Suppose the S&P index options demonstrate a left-skewed smile. You are an options trader and believe that
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Suppose the S&P index options demonstrate a left-skewed smile. You are an options trader and believe that the smile is steeper than it should be because the market has overestimated the extent of crash risk. You believe that the market will correct its view within the next month. What options trading strategy would you adopt?
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If in your view the skew is excessively steep toda...View the full answer
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