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The first two parts of this article provide pretty good background: http://www.bloomberg.com/news/2014-03-02/putin-grab-for-crimea-shows-trail-of-warning-signs-west-ignored.html

Crimea nearly broke the British Empire? In what alternative history did this happen?

There's nothing about a trade like this that can be made "better" or "different". You're expressing a directional view. Ultimately, it only makes sense to do this trade if you really disagree with the distribution of probabilities implied by the mkt price. As an exaggerated example, if I told...

The ultimatum rumour has now been denied by the Russian Defence Ministry.

No no, this is a $9 - $10 call spread. The most it can ever be worth is $1. So if you pay $1 for it, you will make 0.

Here's a very simple question for you to ask yourself, while avoiding all the option blah-blah... Imagine you're not already long this call spread and, instead, someone offers it to you today. Given that you know that the most you could ever make on it is $1 in one month's time, during which...

Firstly, the West is seemingly unable to speak with a single voice on this (they can't even agree whether it's worth expelling Russia out of the G-8). Secondly, it's not entirely clear that Putin is likely to fold in response to an escalation. In this particular case, the stakes for Russia are...

What's the question, again? I missed it in all the excitement...

This is precisely correct...

I doubt that there will be a need for reservists in this little episode, Comrade... You gotta remember that the Russian Army numbers nearly 1 million active personnel. So my assistance will not be needed.

This has nothing whatsoever to do with Obama. If the US doesn't want to be the world's policeman, they shouldn't get involved. Let the EU deal with it, if they can and want to. After all, it's the EU that Ukraine wants to join. Moreover, Georgia in 2008 offers a useful guide for what happens...

Wait a sec, we're talking about the "rapid incline" of the expiry payoff diagram? Say it ain't so, 'cause I sure wasn't expecting "value" to denote smth like that...

I am not entirely sure what you mean by "rapid incline in value"...

Well, there you have it. From the horse's mouth, so to speak... You don't need no delta, no vega, no nuthink!

Precisely!!!!

Pure accident, I assure you... I ended up randomly applying and, what's even more shocking, randomly being hired by a rates desk. Wasn't by any particular design or anything of the sort.

I would wholeheartedly agree. Exceedingly complex models have all sorts of issues. IMHO, using something simplistic like B-S with full awareness and understanding of its various shortcomings and caveats is infinitely better than some "sausage factory"-type model. That's why, generally, you'd...

Definitely the latter...

Yes, there are models, although I wouldn't get too excited about GARCH... In my experience, trading vol is mostly a matter of exhaustive and relentless scenario analysis, rather than models.

I suggested the strategy... Interviewing people over a drink never occurred to me, 'cause I am always painfully aware of how incredibly nerdy it looks. Sitting in a bar, talking about straddles and implied vol, scrawling little payoff diagrams on a napkin, jeez! Imagine the pickup lines!