Now that the low-volume summer blahs are (probably) over, maybe we’ll see some genuine premium hitting the options boards for the rest of the year, rather than being concentrated only in energy and commodities. So we wondered, would there be any edge in taking directional trades based solely on extreme volatility readings? Or more precisely:

If you really want to get short XLB, and don’t want to pay through the nose (either in terms of theta or vega), a simple put diagonal spread will act a lot kinder to you. For example, you could...

Reader S. V. raises an interesting question:

I am working on scenarios to trade the contra-ultra indexes like SDS to take advantage of either a combo spread (selling puts and buying call) or another method to take advantage of price movements while reducing risk. Any thoughts?