Options Jive

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Trading Stocks Against Volatility

Options Jive

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

The negative correlation between SPY and VIX introduces a pairs trade which would be simultaneous buying or selling of SPY and VIX exposure.

A unit ratio which simplifies the real situation can be used to trade stock shares, options or the mix by monitoring the delta exposure of the positions.

Volatility trades can hedge stock position. A tendency to do this is to short the pairs, but a more direct pairs can also be done.

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