Deltas on OTM VIX options

Discussion in 'Options' started by UVXY20, Nov 6, 2023.

  1. UVXY20

    UVXY20

    Any reason why the deltas are so high on way OTM calls? I mean like 0.07 for a 40 strike with a short time to go? Is the back of the envelope use of delta as a probability finishing ITM estimate useless for VIX options or OTM or both?
     
  2. Details please:
    1) Which expiration? (need time reference)
    2) VIX231115C40 appears to have a delta around 0.017 currently, so unclear what you are looking at.

    Take care if referencing VIX iv, greeks, extrinsic, etc on TOS as it is typically unreliable (reliability reference is specific to VIX options).
     
    Last edited: Nov 6, 2023
  3. UVXY20

    UVXY20

    I looked at this last on Friday and it was a Dec. 19 call @ 40.
     
  4. That is nearly 47 days to expiration, and on the back month, not the front month, so a lot of time value remaining. Here is what I observe at the close Friday (actually @ 16:00 Eastern) that matches your observation. upload_2023-11-6_9-48-32.png
     
  5. I just expected a lower delta, given the likelihood of being ITM on that date. Not talking barrier option here.
     
  6. IV at141% and theta 0.013? Glad I don't trade VIX options, that makes no sense to me
     
  7. destriero

    destriero


    lol what happens to delta as vol-rises?