Price Cones

Price Cones are an integration of price data and volatility data to illustrate the market’s perception of a financial instrument’s likely future price range over the next 30 days. This feature is available only to Diamond users. You can upgrade your membership to get immediate access by clicking here.  To display price cones, choose this menu item:

When you choose to show price cones, all of the charts for which we have volatility data will be augmented with a price cone at its terminus illustrating, based on implied volatility, the prospective price range (based on one degree of standard deviation) over the next 30 days. Here, for instance, is the SPY:

As with drawn objects in SlopeCharts, you can point to the price cone to get very specific data about what it is expressing:

Besides the placement and size of the cone, and the tool tip data, there is another element of expression, which is the color itself. The greener the cone is, the more subdued its IV Rank. The more red a cone is, the more “red hot” the IV Rank is. For example, if I look at a crazy stock like AMD, the price cone is bright red:

Likewise, looking at another semiconductor company (Micron), we see a red price cone. Mousing over the cone itself, we can see that the IV Rank is a sky-high 95.24.

The beauty of the price cone is that it is, by definition, a context-sensitive representation. You can witness directly on an given chart, based on that instrument’s own implied volatility, a representation of the market’s agreed-upon price projection with far more richness and clarity than a raw number could ever provide, which is particularly valuable for options traders.