Once Bitten! A Bitcoin Podcast. cover image

@MorgenRochard - Leaving Fiat Life To Find #Bitcoin And Doing What You Love! #290

Once Bitten! A Bitcoin Podcast.

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Option Market Makers Aren't Hedging Properly

In 2008, the VIX spiked and went to like 90 or something like that. So when people are options traders, they tend to be long volatility. They pay to own these options and you have something called decay. In a 2008 style scenario where the VIX bikes, they make money just by holding those options. But in 2009, if you weren't able to get out of these options in time, now you had very high priced options on your books.

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