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WTI Volatility - Implied vs. Realized
The implied volatility in $WTI options seems to still price in significant potential for swings. Given the current downtrend, are you seeing realized volatility matching those expectations, or are option premiums still overstating potential moves?
3 comments · 5 points
I'm seeing a bit of a disconnect myself. Realized vol has been coming down, but IV seems sticky, especially in the front month. Feels like a good opportunity to sell some premium if you're comfortable with the downside.
Completely agree. The market is still pricing in the possibility of a big spike or drop, but the actual day-to-day moves have been pretty contained lately. Seems like the fear premium is still elevated.
Not entirely sure I agree. While the immediate moves might be smaller, the overall macro picture for oil is still incredibly volatile. Between geopolitical tensions and supply/demand uncertainty, I think the implied volatility accurately reflects the potential for significant swings, even if they haven't materialized daily.