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But what if there are a thousand people doing the same thing for 100 nights. Let's also assume the realized death toll is 1.6 deaths per drunk. In addition, the cops were selling get-out-of-jail cards in the event you killed up to 2 other people. All the drunks bought these cards even though...

So much for tulips. By definition of open interest, there are just as many long. However, I don't disagree that volatility is currently low.

Short interest in futures?

I guess I should just be happy that people are generally adverse to selling premium.

Ok. Scratch price/cost and replace with vol. Just trying to say things in a different way vs repeating over and over that IV > HV. But it doesn't matter. We clearly have different trading personalities and one has to stay within their personality in this business.

I don't recall saying realized risk will be zero.

Bought BRK.A about 10 years ago. Haven't sold yet. Likely never will.

I'm selling protection at a price higher than the realized cost of providing that protection over the long-term. This doesn't sound like a terrible risk proposition to me.

I would agree 100% as I mention risk aversion a few posts up.

It doesn't matter why IV > HV. But if we agree that IV > HV isn't that the end of the story?

It is that simple. It's the principle of risk aversion and utility. To each his own.

It matters when I get paid based on a higher IV as compared to the risk I realize.

I agree that there is an 'unknown' component hence the long-term relationship. But there's no disputing that IV > HV or RV in the long-term. In the end, that's all that matters to me.

Skew is there because of the implied differences in velocities of gamma between the two directions--not because of general uncertainty. I'm not sold on the notion that the extra risk premium has to be there.

Not instantaneously. HV contains realized risk. IV contains implied future risk. What other risk premium is there? Please educate me (not meant to be sarcastic).

I'm not particularly good at timing, but over the long-term, IV > HV.

That's where appropriate position sizing comes into play. Are you saying you are constantly short delta and long gamma.

I don't know if it's gonna kill you. I try to manage my delta/gamma to break even in a gap down of 100 on the ES (vega adjusted). If it blows past 100, so be it--an insurance company has to pay out once in a while. The risk of gapping to the upside is another story which would benefit my...

Short delta, flat gamma works.

Closed my put spread this morning within the first 20 minutes. I'm still a little short as well--a couple of short ES with covered puts and a bunch of straddles/calendars on individual underlyings which are skewed to the downside.