seriously? So if I'm long the SPX I "want" vol to rise? Where do you get YOUR information? Also you can wordsmith "trading" all you want it still is a bet.
IV is directly proportional to the option premium prices. If you bought an option at $1.00 per contract with 1% IV and the next day, the IV shot up to 10% your $1.00 contract price would rise accordingly - the opposite scenario is also true. For long positions you want IV to be equal or greater than what it was when you bought the contract. For short positions, you want it to be equal or less than. That's why you can look for stocks with IV spiking to high percentages, short some options and then buy them back when/if the IV calms back down. Don't get technical with me!
In theory....in the REAL world of my trading experience when I was long an SPX call and IV doubled...market tanked and I lost money....my call did NOT double. Perhaps because there is just a bit more involved. Curious .......is your wisdom from what you have read/studied or personal experience from X years of trading? Care to share?
ATM is a binary proposition, 50% likelihood. A pick-em market. "Near the money" is OTM and therefore even less likely, you think?!?! So your "100% chance" of being ITM is a bit optimistic! HTF were you not in the running for Fed Chair?
You do realize that IV and market direction are mutually exclusive - you lost money because the market moved against you, not because IV didn't cause option premiums to rise enough to compensate. IV refers to the magnitude of the market moving one direction or another from its current point. It tends to be higher in a market that is trending down, which is not to say it can't increase in a bull market. IV does not predict when or which direction the market will move, it just estimates by how much. FYI a standard deviation can be calculated by multiplying the current market position by the IV. If the market price is at 1000 and IV is 10%, one standard deviation would be +/- 100, meaning an expectation that the market can move anywhere from 900 to 1100. That would you might want to set your spreads/hedges considering those boundaries to play it safe and lose money less often.
lol no. omg, bro! That's simply 68.27% of the distro! Seriously, this is even more moronic than your "profitable positions within 3 std devs." Read a remedial 099 statistics book or find someone to think for you. For the sake of your kids!
THAT is not what YOU said...you said vol goes higher long make $$...anywhoo .......care to answer my question...is your experience "real" world or "book"?