A Tour Around the Options World with SpotGamma's Brent Kochuba
Excess Returns
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The Importance of Explicit Volatility
The VIX has a waiting to what we call at the money contracts. And so if you look at the way that volatility is priced, there's this skew or a smile in the way that implied volatility is priced over various contracts. So on your screen here on the X axis are the strikes for the S&P 500. In red is on the Y axis is the implied volatility for each one of these strikes.
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