Weekly IV Structure: The Levels That Matter — Transcript

Full transcript

1. 0:12Hi everybody. So, in today's video, I'm
2. 0:15going to be walking through exactly how
3. 0:18weekly stock IV is derived using the
4. 0:20spread monster and we'll cover the
5. 0:23methodology used to identify IV balls,
6. 0:26IV peak zones, and how to choose the
7. 0:28correct data set and the proper settings
8. 0:31to derive the IV data and how to
9. 0:35actually interpret the resulting
10. 0:37structure.
11. 0:38So, let's move on. So, this is your
12. 0:40fractals right here. You need to right
13. 0:43click and go to the spread monster.
14. 0:47And here you will see the option of
15. 0:49forward-looking aggregations. Now here,
16. 0:52first of all, you need to select 5 days
17. 0:55looking forward. And the reason behind
18. 0:58that is that we are deriving the weekly
19. 1:01IV. It means that we are deriving for
20. 1:03the next 5 days. We are deriving the IV
21. 1:05data for the next 5 days. And let's say
22. 1:09you have a holiday market holiday in a
23. 1:13week. You have one holiday in the whole
24. 1:155 days working. So, for that, you need
25. 1:18to actually select 4 days
26. 1:20forward-looking. For example, on 25th,
27. 1:23we actually have holiday on Monday. When
28. 1:26I'll be deriving the weekly stock IV or
29. 1:28weekly data
30. 1:30for the IV balls and the IV peaks, I'll
31. 1:32be choosing 4 days forward so that I can
32. 1:35actually get the data from Tuesday to
33. 1:37Friday for the IV. And here, now you
34. 1:41need to select the expiry of Friday. And
35. 1:45where will that be? That'll be 22nd of
36. 1:48May. I'll click on that. So, here I have
37. 1:51loaded the
38. 1:53basically the IV data for
39. 1:56the whole week. I right click and here I
40. 1:59should be seeing the option of view
41. 2:01density graph. Now, here you will see
42. 2:04the IV data that we are going to derive.
43. 2:07So, let's move on to the derivation.
44. 2:10But before that, I've actually thought
45. 2:12that how you're basically supposed to
46. 2:14derive the IV walls in general and what
47. 2:17do the IV walls mean and how do they
48. 2:19work and how is one supposed to, you
49. 2:21know, look for setups. And this was
50. 2:24already explained in a video that I has
51. 2:26been uploaded on the channel. You can
52. 2:28check it out. I'm also going to link
53. 2:30that in the description. I highly,
54. 2:32highly suggest every single person
55. 2:35watching this video, if they haven't
56. 2:36watched that one, to please watch that
57. 2:39first if you want proper clarity about
58. 2:41the IV data because this video is
59. 2:44actually the next part of that video.
60. 2:46So, it did not make sense to you if
61. 2:48you're watching this video first. So,
62. 2:50please, it is a big request to everyone
63. 2:52to first of all watch that one. Thank
64. 2:54you so much.
65. 2:56So, here we have the IV data loaded. So,
66. 2:59let's get to the derivation. Before
67. 3:01deriving anything, the display setup
68. 3:05matters. I have said this in the
69. 3:07previous video, too. I use a 4K monitor
70. 3:09for this process because higher pixel
71. 3:12density gives me a significantly cleaner
72. 3:15visual.
73. 3:16And by default, as you know, that
74. 3:18Windows often scales the 4K displays to
75. 3:21150%, which makes the interface elements
76. 3:24larger because of the the monitor is 32
77. 3:27inches or even bigger than that, but it
78. 3:30reduces the usable detail and we need
79. 3:33detail in deriving the IV.
80. 3:36So, therefore, I reduce the scaling to
81. 3:38100% that gives me a finer granularity
82. 3:42to the IV curve and that is really
83. 3:45helpful. And inside the spread monster,
84. 3:48I maximize the density chart and resize
85. 3:51the fractal to fit the screen. You can
86. 3:53see it right here. You can absolutely do
87. 3:56this on a 1080p normal monitor or even a
88. 3:591440p monitor, but 4K makes precision
89. 4:03noticeably easier and it you will see
90. 4:05the difference yourself. Me just telling
91. 4:08you that I see it more clearly won't
92. 4:10make sense. So, if you don't try it on
93. 4:12your own on your 4K monitor, it won't
94. 4:14make any sense. So, first of all, I'm
95. 4:17going to be deriving the IV wall for the
96. 4:21upside and I noticeably see that the
97. 4:25start of the IV region is somewhere
98. 4:28right here. Okay. So, here I can
99. 4:31actually see that this is the start of
100. 4:33my IV region because there's this one
101. 4:36pixel gap between the peak of the IV
102. 4:39curve and my cursor. And the next one is
103. 4:43basically the IV wall and it's somewhere
104. 4:47right here
105. 4:48for me. And that is the true IV wall and
106. 4:51this one right here is the IV order
107. 4:54flow, basically the outlier level for
108. 4:57us. And this is These are like really
109. 5:00important levels. This is a strong
110. 5:02resistance. If you watched the video
111. 5:04earlier, you do understand how these
112. 5:06actually work. And I'm going to be now
113. 5:08deriving for the downside. I think so if
114. 5:11I do a rough guess, I mean, it's
115. 5:15somewhere around in this region, but I
116. 5:19don't know which one of them. But let's
117. 5:21try with this one. Okay, I'm going to
118. 5:23keep my cursor right here and let's see
119. 5:25that how much of a pixel gap do we
120. 5:27actually get. So, oh, perfect. So, this
121. 5:30is the start of the IV region. And the
122. 5:32next one I know is going to be the IV
123. 5:34wall, exactly. And if I keep my cursor
124. 5:36right here, I think so this should be
125. 5:40the IV wall. Yeah, just about that and
126. 5:43this one should be the IV order flow
127. 5:47region, the outlier one.
128. 5:50And this should be it.
129. 5:52So, basically now we have the levels for
130. 5:55both the upside IV and the downside IV,
131. 5:58and these are the levels that we
132. 6:00derived. Basically, you can see the
133. 6:01crosshair price right here. So,
134. 6:03basically this is the price for the
135. 6:05IV order flow for the downside. Okay?
136. 6:09So, now let's derive the IV peak.
137. 6:13And the IV peak will be right here. It
138. 6:16is the local maximum
139. 6:18as I've already mentioned in the
140. 6:20previous video. So,
141. 6:22for more precision, I'm going to zoom in
142. 6:24right here. Now, how I'm going to do
143. 6:27that is that Windows, and you have to
144. 6:29click on the plus icon.
145. 6:31So, basically it's going to zoom in for
146. 6:33me, and it's going to give me
147. 6:36Yep. So, it's going to give me a more
148. 6:39clearer picture for my levels. You can
149. 6:42do same for the derivation of the IV
150. 6:45walls, and same for the derivation of
151. 6:47the IV peak.
152. 6:49And now for the derivation of the
153. 6:51downside IV peak, which will be
154. 6:55right here. This is the most dense local
155. 6:59maximum. So, this right here will be my
156. 7:03IV peak. Now, I'm going to do Windows
157. 7:06and minus.
158. 7:07Basically, it's going to zoom out, and
159. 7:09the IV peak price for me it's 734.66.
160. 7:14Remember, this is spy, not QQQ. So, I'm
161. 7:17deriving IV for spy. And now one last
162. 7:19thing. One last thing is that before I
163. 7:22just end this video, I want to talk
164. 7:25about the usable, you know, count, or I
165. 7:28should say a number of days to load. So,
166. 7:31there's not a hard rule for deriving the
167. 7:34IV wall or the IV peak.
168. 7:37For there's no hard rule for the count.
169. 7:39I used to think of it this way, but it's
170. 7:42typically more you have to start with
171. 7:44200 days to load.
172. 7:46And it's a practical baseline. It's not
173. 7:48because 200 days to load is all always
174. 7:51correct, but the real priority is that
175. 7:54whether the IV curve you're looking at
176. 7:57is measurable or not. Sometimes these IV
177. 8:00curves goes above the whole density
178. 8:02chart, like same for the downside. So,
179. 8:04that means that the count or I should
180. 8:07say days to load is less. So, I'll move
181. 8:10to 500 days to load or I'll move to 250
182. 8:12days to load. And
183. 8:14for example, in some situations I see a
184. 8:172 h 8 h 7. And in those conditions, I
185. 8:21might have to load above 1,000 days, but
186. 8:23I won't do that. But, I'd rather change
187. 8:26my setting to weekday matching right
188. 8:28here. But, right now because I'm able to
189. 8:31derive my IV data with just 200 days to
190. 8:33load on spy,
191. 8:34I won't do it. And we have talked about
192. 8:37the derivation of the IV peak and the IV
193. 8:39ball. So, I don't think there's anything
194. 8:41left to do for this video. So, if you
195. 8:43have any kind of questions, please DM
196. 8:46the mods. And you can also DM me for
197. 8:48questions. And if you have any kind of
198. 8:50feedback for us, please comment. Thank
199. 8:53you so much for watching. Have a really
200. 8:55nice day ahead.
201. 9:08>> [snorts]