trading VEGA

[jenek-cowboy]

Quote from cvds16:

you better start to read a hell of a lot
start with Sheldon Natenberg: option volatility and market making
read mcmillan: options as a strategic investment
read also Jan Baird: option market making

is it also read

 

[cvds16]

Quote from jenek-cowboy:

is it also read

your english is not too great, I don't understand what you mean, sorry

 

[jenek-cowboy]

Quote from jenek-cowboy:

is it also read

in Russia we use stradegy which give profit as time disinteration with rolling.Nadeyust I understandable dialect.And we turn our effort to make a system oriented on trade IVO for deversification

 

[cvds16]

if I understand what you mean (I'm not quite sure about that) you certainly need to read those three books.

 

[jenek-cowboy]

Quote from cvds16:

your english is not too great, I don't understand what you mean, sorry

i mean :this is already read
I am sorry

 

[cvds16]

are you sure you understand all those three books, if you do trading vega should be no huge problem whatsoever on any stock wherever in the world.

 

[cvds16]

Real vega-traders don't just sell or buy stradles and strangles they also delta-hedge, to do this properly you need an optionmodel.

 

[jenek-cowboy]

Quote from cvds16:

are you sure you understand all those three books, if you do trading vega should be no huge problem whatsoever on any stock wherever in the world.

all methods that we know based on analisis an index on IVO.It is Correct this?

 

[cvds16]

What do you mean by IVO ? Implied volatility ?

 

[cvds16]

For what it's worth you don't need to know historical vol to trade vol, although it might help. As a mm you can for example sell high vol and buy vol in different strikes and ofset your delta's, you can trade vol in different calender months to ofset your risks.
As a trader (I don't trade options much anymore) I used to sit on the bid and the ask of options on DIA (the tracker of dow jones) and hedge my delta's and go along with the flow. If I saw people were buying options I adjusted my vol in my model and adjusted my prices accordingly, if people started selling options I did the reverse. I was making prices in 20-30 strikes. I didn't have much of a view on vega, I just went with the flow.