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Posted on July 07, 2008

Sell the FNM July 15 straddle for $4. Yes, that's $4 for a straddle with a strike price of 15. With 2 weeks to go. That translates into something like a 180 volatility. Don't they have government guarantees or something? Free cheese!OK, hoping the sarcasm above is obvious.That's some monster price of course, wow. The best thing you can do when something goes on tilt like this is just avoid it. The next best thing is to use spreads. Either calendars or a directional bet via a vertical. The worst thing idea is just sell gamma and cross your fingers and hope for the best. It may work out, but vol...

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vix , volatility