740 Part VI: Measuring and Trading Volatility 
FIGURE 36-5. 
Implied versus historical volatility of a stock. 
150 
140 
130 
120 
110 
100 
90 
80 
70 
60 
50 
40 
30 
20 
10 
oi--""""'""""',,,.....""' -10 
-20 
-30 "O 
-40 ct! 
-50 ~ 
-80 0. 
-701'-'-=CIJ+---+---+--+; 
-80 
1999 
FIGURE 36-6. 
Implied minus Actual 
The price graph of the stock. 
. . . 
•• , •••••••• ,. •••••••• .,. ••• + ••••••••••• ••••• -~······ •••••• ,. ••••••••••• ·t . ······ . . . ... [" 
·· · ·· ·· ··· ·· · · · Stock Price · ·· · : ·· ·· I 
~ !'"Y"d"'il~tilirrs::•of'T! 
' ' .· ............ ; ·--·•·····! ............ · ................ : ............... : ...........•.. :. 
············•·:••············•:•···········•;••·············(·········•: Implied Volatility 
98 0 N D J F M A M 99 
29.000 
27.000 
25.000 
23.000 
21.000 
19.000 
17.000 
15.000 
13.000 
11.000 
9.000 
7.000 
5.000 
Date