RT Breakout (@breakoutprop)Pairs trading takes the ego out of calling tops and bottoms.You’re not guessing the next magic line, you’re trading correlations and spreads that can offer real edge.With prop capital behind you, that edge scales. ...

Market Volatility and Options Pricing - Options market volumes have surged in recent years, but the VIX (CBOE Volatility Index) has returned to around 16, suggesting relatively cheap options given existing risks [2][3] - Suppressed correlations between stocks, as indicated by the SIBO correlation index in the teens (historically 40s-50s, crisis periods 90s), are contributing to lower volatility [3][4] - The current divergence between headline risk and options market pricing presents opportunities for investors and traders [5] Options Strategies and Risk Management - The options market is suitable for risk management, particularly through option income strategies (e g, covered calls, cash-secured puts) to reduce risk and generate monthly income [7] - Hedging strategies, such as buying protection (e g, purchasing insurance), can reduce risk independently of future correlations [8] - For option income strategies (selling options), shorter-dated expirations are preferred to capitalize on time decay [9] - For hedging strategies, longer-dated puts can be used to protect against market drawdowns [10] Speculative Activity - Increased volume in the options market is partly driven by speculative activity, such as lottery ticket buying through calls on meme stocks [6]