• Market News | Trader Talk | Trade Ideas | Jan 16, 2017, 9:08 AM

    Block Trade Analysis - XLI Bull Put Spreads from Friday

    Since the election of Donald Trump the stock market has been on a bullish run.  One sector that may benefit from the new administration is the industrial sector, whether that is due to an increase in infrastructure spending or through an increase in domestic manufacturing.  On Friday, last week there were a couple of bullish option trades that came into the Industrial Selector Sector SPDR Fund (XLI) ETF option market worth taking a look at. Before discussing these two trades I wanted to[...]

  • VIX | Election & VIX | Jan 16, 2017, 6:53 AM

    Contrasting SPX and VIX - MLK Weekend 2016 and 2017

    2016 was a year lots of people would like to forget for a variety of reasons.  Personally, I had a great year and didn’t know any celebrities who will be celebrated posthumously at the various spring award shows.  If we go back 52 weeks to MLK weekend in 2016 the markets were about as opposite as they could be relative to where we are today. As a quick reminder, many market participants were nervous going into 2016, we had just experienced our first interest rate hike in years and[...]

  • Market News | Election & VIX | Jan 15, 2017, 4:00 PM

    The Weekly Options News Roundup – 1/15/2017

    The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX Index and volatility-related articles from print, broadcast, online and social media outlets. Data Exchange CBOE announced on January 6, that all its historical market data formerly operated by Market Data Express (MDX) has been migrated to the CBOE Livevol Data Shop.  This action combines a comprehensive source of options, equity and exchange-traded fund (ETF) data with the customizable services offered[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Jan 15, 2017, 8:33 AM

    Weekend Review of Volatility Indexes and ETPs - 1/9 - 1/13

    There are two lines below although it may appear that there is only a purple line for parts of the VXST – VIX – VXV – VXMT curve.  In a round about way I’m saying not a lot happened in the world of S&P 500 option volatility last week. What really stands out on the table below is the price action of VVIX which rose over 12 points to finish the week over 90.  There were large buyers of February VIX call options last week which contributed to the rise[...]

  • VIX | Trader Talk | Futures | Trade Ideas | Jan 14, 2017, 5:43 PM

    Weekend Review of VIX Futures and Options - 1/9 - 1/13

    Last week VIX managed to finish the day below the 2016 closing low (11.27) twice.  If it were only Friday’s close I’d throw an asterisk in there for the three-day weekend effect, but there’s no holiday excuse for the Wednesday close of 11.26. This past week they (whoever ‘they’ are) couldn’t get enough of February VIX Calls.  On Friday, paper bought over 60,000 VIX Feb 21 Calls for 0.49.  On Thursday, there were three block trades of[...]

  • Weekend Review of Russell 2000 Options and Volatility - 1/9 - 1/13

    It was a quiet week for the markets with a lack of economic data, the earnings calendar being light (that changes next week) and our president elect speaking to the press but not making statements to impact the equity markets too much.  The result was a 0.35% gain for the Russell 2000 (RUT) and a drop of 0.04% for large cap stocks as represented by the Russell 1000 (RUI). The next chart is a regular feature in this space.  I decided since the premium of the CBOE Russell 2000[...]

  • Market News | Jan 12, 2017, 3:59 PM

    Earnings Week of 1/17 - 1/20

    It's a holiday shortened week, but it's also a week where earnings season starts to kick into high gear.  As always the data below is based on the last three years of earnings results unless the ticker is in italics.  The columns show the biggest rally, biggest drop, average move, and what the stock did last quarter in reaction to earnings.  Finally, double check the earnings dates as not all were confirmed.

  • VIX | Trader Talk | Trade Ideas | Jan 11, 2017, 2:38 PM

    Getting the 2017 Party Started

    The cliffhanger last time involved the $6.50 put for UVXY expiring this Friday, January 13th.  I had sold twenty contracts on January 4th for premium received of $0.18 each.  It turns out that I got nervous about this put when UVXY touched 6.57 later that day.  I knew I had time, but I also believed that the nature of UVXY was not on my side, and I began plotting to trade out of these options and eventually replace them with more advantageous ones. It turns out I didn't have to wait[...]

  • Market News | Jan 10, 2017, 4:21 PM

    33rd Annual CBOE RMC Set for March 8 - 10

    As we turn to a New Year, we all look forward to certain things.  For me, near the top of that list is the spring edition of CBOE’s Risk Management Conference (CBOE RMC).  We now have three versions of RMC with the US version taking place in a warm weather venue each spring for the past 32 years.  The 33rd Annual CBOE RMC will be held in Dana Point, California at the Monarch Beach Resort from March 8th to March 10th.  Although historical information is never a guarantee[...]

  • Market News | 2016 Recap | Jan 10, 2017, 12:00 PM

    Five Volatility Market Lessons from 2016

    To be successful in any field we all need to keep learning.  My job involves staying on top of all things index and volatility related which means I am always gaining new insights about the markets.  Looking back at 2016, VIX settled into lower levels after starting the year hitting the mid-20’s as the stock market sold off.  Despite the relatively tame behavior from VIX, there were some lessons to be learned last year. Number 1 – Non-Fundamental Volatility Spikes Before[...]

  • Market News | Strategy | Jan 9, 2017, 4:53 PM

    Technical Resistance in AMZN?

    It's pretty clear that AMZN has been in a buy mode recently.  It is possible that we do see even higher prices in this stock.  I do however want to throw up a caution flag here for a couple of reasons.  First, we have met the initial upside targets off our last trade setup in this stock.  Second, we are moving into a couple of key resistance clusters defined by Fibonacci price relationships.  They come in at 801.31-807.55 and then 813.95-819.00.  Third, I'm seeing a[...]

  • VIX | Futures | 2016 Recap | Jan 9, 2017, 3:26 PM

    Record Volume and Open Interest in 2016 for CBOE Index Products

    CBOE index products continue to attract growing interest from investors who wish to manage the income and volatility in their portfolios. A recent press release by CBOE Holdings noted that -- “… Several trading records were set [in 2016]. Total volume and average daily volume (ADV) in index options trading at CBOE reached new all-time highs for the fourth consecutive year in 2016 with 430.7 million and 1.7 million contracts, respectively, each up 6 percent from 2015. Total volume and[...]

  • Education | Jan 9, 2017, 10:57 AM

    Master the Four Fears of Trading - Part 2

    Last week we discussed two of the four fears of trading, specifically the 'fear of missing out' and the 'fear of loss', today we'll discuss the 'fear of being wrong' and the 'fear of letting a gain turn into a loss'.  Famed trader psychologist Mark Douglas talked about these fears in his stellar book 'Trading in the Zone'.  As traders and investors we all become gripped by the violent reactions of our own emotions. There is nobody who is immune to emotional responses to changes in wealth. [...]

  • VIX | Education | Jan 8, 2017, 4:00 PM

    The Weekly Options News Roundup – 1/8/2017

    The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX Index and volatility-related articles from print, broadcast, online and social media outlets. New Year, New Outlook   The beginning of a new year is an ideal time for investors to assess the state of their portfolios. Besides eating better, joining the health club and cleaning out the closet, here are some resolutions options investors may want to add to their list in 2017. “7 New Year’s[...]

  • Market News | Jan 7, 2017, 5:09 PM

    Weekend Review of VIX Futures and Options - 1/3 - 1/6

    With the stock market kicking off 2017 on a bullish note VIX tested the 2016 closing low finishing the week 0.05 above last year’s low of 11.27.  The futures followed suit, especially the January contract which goes off the board two days before the 45th man to ascend to the presidency does so on January 20th. I was checking in on the Weekly VIX futures and options activity last week and came across an interesting set of numbers.  The chart below highlights the at-the-money[...]