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+Chapter 37: How VolatHity Afleds Popular Strategies 769 
+volatility decreases. Again, these statements may seem contrary to what one would 
+expect from a bullish call position. 
+Of course, it's highly unlikely that implied volatility would change much in the 
+course of just one day while the stock price remained unchanged. So, to get a bet­
+ter handle on what to expect, one really to needs to look at what might happen at 
+some future time (say a couple of weeks hence) at various stock prices. The graph 
+in Figure 37-3 begins the investigation of these more complex scenarios. 
+The profit curve shown in Figure 37-3 makes certain assumptions: (1) The bull 
+spread assumes the details in Assumption Set 1, above; (2) the spread was bought 
+with an implied volatility of 20% and remained at that level when the profit picture 
+above was drawn; and (3) 30 days have passed since the spread was bought. Under 
+these assumptions, the profit graph shows that the bull spread conforms quite well to 
+what one would expect; that is, the shape of this curve is pretty much like that of a 
+bull spread at expiration, although if you look closely you'll see that it doesn't widen 
+out to nearly its maximum gain or loss potential until the stock is well above llO or 
+below 90 the strike prices used in the spread. 
+Now observe what happens if one keeps all the other assumptions the same, 
+except one. In this case, assume implied volatility was 80% at purchase and remains 
+at 80% one month later. The comparison is shown in Figure 37-4. The 80% curve is 
+overlaid on top of the 20% curve shown earlier. The contrast is quite startling. 
+Instead of looking like a bull spread, the profit curve that uses 80% implied volatili-
+FIGURE 37-3. 
+Bull spread profit picture in 30 days, at 20% IV. 
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