The options markets deteriorated during the 2/5/18 crash with markets widening and posted size on the markets falling and cost options traders plenty.
If you found option trading challenging last week, you were not alone. We have heard complaints from our clients about wide markets and low liquidity. Here are the numbers and why.
Volatility Views gave us a good chance to discuss our philosophy on the drivers of volatility. Currently, our research is telling us that the component to ETF ratio indicates that volatility has a good chance of rising due to increasing implied correlation.
ORATS ETF Component Report News: We have been seeing low implied volatility correlation in the XLB Materials components over the past days and today it is becoming clear why. A massive merger between DuPont and Dow Chemical is reported in advanced stages. Both are up > 10% today driving the beleaguered XLB up 3%.