08-21-2020, 07:35 PM
(08-21-2020, 08:50 AM)crimsonghost747 Wrote:(08-21-2020, 08:32 AM)NilesMike Wrote: If you OTM put becomes ITM, look out.
Any particular reason for this?
Has it been difficult to roll them forward if it ends up ITM close to expiration?
I've never traded it before but it does look to pop up on a regular basis, so rolling forward would logically give you a tiny bit more cash and more time to wait for that pop.
Bid/Ask can get quite wide.
VIX option prices are actually based on the front month VIX future.
If the VIX term structure goes into backwardation, you will pay for rolling.
Much simpler to trade /VX if you wish to trade volatility. It too is quite hairy.
That is why I buy the option with enough term to "guarantee" that I will get a profitable pop.