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VolMaster
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Is Bitcoin volatility a "BUY" or "SELL"?

December 6th, 2017, 6:26 pm

Hi,

1 month implied volatility of Bitcoin is trading about 110% (well, 105/115 quoted on the option chain), And I, as a volatility trader, ask myself whether this is a buy or a sell. How can one asses the risk reward trading volatility with this kind of asset? backed by nothing but expectations and herd behavior it's basically impossible to quantify risk-reward in trading it.

Your thoughts? 
 
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Cuchulainn
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Re: Is Bitcoin volatility a "BUY" or "SELL"?

December 6th, 2017, 6:45 pm

That's what I said a few days ago, and someone rudely told me to STFU.

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VolMaster
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Re: Is Bitcoin volatility a "BUY" or "SELL"?

December 6th, 2017, 7:30 pm

During my years as FX volatility trader I've traded some weird stuff, and the oddest pairs ever, but don't know how to start analyzing this as an asset. moves are pretty much random, gaping and irrational. 
 
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mtsm
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Re: Is Bitcoin volatility a "BUY" or "SELL"?

December 7th, 2017, 2:28 am

Are you talking about options on deribit? I don't think it is a very significant product as yet. It's a very immature product on a small exchange. Look at the open interest for these contracts. I assume you are talking about the Dec-29 expiry.

Not sure the implied vol is very meaningful and it's probably so strongly distorted by the huge premium on it. 

If it wasn't for the introduction of the futures contracts on CBOE on coming Sunday and the CME the week thereafter, I would say it is a clear sell the sh!t out of it.  
 
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bearish
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Re: Is Bitcoin volatility a "BUY" or "SELL"?

December 7th, 2017, 2:49 am

 Beanie Babies
 
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VolMaster
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Re: Is Bitcoin volatility a "BUY" or "SELL"?

December 7th, 2017, 3:05 am

Maybe a bubble but god knows where it will pop... I guess in option market people are looking to buy the upside so a highly skewed smile is appropriate, though at these levels the downside look pretty scary  
 
londonoiltrader
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Re: Is Bitcoin volatility a "BUY" or "SELL"?

December 13th, 2017, 11:35 am

100% vol for bitcoin seems cheap to me 
 
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MartinGale7
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Re: Is Bitcoin volatility a "BUY" or "SELL"?

December 13th, 2017, 12:06 pm

Where are you trading options on Bitcoin?
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