Put/call varning

Det var det rödaste jag skådat på väldigt länge! 

/roitto

Life is a tragedy for those who feel, but a comedy to those who think. (Horace Walpole )

can be more to it than that,

--------------------------------------------------------------------------------------------------------

"It's tough to explain this divergence in terms of the characteristics of the indices themselves. My  take is that a chunk of the current low level of SPX and NDX volatility is due to heavy premium selling on both the indices and on their major component stocks. I don't believe option selling is nearly as prevalent on the RUT, particularly since few players would want to be selling premium on the component stocks and option liquidity is sparse or non-existent on many of the components. RUT option activity is heavily concentrated in the iShares Russell 2000 Index Fund (IWM: sentiment, chart, options) , and my feeling is they are long IWM put premium to hedge small-cap long positions.

The bottom line thesis here is that volatility on the large-cap indices is cycling lower than it otherwise would due to heavy option premium selling, while smaller cap volatility is holding at higher levels due to the absence of a premium selling "push down." 

--------------------------------------------------------------------------------------------------------

schaffers thoughs on volatility