When shorting options til expiration, does IV really matter?

As long as you dont meet the" god of size",you can certainly take that approach.

Obviuosly,you arent trading with price stops and are willing to take down the asset..


Quote from TskTsk:

Hypothetically speaking, looking away from black swan scenarios, say I short options at 70% vol, then it jumps to 80% vol, my mtm hurts, but am I right in assuming this wont matter, because the vol will reach 0 at expiration anyways, thanks to theta removing all extrinsic value?
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Quote from TskTsk:
I must have misunderstood something. Are you guys saying the delta hedges I make when IV is higher will lose me more money than the delta hedges I make when IV is lower?
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That isn't at all what I'm saying...
 
Quote from Martinghoul:

That isn't at all what I'm saying...
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You're right, I misread. I agree delta-hedging will realize IVs above 0 within expiration.

Also, as far as I understand now, IVs wont affect the delta hedging P/L at all, since vega is separate from gamma/delta...but then theres the higher order issues (vanna etc) which we talked about yesterday, but that was negligible I believe the conclusion was

Now, if I could only figure out a way to measure how that damned vega affects my portfolio P/L...
 
If ur long gamma, then you're short theta
If us short gamma, then you're long theta

So...

If your're long options, then ur long gamma/short theta.
If you're short options, then ur short gamma/long theta.

Always inverse. Unless, there is some crazy new fangled, multi legged trade that I'm unaware of. But, those two greeks are always inverse. The things I remember from class :)
 
Quote from J-Law:

If ur long gamma, then you're short theta
If us short gamma, then you're long theta

So...

If your're long options, then ur long gamma/short theta.
If you're short options, then ur short gamma/long theta.

Always inverse. Unless, there is some crazy new fangled, multi legged trade that I'm unaware of. But, those two greeks are always inverse. The things I remember from class :)
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Positively correlated when looking away from plus and minus signs :)
As in higher (positive) theta equals higher (negative) gamma, and vice versa.
 
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