heard bank traders are selling vol and delta hedging...

Discussion in 'Options' started by mizhael, Jun 1, 2011.

  1. this guy is a bot used to generate hits from wilmott or someplace. asks a million questions and never follows up. increasenow's twin brother
     
    #11     Jun 1, 2011
  2. spindr0

    spindr0

    What, no cookies and milk and nap first??? :)
     
    #12     Jun 1, 2011
  3. spindr0

    spindr0

    Stay upwind from him
     
    #13     Jun 1, 2011
  4. #14     Jun 2, 2011
  5. The question is: the vol is so low, how can bank traders make money by selling the already-so-low vol?
     
    #15     Jun 2, 2011
  6. Interesting! What "futures vs. cash" trade are you referring to here?
     
    #16     Jun 2, 2011
  7. I also think the vol is already too low, and also occasionally the vol spikes upon big events, but I knew these bank guys are making money but I don't know how they make money - do they have special strategies and smart algos?
     
    #17     Jun 2, 2011
  8. Your Honor, he is leading the witness!
     
    #18     Jun 2, 2011
  9. hen12y

    hen12y

    agreed vol too low especially in GO and brent. every time ti moves away from the 100 mark vol goes bid, then comes off again as it tends back towards 100. i think people are nervous about another $10 movement one way or another but not sure which direction it's going to go in. also nervousness seems to be compounded that the further away you go from 100 the more vol goes bid, meaning the farther away we go from 100, the more likely it is to keep going.
     
    #19     Jun 3, 2011
  10. Maybe the bank traders have been selling vol for a while so they have actually riden the vol down so they made money?
     
    #20     Jun 3, 2011