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Hi @Kogelet, welcome once more. Nothing to add to @Yowster, despite maybe that these charts are also useful to compare todays straddle/calendar premium to previous cycles (which is possible because you compare the premium in terms of/relative to the underlying's price). While a cheap relative value will not give you any guarantee that it will not drop further (see FDX recently, for example), it will give you a better overall picture and help determine useful limits for entry and exit. This thread will explain more details at length:

@KogeletFor straddle RV, its the price of the ATM straddle divided by the stock price (its also called the implied move when you are really close to earnings day). RV is a great technical measurement for our trades because it encompasses both IV increases and theta decline. When looking at pre-earnings straddles, all RV charts will decrease on average (there will be days when it goes up, but in general the average line always goes down). Its the downward slope that is important - things with a steeper slopes have little RV increases heading into earnings to offset the theta decay, and things with flatter slopes have IV increase that counteract a lot of the theta decay. For our hedged straddle trades, we like to see the short strangle credits offset the typical RV decay - that way if we don't have gamma gains on stock price movement, we usually see the short strangle credits cover the straddle decline (or many times the short strangle credits exceed the long straddle decline)

You could do a spread, but that caps your gains, and as long dated as I go (typically 90 days), I want to be able to capture as much gain as possible, particularly in case if it ever does go against me. And yes, I am primarily relying on the negative roll -- "relying" is a strong word though -- just go look at the chart. Other than April 2010 (28% loss) and mid July 2011 (56% loss), there has never been a 90 day period that the VXX did not lose money. Those are the WORST case possible results too -- requiring an enter on the absolute lowest spot VXX had been in a while and exiting at the highest. Average return? About 20% per month. How do you do this? Simple, buy 90 days out, as soon as you hit a 10% plus return, sell and roll to another 90 days out. Frequently I'll wait for a small pop. For instance, I' just sold my September VXX puts today, after holding for less than a week, for a 16.9% gain. I'll wait for a pop, then enter another 90 days out. As always, position sizing is key. I'm fully expecting, sooner or later, a 20-40% negative hit. But let's look at a $10K investment, assuming a fifty percent negative hit one month a year. Even if I am only getting 10% per month, I end up WAY ahead. 11/12 months, I get $1,000.00. One month I lose $5,000. That's a net gain of $6,000 on a $10,000.00 investment -- or 60% on the year. Even if I have TWO fifty percent losses on the year, I still break even. (10/12 10% gains = $10K 2/12 50% losses = -$10K). And I've been averaging a LOT higher than 10% per month. (Since I started doing this, I'm averaging 19% per month). Do I want to allocate more to this trade? Sure it seems a GREAT idea to put 50% of my portfolio on it. But I wont do that. I NEVER allocate more than 10% of a portfolio to a trade. And if you keep your position sizes constant, the surprise result doesn't hurt. Heck, even if you had a 100% loss one month, and a 10% gain the other 11 -- you STILL END UP AHEAD. This negative roll thing is great. Again, if anyone sees problems with this, please let me know, I'm always interested in improving strategies. For about the last nine months though, I feel like I'm shooting fish in a barrel.