Tag Archives: Black-Scholes

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The Collapsing VIX and the Rise of New Options Trader

Traditionally, professional options traders choose to utilize options because of the advantage provided by volatility. Volatility traders (“vol traders”), those who are always selling options to take advantage of the convergence of volatility and Theta (time) decay, are seen as the smartest guys in the room. They capitalize on the complex pricing of options, essentially […]

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Volatility Arbitrage

For option traders it is vital to know how implied volatility (IV) affects the price of an option. Many times traders get frustrated about losing in a position when they were directionally correct about the expected move. The price of an option is derived from several inputs into a robust pricing model such as Black-Scholes. […]