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Ha ha - oh xflat - you're so cynical! Which is why you're no doubt right on target...

Trying to find off-the-shelf software that looks at skew just the way you do seems a long shot. Probably your best bet is to get an Excel option function add-in package such as Hoadley. That way you can construct spreadsheets that do exactly what you want and display it in the way that makes...

For a math-free common-sense explanation of BS see http://masteroptions.com/?p=3

Theoretically, all options on Ford should should trade at the same IV. After all, they all have the same underlying, which has a single volatility. But in reality, IV is just a measure of the demand for an option. So if option A has a higher IV than option B, that means there is more demand...

I created and posted a 45-minute video that explains IV and the logic behind option pricing at http://masteroptions.com/?p=3 It's free and if you watch it you will have a much better understanding of how it all works.

This looks like a neat site with lotsa cool stuff. But I'm curious Ron - your IV charts are of something you call "IV30". There's also IV60, etc. I have a lot of questions about what those are and how they're calculated, but I assume you have something on your website that explains it...

Bismarck also talked about the psychic/emotional boost he got from just wrapping his arms around a tree. Hence the term "Tree-hugger." Honest.

As you say, pretty much everything goes down in a deflationary depression. You might want to look at some of the January 2012 puts, which would do quite nicely if your scenario came to pass any time in the reasonably near future.

Droid, you are doing what beginners do - trying to find some "strategy" or combination of options that is better than other "strategies." Some magic combo that will give you an edge. As a learning exercise there's nothing wrong with that. It makes you think about how options work if this...

I agree with this. The threshold of a professional-level understanding of options is when you know beyond needing to think about it that a put is a call and a call is a put because at their core they're both premium - gammas, vegas and thetas. If you're trading options and this is not...

Predicts it, precedes it - either choice of words is fine with me. Most accurately, low implied volatility - which equals high complacency and low worry - lays the groundwork for high volatility. When as you say "some event changes it" - as it inevitably will - the lower the implied...

That's the theory. But in reality, implied volatility is more reactive in nature than it is predictive. It's just like hurricane insurance in New Orleans. It didn't go up before Katrina, it went up after Katrina because Katrina cost insurers a lot of money and made them realize how...

Not to be argumentative Nazzdack - but it's you who's raised the question - namely, "What conclusions can be drawn if you see big volume in an option?" And it's xflat and I who gave the answer - namely, "None."

When you see a transaction take place, what makes you think you know if a MM was one of the parties? The buyer might have been Sam the Sham in Kalamazam and the seller might have been Sue in Timbuktu. Besides, a MM is obligated to take 50 contracts. What possible relevance does that have to...

Let's say there's open interest of 1,000 in an option. One day out of nowhere there is huge volume and the open interest jumps to 101,000. What does that tell you? There are 100,000 new longs, yes - but there are also 100,000 new shorts. You cannot possibly have the beginning of a clue...

Ha ha - leave it to you to keep me honest Maw :) What I meant - and should have clearly stated - is that absent interest rate and dividend considerations, if all your options have the same expiration, then if you are long vega you will be short theta and vice versa. And indeed, if you...

How do you figure that? If the market is .60 bid at .70, and someone puts in a bid of .65 for 1 contract, and that bid is hit, the market goes back to .60 bid at .70 (provided no new bids or offers come in). Once the .65 bid is hit, it is gone.

If all your options have the same expiration date, then if you're long vega, you will be short theta.

Long the back months, short the front months.

What would be the point of doing that? If the market is .60 bid at .70, and you want to pay .65 for 50 contracts, it seems to me your best bet is to simply put in a bid of .65 for 50. Once you put in your bid for 50, you're first in line to get them if in fact somebody IS willing to sell at...