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July 3rd Video

Discussion in 'Options' started by Trader G, Jul 6, 2014.

  1. Trader G

    Trader G Well-Known Member

    Jim/Tom,
    Great video, I am trying to wrap my head around the skew vs. the VIX. So with the skew that steep and we have a drop, would the ATM iv should rise faster than the otm since smart money has already bought their puts? I am trying to work out some portfolio hedges and one that comes to mind is to buy 3-6month VIX calls atm and finance the theta with otm SPX put verticals (sell fewer but move the long option further down the chain so that even though the skew is higher than the short the cost is low)? Or maybe a /VX future and the same SPX put verticals in case we sit or vol drifts lower? I am just curious if you guys think there is a play of VIX vs. SPX.

    Thanks again, great video!
     

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