Vol-Curve Trade
Any option strategy that expresses a view about the SHAPE of the volatility surface rather than its level. Vol-curve trades include calendar spreads (term-structure shape), skew trades (downside vs. upside IV), and butterfly-of-butterflies structures (smile curvature). The common feature: the trade is constructed to be vega-neutral or near-neutral at the surface level while having concentrated exposure to a specific surface deformation. Vol-curve trades are the bread-and-butter of professional vol-trading desks and increasingly appear inside structured products sold to retail under various marketing labels.
Lessons that use this term
Related terms
American Option · Asian Option · Barrier Option · Basket Option · Butterfly Spread · Calendar Spread
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