Despite the fact that they are heavily traded, discussed in every derivatives text, and necessary to aligning implied volatilities with volatility expectations, volatility trades such as straddles, strangles, and option/asset combinations have received scant attention in the finance research literature. Using a unique data set for the Eurodollar options market, the trading and structure of seven volatility trades-straddles, strangles, option/asset combinations, guts, butterflies, iron butterflies, and condors-are examined. We find that both traders' choices among the seven strategies and the designs they choose for the individual strategies indicate that volatility traders seek designs with (1) low deltas, (2) low transaction costs, and (3) high gammas and vegas. Among other things, these three presumed objectives explain why butterflies, guts, and condors are rarely traded; covered call and put writing is rare; and straddles are the most popular volatility trade. These objectives also explain the usual design of straddles, strangles, and asset/option combinations and the straddle-strangle choice. Our data also indicate that, in constructing their spreads, traders rely on Much of this research was completed while Ederington was Visiting Professor of Finance at the University of Otago and at Singapore Management University, whose support of this research is appreciated. We have benefited from the comments of an anonymous referee, Christine Brown, Timothy Crack, and participants in finance workshops at the