Safe Approaches To Volatility Skew Trading

Posted on August 25, 2011 - 6:03pm

ryanbrennan's blog

By Lawrence G. McMillan

Vertical skews appear in option prices during times of panic and in futures prices in terms of euphoria. Since we have been experiencing a lot of both lately, we have gotten some requests from traders asking how to play these skewed situations without using naked options. This is a subject that we have covered in the past, but it might be a good time to review it, considering current market conditions.

Just in case everyone is not up to speed on the terminology, we’ll briefly review what types of skews we’re talking about, and then we’ll explore the spreads that present alternatives to ratio writes...

Learn about Safe Approaches to Volatility Skew Trading in The Option Strategist Newsletter Volume 20, Issue 16 (published last night, 8/25/2011).

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ryanbrennan's blog

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