>>21090650>>21090668This is an extremely powerful idea, because it's collateralized debt. Unfortunately, they're private equity so there's no way to invest in them.
>>21090667>Would you say that high premiums indicate that market makers expect a move to the upside?Not at all, no. MMs have to remain neutral, if not due to obligations, then to hedge their risk. Think of volatility as "scale"; it doesn't tell you the direction of movement, just to expect a lot of it.
(if a trend is consistent (up or down), I've noticed that volatility tends to be low; usually volatility increases when there is a local top/bottom)
Consider picrel; these are the breakevens of buying an ATM straddle on NVDA for each expiry up to a year in the future. Notice the parabolic shape. This is a textbook example of standard deviation and random motion. They're basically all centered around the current price, and the size of the arc depend on the IV. If you found another company trading at 126.50 but with less volatility (say WMT or KO), it would have the same characteristic arc, though much narrower.
Another thing to notice is that the arc is a little bit thicker around the left - this represents near-term volatility mostly due to the upcoming ER.
Leveraged ETFs are the same but different. TQQQ is the same as QQQ, just with different ATR and volatility baked in. (In fact, until around 2007 or 2010 or something like that, you could actually make 1-2% per day consistently by shorting both SQQQ and TQQQ at the end of the day due to tracking error but the market eventually figured this out)
