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I have a small IRA that I've used for strategy "testing" for a long time. I guess that's a way of saying I don't want to keep score in my primary account. Nevertheless, I'm usually just forward testing rules and adjustments that I'm thinking about bringing to the main account. The Butterfly...

You're right that a decline in VIX should help your XIV position, but probably not in the way you expect. @traderlux has it right. Because the volatility products hold and roll futures contracts, they benefit or get hurt from the structure of the futures. Right now the term structure of the...

I think there are quite a few variables that make answering your question a little complicated. For example, if you "100% know" the market will go up the position you would want to construct would be very different than if you "50% know" the market will go up. In the former case, a negative...

Your math looks accurate to me. A few years ago I was looking at the expected payout on a credit spread and noticed the same thing, that the expected payout is zero before commissions. Essentially, if we're just using straight probabilities we can expect to pay commission by trading credit...