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> If you do that, then its just - you give me iv and underlying, i give you spot. But... what really happens (in my opinion) is... options makers or writers or

> If you do that, then its just - you give me iv and underlying, i give you spot. But... what really happens (in my opinion) is... options makers or writers or whatever might set a price based on what they feel is fair/good for them/whatever Then a bunch of people on Robinhood make memes over it, hammer the bid, IV goes to 160%, voila... Why does "spot" price matter in that equation? Robinhood buyers + supply/demand are what drives IV in reality I feel.

JumpCrisscross 3y ago
> options makers or writers or whatever might set a price based on what they feel is fair/good for them/whatever Former options market maker. We basically made money because of (a) people setting prices based on gut feel and (b) retail investors buying options for leverage and then forgetting to exercise barely in-the-money contracts. The first has largely left the market; fortunately, the second came in with gale force. > Robinhood buyers + supply/demand are what drives IV in reality Of course. Supply and demand drive price. Volatility is a measure on price. Options are principally an instrument for trading volatility.