This episode explores the impact of high volatility on the options market, specifically focusing on skew and strike distance. Against the backdrop of a significantly down S&P 500 (down 110 points at the time of recording), the hosts analyze market behavior and the implications for options trading strategies. More significantly, they delve into a 10-year study on 16 Delta calls and puts, revealing that put options consistently exhibit a larger percentage increase than calls in lower VIX ranges, highlighting the increased demand for downside protection during volatile periods. For instance, the analysis shows that as volatility rises, the gap between put and call strikes widens, but remains proportionally stable, indicating that while both calls and puts increase in price, puts offer better returns in high volatility environments. The hosts also discuss upcoming live trading events in Atlanta, London, and Milan, emphasizing the opportunistic nature of volatile markets while cautioning against the emotional challenges of trading during market crashes. This discussion highlights the importance of understanding market dynamics and adapting trading strategies based on volatility levels.
