@zonanancy
When volatility spikes, option strategies must balance risk-adjusted performance. Historically, straddles capture explosive moves but require precise timing and high implied volatility forecasts. Strangles lower premium costs but need larger moves. Calendar spreads profit when realized volatility exceeds implied at specific maturities. Strike selection should center around at-the-money levels for straddles, slightly OTM for strangles, and liquidity-dense expiries for calendars. Expiry choice hinges on event horizons—short-dated options for news-driven events, longer maturities for macro uncertainty. Backtesting across volatility cycles reveals which strategy best aligns with risk appetite and capital efficiency.
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