Why don't you give an empirical example of how "vega can surprise." I think a lot of people on here could benefit from that.
I think DYOR is the key vol expectations v reality -none of mine would make any sense as I trade the FTSE in the UK and I don't have the data to hand-it will happen soon enough when the naked sellers start crying
Does IV affect FX options like it does indexes? I mean there is technically no "Bear" market in FX because they are multidirectional / buyers sellers each side. I can see that the options aren't priced equally. I imagine that this is due to the market going in one direction for a while. What I'm saying is will IV rise in the direction it is going of the call / put options or fall?
Does any1 have any experience with CL options? I've been placing a few trades on CL and I think IV is less on the puts as the market moves in favor of them. I thought IV would rise on the puts when the market moves in their favor due to market drop. Mbey I'm trading a few to many strikes OTM. Any advice would be good. Thanks.
could you elaborate on what you mean by "naked option "? E.g. if I sell a put on Russel and buy a put on Spooz, am I trading naked options? If I sell 1 year NDF on RUBUSD and sell 3 month put against it?
To OP: think of three different vectors in options trading -- trade direction of the underlying -- trade volatility (realized or implied) -- trade risk premium Any trade you'd put on will include all of the above but in different amounts. You, as a trader, have to decide what vectors align with your strengths and which are not your expertise
Have a look at Short Bond vol vs Long Gold vol now and week after the FED announcement. Those are correlated assets (30 day @ .40). But, only one is getting ready to move (rising IV). Essentially, your long correlation. The next great product. Sell ZN-GC CORR futures at .80.