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An Increase in Uncertainty Results in a Higher Implied Standard

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An increase in uncertainty results in a higher implied standard deviation for the stock, which means that the writer of an option requires a higher premium to compensate for the anticipated increase in the stock's volatility. ​


Definitions:

Panic Disorders

A type of anxiety disorder characterized by sudden and repeated bouts of intense fear accompanied by physical symptoms.

Cognitive Therapy

A type of psychotherapy that emphasizes identifying and correcting distorted thoughts and beliefs to effect positive change in behavior and emotions.

Systematic Desensitization

A behavioral therapy technique used to help individuals overcome phobias and anxiety disorders, involving gradual exposure to the feared object or context.

Therapeutic Services

Professional services aimed at providing treatment and support for physical, mental, and emotional health issues, fostering healing and well-being.

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