Silver ETF - Volatility

Discussion in 'ETFs' started by EquityGuy4321, Mar 3, 2006.

  1. Here is a question for metals options traders.

    Everyone at this point knows what's going on in silver. But the concern is that new ETFs (when they appear) will make the spot market more illiquid, and hence affect the way the futures trade.

    My question is how will this affect implied volatility going forward? Will option vol become more expensive?

    Any thoughts welcome.
  2. there are 100 answers to your question......

    the only given will be the wailing and sobbing heard around the world if the ETF is delayed or dumped....
  3. For what it's worth..............option volatility for silver futures options should rise as the underlying market rises, as it does for all physical commodities(except cattle). The silver ETF's? Are they based on silver mining company stocks or silver bullion? Anyway, they might be influenced by a lot of covered-call writing. That would tend to cap-off volatility as the market rises for those ETF's. That could be an interesting spread trade between each set of options. We'll see what happens.