> But I never trade directional or have any market outlook
I'm an amateur to all of this, but isn't trading volatility the same as directional trading? Volatility goes up and down just like price goes up and down, isn't it just one time-derivative way, what's really the difference? Why not trade on volatility of volatility?
You can trade volatility of volatility (e.g. VIX options), or even volatility-of-volatility-of-volatility -- except the greater the degree of derivative, the fewer options you have to trade using publicly-listed securities. Also, even if there are publicly-listed securities, the lesser the liquidity and thus the harder/impossible to get in-out of trades.
This can work if you are a big firm with access to private contractual derivatives, but you would still suffer from the 2nd problem: liquidity.
I'm an amateur to all of this, but isn't trading volatility the same as directional trading? Volatility goes up and down just like price goes up and down, isn't it just one time-derivative way, what's really the difference? Why not trade on volatility of volatility?