Vix options are priced off the futures price.
In my understanding, trading VIX options is essentially trading a european style VIX futures option (assuming you trade 10 options contracts). Of course they are not margined this way.
Long call short stock = straddle? I'm trying my best to plow through Cottle's material, so my understanding of synthetics is somewhat limited at this point, but can you elaborate on this? Doesn't seem to fit the pnl diagram of a straddle when I plot it.
My understanding is your're describing...
Think of it more as a blessing if the stock is thinly traded. Nothing like trading an option thats only traded on two exchanges... My fault for not noticing how illiquid it was though..
Think it has something to do with the CBOE quote feed. VIX, SPX, DJX, TYX and the like are all messed up. VIX and DJX are CBOE specific, and $DJI works fine, all the others are completely messed up.
Happend all the time when I used Scottrade before. This has been discussed before on ET.
My guess is perhaps they can boast on "price improvement"
Haven't the slightest idea if/how this happends on the nymex.