Standard Deviation

The calculation of standard deviation will vary depending on the method of implimentation. The statistician has discretion to specify the pattern of distribution and "degrees of freedom" for the underlying data. US futures and futures options calculations have typically used standard deviation calculations based on a normal data distribution and zero degrees of freedom. This gives tight correlation between implied and historical volatility, and will produce narrower support and resistance channels for futures studies which use standard deviation and variance in their formulas.

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