Volatility Arbitrage (Master Option Trader Series): Exploiting Mispricings on the Volatility Surface (Paperback) (ISBN-13: 9798251459548)

Most traders who call themselves volatility arbitrageurs are running directional volatility positions dressed in the language of arbitrage. This book corrects that. Completely. Volatility arbitrage is not about predicting whether volatility will go up or down. It is about recognizing when one part of the volatility surface is mispriced relative to another and systematically extracting that spread before it closes. That shift from absolute to relative is the dividing line between retail options trading and institutional volatility work.
Volatility Arbitrage, Book 2 of the Master Option Trader Series, teaches you to execute that framework at an institutional level. Calendar spreads, Diagonal structures, Ratio trades, Dispersion and correlation arbitrage, multi-expiration vega risk, and the full mechanics of the VIX term structure including a forensic case study of the August 5, 2024 backwardation event, the most extreme term slope reading outside 2008 and COVID.

Inside:

• The Volatility Surface: geometry, curvature, slope, and distortion signals
• Calendars, Diagonals, and Ratio spreads built for relative-value execution
• Dispersion and Implied Correlation Arbitrage, the institutional framework
• VIX Term Structure convergence trades: entry, sizing, and exit discipline
• Eight hidden killers of multi-expiry positions, and how to recognize them before they cost you
• The Vol Arb Operating System: pre-trade workflow, shock matrix, and survival-probability sizing
• Monte Carlo Surface Simulation for path risk evaluation

Theta is not the edge. The edge is the mispricing. This book teaches you to find it, size it, and extract it and to sit out when conditions make the trade dangerous. For traders who finished Book 1 and are ready to move from convexity to the surface.


Author: Tony Pelz
ISBN-13: 9798251459548
Publisher: Independently Published
Language: English
Published: 03/10/2026
Pages: 198
Format: Paperback
Weight: 0.60lbs
Size: 9.00h x 6.00w x 0.42d