Daily Options Report

Congrats to Diamodbacks middle reliever Clay Zavada for his Outstanding Achievements In The Field of Lip Hair. Or something like that. Yes,  he has been honored by the American Moustache Institute.

Wearing a $3 crown and his dapper, trademark handlebar mustache that terrorized Major League hitters during the 2009 Major League Baseball season, Arizona Diamondbacks relief pitcher Clay Zavada received the American Mustache Institute’s 2009 "Robert Goulet Memorial Mustached American of the Year,” presented by Quicken®.

In front of a crowd of roughly 1,000 at ‘Stache Bash 2009 -- a benefit for Challenger Baseball featuring the legendary John Oates -- Zavada accepted the Goulet award which recognizes the person best representing or contributing to the Mustached American community over the past year.

It's an outstanding achievement. Who amongst us didn't grow up throwing a baseball against a wall and dreaming of one day winning a Robert Goulet Award in something.

Anyway, just to clarify, I'm not advocating going out and growing a handlebar moustache loading up on pumped volatility, nor am I doing that myself. Just pointing out though that a call buy as a way to go bullish into a volatility spike is not a bad idea, but very much pending specifics of the trade and what you're trying to accomplish.

What am I doing? In general I bought some gamma at near month and near money strikes and shorted gamma at above market strikes. I do not think volatility is a buy per se, but I also don't anticipate we sit for very long at nearby levels. Of course we're already a bit off them, so it's not that tough to say what's already happened. If in fact we lift, volatility will indeed get crushed, but the crush figures to be worst at strikes that are currently OTM. That's what I want to be short.

I realize it's tempting to short pumped puts here, and I am bullish for the moment. And if it works, there's certainly no arguing a good trade. The risk part of that trade is pretty elevated right now though too as futher dippage will likely be accompanied by an even bigger volatility ramp. I'd rather just sell put spreads in that case and know my downside exposure.