Volatility “Sweet Spot”
Securities are ranked on this page according to their forward-looking volatility from last year. Traders seeking safer investments—at least those expected to move less—might lean toward the exchange-traded funds (ETFs) and stocks near the bottom.
Options traders looking to add a bit more volatility should consider the symbols or sectors near the top of the list because they have the biggest expected price movements. Options from the top of the list are also the most expensive and have a slightly greater possibility of having the largest understatement of movement. That means it’s possible to make the most money by selling options in this category.
Routinely, Oil Services (OIH) ranked among the most volatile sectors, and high volatility engenders high levels of fear. Utilities (XLU), Consumer Staples (XLP) and Health Care (XLV) ranked among the least volatile sectors, with the lowest levels of fear. Consider volatility before taking the plunge.
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Michael Rechenthin, Ph.D. (aka “Dr. Data”) heads research and data science at tastytrade. @mrechenthin
