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Lone Wolf

Understanding IVol of Futures Options

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Good Morning.

 

For Futures, I'd like to understand how the Implied Volatility (iVol) of a particular option chain relates to its underlying. Better to use an example:

 

I'd like to write puts on the Dec'13 Option Chain for Natural Gas (/NG). This particular Option Chain is associated to the December Contract (/NGZ3). Obviously, I'd like to time my short position with a high iVol, ideally after a peak has occurred.

 

My doubt is if the iVol associated with the Dec Options is tight with the specific Dec contract. One can tract the iVol for each specific contract and they all behave differently. I use ThinkOrSwim for this purpose. On the other hand, iVolatility.com provides a iVol index for the underlying as a whole. Which approach better reflects the iVol of the Option chain?

 

Thanks,

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