This video derives from the chapter 12 of the Book Quantitative Finance by Paul WIlmott. The video explains how to make money by trading on the differences between actual and implied volatility. One choice you have to make is whether to hedge using implied or actual volatility; they have different consequences in final profits and how you get there.
How to Arbitrage Volatility
Securities & MarketsJuly 27, 2012 · 1 min read