Sadly that can even happen with regular equity options. But VIX options require a little more undestanding and definitely some VIX future charts/quotes experience.
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Vix
- Thread starter clarodina
- Start date
Sadly that can even happen with regular equity options. But VIX options require a little more undestanding and definitely some VIX future charts/quotes experience.
Ya know, I've seen that statement several times now... but *other* than the mistake made by the OP in this thread (not understanding that VIX options are priced on the underlying rather than spot)... there's nothing at all tricky about the VIX.Quote from erol:
i don't have anything productive to add.... but I thought i'd just say that I wouldn't touch vix options with a 10-ft pole.
didn't someone on this forum mention they were right and they still lost money?
I have a couple open positions right now (selling volatility.. er.. volatility of volatility). And I actually think VIX is a pretty good trading target.
It mean reverts; it's a pretty liquid market, and while ask/bid spread is large in cent format... it's only a couple ticks, and it's easy to get filled sitting in the middle. It doesn't gap up/down much over night. It's pretty well behaved.
I don't see any reason for anyone to cross it off the board. It's not that complicated at all.
Quote from heech:
It mean reverts; it's a pretty liquid market, and while ask/bid spread is large in cent format... it's only a couple ticks, and it's easy to get filled sitting in the middle. It doesn't gap up/down much over night. It's pretty well behaved.
I don't see any reason for anyone to cross it off the board. It's not that complicated at all.
It can take several months to revert to the mean.
It does gap 10% when markets are volatile.
The major reason for crossing it off the board is that the options are European style, and that means options can trade several dollars under parity.
My two cents
Mark