows the user to screen stocks in accordance with 30-plus indicators, including the stock score. The 30 indicators are used to produce the score.
FIGURE 3: HOME PAGE. Why bother with the details? Stockscores can summarize 30 indicators in one score.
You're greeted with a home page (Figure 3), a graphic of the highest-scoring stock sorted by price volume (price multipled by volume), a price history chart, and the 10 most active stocks in the NYSE, Nasdaq, OTCBB, TSE, and CDNX.
You then enter virtually any symbol from a range of markets and get either a quick report or a full one. The quick report provides summary information and a price chart for which the user is limited to specifying two simple moving averages. The full report covers all the indicators, and for some includes a color scheme and arrow to indicate degrees of bullishness or bearishness.
The stock score is calculated with a proprietary model and ranges from zero to 100, with zero being very bearish and 100 being very bullish. I asked Stockscores to provide score histories for 10 securities. In response, Stockscores provided me with scores for all 10 from May 30 through October 18 and included a 10-day exponential moving average of the scores to dampen the ups and downs. Using the scores as buy and sell signals didn't work well, especially with sell signals coming a bit late.
However, if the Stockscores history is treated as trend -- with increasing scores indicating bullishness, scores staying in a range as a continuation of bullishness or bearishness, and decreasing scores indicating bearishness -- then better, if mixed, results came up.
FIGURE 4: YAHOO. Stockscores is bullish just before YHOO starts its dive.
As an example, Yahoo! is in a consolidation pattern for the first two-thirds of the top chart in Figure 4 and then price starts down. Stockscores is still bullish (point A). A sell signal is finally generated as Yahoo! goes down to 122.
FIGURE 5: BOEING. BA's strength is reflected in a consistently strong scoring.
Boeing, on the other hand, is a stock that has shown strength since May 30, 2000 (Figure 5). Stockscores reflects overall strength by having a moving average of the scores that stays in a high range. Stockscores is considering making the score history available to users. This may help users, but still leaves the question of what the score is and how reliable it is.
Stockscore provides screening across a range of indices, both American and Canadian (AMEX, CDV, CDNX, MSE, Nasdaq, NYSE, OTCBB, and TSE). Most indicators are predefined. Three interesting screening items are abnormal activity, consolidations, and gaps. The screening techniques are proprietary.
Stockscores' gap search does just fine, and given the breadth of markets covered, could be reason enough to visit this site.
Besides screening, Stockscores also scores sectors. The Dow Jones industrial, transportation, and utilities averages are given, as well as those in the Nasdaq 100 and 19 US indices plus a number of Canadian indices.
This site has some useful features, but is the score relevant? What has the screening really produced? For users to make use of the scores, they need knowledge of technical analysis, but this is what the site is trying to avoid. Plus, since all the scoring is proprietary, none of the work can be checked. In all, it will take a couple of years to see if this black box can be profitable.--Dennis D. Peterson Staff Writer
Originally published in the January 2001 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2000, Technical Analysis, Inc.
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