Insightful thread. Skew is all about spot-vol covariance. Steep skew in some strike or maturity calls for one more layer of analysis: How vol may be bid at those low strikes and how crowded dealers' positioning may reflect to pricing if the underlying trades through those levels.

Credit behaves similar to equity vol → trading HYG options is somewhat akin to trading VVIX (?) There's a credit VRP to harvest and increased volume suggests many are working around the best way to pick that. Ideally, you'd want HYGH to gain traction and trade that instead.

50% of successful trading is avoiding other people's narrative.

This 👇

Educational tweet: The biggest misunderstanding around selling volatility or options is the idea that the act itself is bad. It is not. Selling an option is no different from buying or selling any other security. The real issue is how most people implement the trade. When

I created a quick overview of skew and vol term structure, including the concept of how vol scales in root time.

"Regime-Based Portfolio Allocation: A Hidden Markov Model Approach to Tactical Asset Rotation" medium.com/@Splendor001/r…

Very saddened to hear of the passing of John C. Hull, whose book Options, Futures and Other Derivative Securities was a foundational text in finance. I purchased the second edition (the first of many editions I would buy) in a mall bookstore decades ago. Liar’s Poker showed me