trading VEGA

Discussion in 'Options' started by jenek-cowboy, Oct 16, 2007.

  1. cvds16

    cvds16

    Basically if you trade longer term vega (which I wasn't doing) you shouldn't consider yourself too much with historical or implied vol, it's future vol you are interested in, the only reasonable thing you can say is that in the long term vol is mean reversing, but if this helps you in trading vol is a totally other mather ...
     
    #21     Oct 16, 2007
  2. thank you for a good answer. Shall research further.
     
    #22     Oct 17, 2007
  3. cvds16

    cvds16

    Predicting future vol is the most difficult thing, those that know probably won't tell, those that tell are probably only guessing ...
     
    #23     Oct 17, 2007
  4. you want say that the attamp to build system for analisis the IV will not bring the result?
     
    #24     Oct 17, 2007
  5. cvds16

    cvds16

    if you can really predict vol you can make a fortune trading vol futures, however few can do this ... so yes I doubt it
     
    #25     Oct 17, 2007
  6. it's no secret that when IV change on 1% the price of option can change from 2 to 4 %. How i can extract the profit from this without math indicator of IV?
     
    #26     Oct 17, 2007
  7. cvds16

    cvds16

    sorry but this is not an english sentence, I don't really understand what you mean, if you want an answer you have to rephrase your sentence.

    If implied vol changes by 1 point vega indicates the change in price of the option(-portfolio), not in percentage but in real dollars.
     
    #27     Oct 17, 2007
  8. certainly you right. SORRY
    For example.
    For option on GAZPROM.
    IV -25.
    PRICE-3000
    if IV is changed on 26 then the price is changed to 3060-3090.
    and we see in this get prettier possibility for trading.But we don't the method for measure the IV.
     
    #28     Oct 18, 2007
  9. cvds16

    cvds16

    you need an options model, it's possible to calculate (or more precisely let the computer) calculate your IV through the model.
     
    #29     Oct 18, 2007
  10. What you mean when you say "option model"?
     
    #30     Oct 18, 2007