Chapter 20: Volatility Strategies

In this section

• Introduction to Volatility Strategies
  Learn how to profit from swings in market volatility using multi-leg option positions, Greek analysis, and Canadian regulatory guidance.
• Long and Short Volatility Approaches
  Discover the essentials behind long and short volatility strategies—including straddles, strangles, and iron condors—while exploring key concepts like time decay, risk exposures, and margin requirements under CIRO guidelines.
• Straddles, Strangles, and Combinations
  Explore how options strategies like straddles, strangles, and combinations help traders capitalize on volatility, including key risks, real-world examples, regulatory guidelines, and practical implementation tips.
• The Role of Greeks in Volatility Strategies
  Explore how Delta, Gamma, Theta, and Vega interact in volatility-based options trading, including practical examples, rebalancing techniques, and gamma scalping methods.
• Volatility Crush & Earnings Plays
  Explore the phenomenon of implied volatility crush, pre- and post-earnings strategies, and the nuances of event-driven trades in the Canadian market.
• Options Stress Testing & Risk-Adjusted Returns
  Explore practical stress testing approaches and evaluate risk-adjusted returns for your options strategy, covering realized vs. implied volatility, Sharpe Ratio, VaR, CVaR, and scenario analysis.
• Iron Condors, Butterflies, and Other Volatility Spreads
  Explore versatile volatility strategies like iron condors, butterflies, diagonals, and calendar spreads in options trading. Learn how to structure multi-leg trades, analyze market sentiment, and leverage implied volatility within Canadian regulatory frameworks.
• Additional Resources and Concluding Remarks
  Explore essential tools, regulatory insights, practical tips, and recommended readings to deepen your mastery of volatility strategies under Canadian market conditions.