The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “Does implied volatility matter for option spreads?” Again, this is a user member submitted question. If you have a question you want to get answered on the podcast here on the daily call, please let me know. Shoot me an email, send me a Tweet. Go over to optionalpha.com/ask, do whatever you need to do to get that question in. The question that somebody asked is, “If you are only doing calls or puts and not spreads, it looks like implied volatility is a good idea and you should base trades off of that. But in a spread, since we’re buying and selling an option, one cancels the other out. And what I meant is that if implied volatility or IV rank is high and options are expensive, well, you're buying an expensive option and you’re selling an expensive option. Why does it matter?” And this is a great question, I think a question that most of the time comes up when people really st