Search results

I think it has to do with absence of scientific thinking for most people. And you are right, I (and I could probably speak for Marty) would be happy to explain basic vol arb concepts here, but nobody seems to care.

No, since the asset in question is volatility, both buyers (Volatility Bulls) and sellers of vol (Volatility Bears) can make money, but ... I am still struggling to understand the point of this thread - do you want to know if you can make money by selling strangles/straddle, condors or...

Bulls Make Money, Bears Make Money, Pigs Get Slaughtered (c)

No, volatility trading is about trading volatility, which is profiting from mis-pricing of implied vol. Trading strangles, condors, anything where you remove the directional component is pretty much about volatility trading. I did mean risks, not greeks. The book is fairly basic if you have...

I am sure it depends on the definition of what a "successful Hedge Fund manager" is. There might be some people out there managing ten bucks who got through life without going to college or even dropped out of high school.

Yes, degrees are overrated, but education is not. A good school will teach you how to learn things, how to interpret data, how to build on a hypothesis and so on. True, it's very hard to get to a Wall Street or a buy-side job without a degree, but it is even harder to survive in the modern...

One of the key mistakes of all beginning options traders is that you trade very specific types of positions. No, you have to think of relative value in terms of risks and then compose a position that matches that risk profile. If you like selling ATM gamma (convexity) and protecting yourself...

Well, I am saying that supply/demand curve for implied volatility is not as elastic with respect to actual realized vol as one would expect. Thats what the risk premium is all about. Technically speaking, in an efficient market no derivative trade could have any positive expectancy. So, no...

It is a truism. Anything in the world that is rich is due to demand from buyers and lack of sellers. Question is why the supply/demand curve for vol looks the way it does.

You do mean august 17th, dont you? Anyway, the options will pay based on a VIX special print on the same month, but that VIX value will be based on the interpolated expiry of SPX options in 30 days.

There is a number of "alpha" strategies that different banks offer, the best suite in the interest rate world probably comes from DB. In general, these strategies offer fairly simple "statistically probable" payoffs. E.g. stupid buy-write, straddle or strangle selling have already been covered...

People who buy these cars always amazed me. Why would anyone plunk a bunch of cash on a depreciating asset?

Not true, both option seller and option buyer could make money as long as they do not hedge delta at the same time. Obviously, all that is happening is that losses are transfered via delta hedges onto some third party in the market.

my wife drives me mad!

Why, the number of savants on this forum is exceeding my expectations! I would kiss this guys hand for just meeting him, considering that In any case, there is an economic explanation for why vols are structurally rich. Any seller of convexity will demand compensation for (a) increased...

I would start from Volatility Trading by Sinclair. What exactly do you mean by "advanced" - are you looking to improve your execution, data analysis, opportunity search?

By definition there can not be such a contract since it would be arbable against regular S&P options. Give me a min, I will write a nice intro on how VIX, VIX futures etc work and how they relate to regular S&P options.

Off the top of my head, I have the following counterarguments: (a) If your tax rate is approaching 50% (mine does :mad:), giving to an official non-profit organisation is a much more efficient way of getting money to the "final cause" (assuming that the final dollar will have the same...

as a technical indicator that gives you some sort of probability-weighted stock price levels for the near future? E.g. if I have a recent price history for a stock (say AAPL) and give it a collection of price levels, it would give me a probability of getting to these levels. Or, as an...

Revcon = reverse convertible is a staple structured product. The buyer of the note sells an option to the dealer that allows the dealer to delivery either the principal or a pre-defined number of shares at maturity. PS. In most cases, these days it's done using some exotic features, like a...