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yes, buying puts seem to be the way to do it...or short calls w/ stoploss...not that i'll need it:cool:

It's all semantics, the point is markets are full of assymetric information and I have some lemons for sale.

Thanks for the responses The OTM put idea seems reasonable as newwurldmn and cdcaveman suggested...the puts seem to produce the best returns from all the positions I've looked at so far. Theta is the enemy here however. As for vol views, I dont have any particular view on vols, but given the...

I have a stock I know 99% will go down, what is the best way to absolutely maximize the return on margin / minimizing risk via options? Selling ATM calls? Synthetic short? I need some ideas...thanks guys

Makes sense

Dynamic hedging allows you to make the difference in implied / realized, however I dont think it realizes the famous VIX edge, which is contango. The best way to realize it is probably pure short deltas. Personally I use VXX, XIV, UVXY etc to realize it. One of my fav edges and definitely the...

Wouldn't that be arbed out?

Well, my vola formulas are all annualized so I get the same figures accross. I should have spesified. But yes obviously daily vola will be quite different from weekly vola and so on. Haven't been dealing with any of these formulas in months, most of my stuff is now automated...can't wait till it...

I see what you are saying, but I doubt there are any opportunities here. On such continous disrepancies as in your example, people will price it in amazingly fast. VIX futures are an option. They have massive contango, an edge for the short vol trader. I would never trade long VIX futures...

I get the same % vola no matter what time period I use. I think your math is off. Such an arbitrage would be too good to be true now in 2012. As for gamma scalping, it's the same as with all volatility trading. Long gamma means a slow bleed with occasional big profits, short gamma means slow...

Yes it works, but be aware of transaction costs doing this.

You're not continously monetizing anything. In the end you make the time value and obviously that depends on time and vol at point of sale, but that's it.

Greeks isn't as important as you aren't monetizing them. Also, if you need two+ spreads to make same return as 1 naked put...odds are your vega exposure is approx the same accros the strats.

Put_master is right. Spreads allow you to overleverage, they require more risk for the same return %, they have less theta, and if it drops below your long strike you're looking at a total loss of invested capital. A short put at X is the same as long stock at X. A short spread at XY is the same...

Wheter or not naked put selling can "crash" an account depends on your spesific strategy. if you just sell naked puts randomly and let them run to total losses without any adjustments in case of touch, then yeah your account will probably crash. But thats' not the put selling that does, its you...

It's too bad nobody was killed

If your account keeps growing, naturally you need to make bigger bets for the same return %. If you want to compound or not is your choice. The financial risk in compounding is bigger in total but the same measured in % of acct

Gotta love the drama in here....

From reading the replies, you'd think OP was asking how to perform brain surgery. His question was extremely simple and it also has an extremely simple answer: Stock goes up, volatility goes down.

Forget about it, too much contango. The contango definitely favors the short seller, just look at VXX vs XIV. Because of it, VXX has limited upside, whilst XIV has unlimited upside. This contango is reflected in futures. No serious trader messes with VIX or any of the ETFs in trading vola. Go...