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you can trade on margin or trade futures/CFD/forwards instead. options are there to either take a limited loss view on the underlying or to trade vol.

If you good with direction, why complicate your life with options? Just trade the underlying....

In that case, could you please clarify what exact harm is going to come to me if I look at options from vol traders perspective? BTW, those who do not believe that vol comes before price, ask yourself - "how would a sell-side trader price an option on a stock that has no liquid option market?"

Really? What exactly do you think I missed and how does that influence my ability to trade options? :)

Well, implied volatility is largely driven by the event-adjusted recent realized volatility, while recent price performance has very little to do with the future performance of the stock. So, it seems that it's that the expecttion volatility determines the price of the option as opposed to the...

well, either that, or implied volatility is based on price... whats your point?

Oh, I thought you are talking about a futures calendars, but the thought process is very similar. No, you were not. If you are short say first VIX futures and long the second one, you are not neutral with respect to SPX. Think of it this way - what is VIX? VIX is a forward variance contract...

do you put them on as an SPX-neutral ratio or 1:1? ratio vix spreads or flys is a great carry strategy, once you worked out the kinks.

I don't get it. There is a huge number of beta-neutral vol strategies, from simple term structure plays to dicking around with VXX, VIX futures etc. There are hedge funds out there that ONLY trade volatility as a product. Yet time after time you get people saying either of two things (a)...

Running a large var swap book is about as much fun as a root canal. Yes, you don't have the strike risk but there is soo much other stuff that comes into play (basis, convexity etc) and liquidity is nowhere near the vanilla options.

Variance is it's own little animal with a lot of fuzzy fur and wrinkles, so understanding how trade relative value there is a bit tricky. Now, for first order approximation, you can download the history of VIX, rescale it for the business day count and here you go, you got a rolling history of...

Ok, who is villyfying whom? Well, when I started at Bankers Trust in 1995, mentioning that you work on Wall Streetn at a bar was (almost) a guaranteed blowjob. These days it's a guaranteed kick in the nuts. If I had to say it, it seems that I went from being a regular Joe to the "Supreme...

(a) The graph on the right does not seem to have any connection to reality. 2mm household income is definitely not top 1% and not even top .1%. There is less then 100k tax payers in this country that have this kind of income. (b) Somehow it escapes these people that to get to 1% or anywhere...

by what metric? By inflation adjustment, you get like like 1 million today ~= 600k 20 years ago, or if you use "shadow" inflation of 5% (which i think it's bullshit btw) you get 1 million ~= 380k. If you look by income percentile adjustment, 1 million today is like 790k 20 years ago. By...

i recall reading in the journal that there are like 3 millions people with investible assets of $1m or more, so 1 in 35 for all-in net worth sounds pretty reasonable. update: yup, a quick search found a cnn article - http://money.cnn.com/2011/05/05/pf/millionaire_rise/index.htm

To quote my wife: "if you think you can't buy happiness, you don't know where to shop!"

Social Security only takes into account W-2 income (wages), while both census and IRS data show up much higher. E.g. look here: http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

What exactly are you trying to say? PS. 1% of the population by income is about 350 grand a year, not a super-stellar number all things considered.

I've made millions via hard work and sacrifice. I worked 12-hour days while other people were drinking beer and having fun. I am still working 12-hour days while other people hang out a few blocks awa in Zuccotti par. Please don't tax me, I don't give a crap what some liberal arts major thinks...

btw, happy to talk all about trading skew today - working from home so no distractions