The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “What is long volatility?” Long volatility can just be described as an options trading strategy or a trading strategy in general that profits from an increase in volatility. When someone says that they’re long volatility, that basically just means that they’ve bought into a volatility product that would profit if implied volatility in the underlying shares or the general market goes up in volatility. If I’m in a long volatility strategy that could be a long strangle, long straddle, it could be long calls, long puts as single option contract trades, these trades all profit from an increase in volatility in the market. One of our favorite long volatility strategies is to use a VIX hedging strategy whereby we use a couple of combinations of contracts to go long the VIX and that helps with our positions because we give ourselves some long volatility exposure in case we get into a