Dan Passarelli, CEO - Market Taker Mentoring 

Have you ever wondered how the best traders get to that point? Is there something special in their trading methodology? Actually, there is. In fact, in my nearly 30 years in option trading, I've discovered that all the top traders in the world to this one thing. I want to share it with you in this video.

And it's fairly simple. In fact anyone can do it. It centers around your trading plan, particularly your trade exit strategy. Great traders know their exits at the time they enter a trade into a trading platform.

Dan Passarelli, CEO - Market Taker Mentoring 

I talk to a lot of option traders. And many of them talk about using implied volatility to predict future movement of a stock. But what does implied volatility really predict?

I've found a great deal of misunderstanding about option volatility and how it is used. So I made this video to explain exactly what historical volatility and implied volatility are, what they can be used for, and their limitations.

Dan Passarelli, CEO - Market Taker Mentoring 

Relative implied volatility and option pricing are key to successful option trading strategies. When implied volatility is in the top half of the 6-month range, it's thought to be a high volatility scenario. That is one indication of over priced options, meaning it's better to sell options.

If implied volatility is in the bottom half of the 6-month range, that is a low volatility scenario. That's one indication of underpriced options, meaning it's better to buy options.

Dan Passarelli, CEO - Market Taker Mentoring

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Dan Passarelli, CEO - Market Taker Mentoring 

All option traders make or lose money based on changes in implied volatility (IV). But IV is an often misunderstood concept. Traders who look at IV and the vega position of their trades end up being more successful traders. This video explains why option vega is so important.

Implied volatility is basically the supply and demand component of option prices. For example if a big trader buys thousands of a certain call, the price will go up, even if the underlying stock does not. That is the effect of implied volatility. Vega measures the effect of this on the price of the individual option.

Dan Passarelli, CEO - Market Taker Mentoring 

People often ask why option theta is an important Greek. And it's because every option position makes or loses money as a result of time passing. That means, smart traders will want to measure it. If a trader knows how much he or she makes or loses as a result of time passing each day that trader will make more money.

This video discusses how to use the option greek theta when buying calls, selling option credit spreads and really any other options strategy you could use.