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Klurby, prior to your next vix trade I suggest you watch this video explaining some vix basics, http://masteroptions.com/?p=82 It's been made available by an incredibly benevolent soul at no charge just for vix newbies like you. Really!

The appropriate way to assess IV is to measure it individually and separately at each strike, in each month. Keep doing so and playable anomalies will occasionally reveal themselves. If atm option iv doesn't change but the skew becomes steeper than it's ever been - then think about selling the...

Yes, the delta is often used as a proxy for the likelihood of an option expiring in the money. But an option with a delta of 1 - virtual certainty that it will expire ITM - has time value of near zero. An option with delta of 1 would be equivalent to a hurricane insurance policy on a house in...

If you sell a 12-month hurricane insurance policy to someone in New Orleans, and 6 months go by with no hurricane, don't you think you've made money deservedly? You put yourself at risk by betting there would be no hurricane. There was none, so you won the bet - or at least you're winning it...

I see that 100 shares of xyz are offered at 23.50. I put in an order to buy 500 at 23.50. I get hit on the first hundred. Last price is now 23.50. The offer is now 23.70. I raise my bid on the remaining 400 to 23.55. The offer is still 23.70. I raise my bid to 23.60... See how it works?

That's an illusion, caused by the fact that whoever you're getting your IV's from is no doubt using the cash vix as the underlying in its calculations, rather than the vix futures contract of the same expiration as the options (which would be correct). There's a free video at...

Deep ITM options trade seldom, so the posted IV's are often inaccurate. Look at the same-strike OTM put - that will give you a more accurate IV. Due to put-call parity, the same-strike puts and calls should trade at the same IV.

You're confusing deltas with gammas. The value you get for your gammas is the same whether you make money or lose money. It's the delta that determines whether you made a good directional bet or not. Nothing to do with gammas. Let's say you bought xyz 120 calls such that your position...

You seem to be leaning toward the use of options over underlying because by buying options you acquire gamma, which as you say means that as the underlying moves, the delta changes in the direction you WANT it to change. True, but keep in mind that you PAY for those gammas. That's what the...

Maybe I'm misunderstanding what you're trying to do, but if you buy high-delta (ITM) calls and you're "right" (underlying goes up), then the underlying is moving away from your strike and your gamma goes down, not up. Same if you buy high-delta (ITM) puts - if the underlying goes your way...

Years ago I took a look at Gecko's Track n Trade options add-in. It was unbelievably terrible. The implied volatilities and greeks of all the options were calculated inaccurately - absurdly so. It was even worse with the Eurodollar options as the developer apparently didn't understand the...

It's true that fixed strike vol is less volatile than VIX. But fixed-strike vol is a poor comparison. Let's take that 900 put as an example. As the market drops, the demand for convexity increases, driving IV on the 900 put up. But at the same time, that put is now less OTM than it was...

What "event" caused the market to crash in 1987, which would have driven the VIX (had it existed at the time) to an estimated 150? The election may be over, but that doesn't mean the market can't go down. And if it does, the VIX will go up.

If anyone thinks that the negative correlation between option IV and the price of stocks is just an artifact of the way things are calculated, they need to get out and trade some options and get a feel for how things actually work. Options behave completely differently in a down market than...

How then would you explain the almost-perfect negative correlation between SPX and VIX, as charted on the previous page?

That's a little different - in this case skew and IV is a reflection of insider info. Or at least, very educated guesses. In which case you would use it as a direct - rather than contrarian - indicator. Still a very valid approach when used with individual stocks. But for the market as a...

Very sound approach. Use it as a contrarian rather than direct indicator - relatively higher OTM put prices are bullish, not bearish. This skew is quite stable - much more so than the skew in commodity options - so you'll be dealing with relatively subtle differences. But it's an absolutely...

When I wrote "puts" in my previous post, I meant "out-of-the-money puts." By "calls" I meant "out of the money calls." As you say, puts and calls at the same strike trade at the same IV.

Ya gotcha theory, and then, ya gotcha fact. Congratulations on having noticed they're not the same. In fact, whenever the market goes up, the VIX drops. When the market goes down, the VIX goes up. You can look at a one-minute chart, a daily chart, a weekly chart or a monthly chart and you...

Over time, going into events that are much-anticipated and well-publicized, you'd probably do much better shorting straddles or strangles than buying them. When the anticipatory excitement is high, the reality rarely does it justice. Every now and then of course you'll get creamed, but that's...