From my understanding in a BSM world you can make a bet on volatility using options and delta hedging with the underlying.
If you think realized volatility of the underlying will be higher than the volatility implied by the option price you can buy the option, delta hedge with the underlying continuously and your PnL at the end is determined by the difference between IV & RV.
There's a pretty big assumption made in most of the papers I've read though - that volatility is constant. It's pretty clear that in reality volatility isn't a constant and can fluctuate over the course of the option duration.
My question is: how does a stochastic volatility affect the PnL when delta hedging?
Wilmott says in chapter 12.7 of his book: 'The argument that the final profit is guaranteed is not affected by having implied volatility stochastic, except insofar as you may get the opportunity to close the position early if implied volatility reaches the level of actual.'.
Can someone explain this to me? Seemingly he's saying that it doesn't actually matter whether volatility is constant or stochastic in order to profit from a difference in RV vs IV, but intuitively this doesn't make sense to me - if volatility is high in the earlier period (with more time to expiry and hence a lower gamma) and then low later when the gamma is higher, it seems that the final PnL would be affected significantly.