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Right. Following, in fact, is a quote directly from the CME http://ftp.cme.com/trading/fx/banks.html

Price is determined by the law of supply and demand, right? The more demand relative to the supply, the higher the price. By the same token, option IV is also determined by the law of supply and demand. It is determined by nothing else. It cannot be determined by anything else. That is...

Are you saying that market makers are required to post a bid greater than zero on every option? If so, that is great news. There are lots of options I'd like to sell for one cent the day before expiration. If they are NOT required to post a bid greater than zero - as I suspect - then there...

IV and price ARE often used interchangeably. There are markets where option bids and offers are quoted in IV, not price. If you have IB, you can set up the quote screen so it shows bids and offers in either price or IV.

Of course, if there's a price, there's an IV. But if there's no demand, there is no price, and therefore no IV. I thought it would be obvious to everyone that no demand = no price. No demand means nobody wants to buy it. If nobody wants to buy it, there is no bid. No bid means no price...

If you want to define "demand" as "order flow" then we're not having the same conversation. As most people understand the word "demand," if an option has a bid of 2.56, then there is demand for that option. "No demand" means there is nobody willing to pay anything for the option. In any...

IV IS just demand. It is nothing else. In the absence of demand, an option will in fact not have any IV. That may not be obvious, because the exchanges will always display an offer of at least 1 tick, so the IV will be calculated off the mid-price between the bid and the offer. Today...

NO NO NO! That is NOT a stretch! Is it a stretch to say that the price of IBM is really just an indicator of demand for IBM? The relationship between IV and an option is EXACTLY the same as the relationship between price and a stock. A measure of demand. That's it...

Generally speaking, you want to use the actual implied volatility, for the same reason you use the actual number of days remaining and the actual price of the underlying. However, there are some different approaches. Some like to use the actual IV of each strike to calculate the delta of...

What's an implied delta? If you mean a delta calculated using the implied volatility, then yes, that's generally how it's done.

Heech, call the span people at CME. I've done that before with some pretty obscure questions and actually got hold of someone who knew the obscure answers.

Such setups don't come along very often but they do happen. The ones that work for me are when the normal skew in a contract is reversed and IV is historically cheap. The play is to buy ridiculously cheap, far out of the money, back-month options. The best example I can give is May of '07...

Does IB have any floor access - any way to get a quote from the pit, and put an order into the pit?

For your deep in-the-moneys, you can just do an offsetting futures position. For example, if you are long 2 ditm calls, you can sell 2 futures contracts, locking in the intrinsic value of the options. If you like, you could also sell 2 puts at the same strike as your long calls, squeezing a...

Oddtrader, if you spent half as much time studying options as you spend trying to convince yourself that it's really a waste of your time to study options, you'd be an expert by now. If you want to understand implied volatility, watch my video "What is an option worth" at...

No one knows all the possible reasons why such a trade was made. In this case - whatever the reason for it - it looks like a pre-arranged trade to me. If you look at the action in that strike over a week or two prior to that trade and for a few days after, you will see that that 100,000 lot...

This is not an arb because buying VIX futures only covers part of your risk. When you short options you assume vega risk and gamma risk. Buying VIX futures only covers your vega risk. You're still naked short gammas. [B] Right. And note that most of the time when the VIX trades around...

"Poorer?"

Imagine you're setting out on your new sailboat for a trip around the world. Before you go, a genie offers you his personal guarantee that you will complete your journey safely, for a modest price of $10,000. You decline. After all, you're a competent sailor. How bad can it get? In the...

I'm curious - is this OU doing this, or someone stealing their course and selling it quietly "behind their back?" Is the link to take advantage of this offer actually the OU site?