@deltatrendtrading: Option-implied PDFs just use option prices and some relatively basic math to derive the probability density that aligns with their premiums. They use the fact that options with different strike prices generally vary in implied volatility to determine what price ranges the market suggests are of higher probability, and which ranges are suggested to be of lower probability. There’s a lot of interesting research into whether these PDFs are able to foreshadow market moves, or if they actually just indicate a self-fulfilling prophecy: investors who have directional sentiments buy options and stock, simultaneously foreshadowing and creating a market move. . . . . . . #finance #education #financialliteracy #trading #stocks #stockmarket #optionstrading #optionstrader #forex #futures