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What Is the Concept of “Volatility Arbitrage”?

Volatility arbitrage is a trading strategy where a trader attempts to profit from the difference between an option's implied volatility (market expectation) and the expected future realized volatility of the underlying asset. A trader might sell an option if they believe implied volatility is too high and buy an option if they believe it is too low, while simultaneously maintaining a Delta-neutral hedge.

What Is the ‘Realized Spread’ and How Is It Used to Estimate the Adverse Selection Cost Component?
What Is the Difference between Impermanent Loss and Actual Realized Loss for a Liquidity Provider?
What Are the Legal Implications of Profiting from a 51% Attack via Short-Selling?
What Is the Difference between Expected Price, Executed Price, and Market Price in a Trade?