• Earnings | May 15, 2017, 1:56 PM

    Earnings Week of 5/15/2017 - 5/19/2017

    Earnings Week of 5/15/2017 - 5/19/2017

    Things are starting to taper a bit, but not too much as there are several companies with Weeklys reporting next week.  The stocks below have Weeklys available for trading and the numbers represent the last 12 quarters of one day price reactions to their announcement.  As always double check the dates as none have been confirmed.

  • Market News | Strategy | May 15, 2017, 8:12 AM

    Volatility and Holidays Are An Opportunity to Sell Premium

    Volatility and Holidays Are An Opportunity to Sell Premium

    Whenever we come upon a holiday it's time to take a breath and step back.  But as option traders, there is no such break as we are mindful of volatility and the option decay that constantly exists in these derivatives.  Time is a critical component of option value, and when there are fewer days to trade an option the decay becomes a detriment to the option buyer.  Over the next couple of weeks, the markets will be closed for a full session (Memorial Day).  Hence, over the next[...]

  • May 14, 2017, 4:30 PM

    The Weekly Options News Roundup – 5/14/2017

    The Weekly Options News Roundup – 5/14/2017

    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.      Bill Brodsky’s Look Back After leading CBOE for 20 years as Chairman and CEO, Bill Brodsky retired from the exchange two months ago. During his tenure as Chairman and CEO, Bill oversaw a number of major initiatives at CBOE such as the migration of the traditional floor-based trading to an[...]

  • May 13, 2017, 9:29 AM

    Weekend Review of Russell 2000 Options and Volatility - 5/8/2017 - 5/12/2017

    Weekend Review of Russell 2000 Options and Volatility - 5/8/2017 - 5/12/2017

    The dominance of large cap stocks in 2017 continued last week as the Russell 1000 (RUI) lost 0.41% while the Russell 2000 (RUT) was down over 1%.  This widens the performance gap for 2017 to put RUI in a 4.8% lead relative to RUT. The combination of small cap underperformance and VIX remaining at low levels resulted in the CBOE Russell 2000 Volatility Index (RVX) to VIX ratio to climb back to the 50% range.  On Monday one daring soul put on a high dollar risk, low dollar reward trade[...]

  • VIX | Trader Talk | Trade Ideas | May 13, 2017, 9:24 AM

    Weekend Review of Volatility Indexes and ETPs - 5/8/2017 - 5/12/2017

    Weekend Review of Volatility Indexes and ETPs - 5/8/2017 - 5/12/2017

    This time last week we were all pretty certain that the final round of the French election was a done deal.  Short term SPX implied volatility wasn’t taking any chances with VXST closing last Friday at 11.40.  With the election outcome going as expected VXST got a little crushed and the shape of the VXST – VIX – VXV – VXMT curve moved back to contango.  Both the S&P 500 and VIX dropped last week, as the number of potential stock market land mines over[...]

  • VIX | Trader Talk | Trade Ideas | May 13, 2017, 9:17 AM

    Weekend Review of VIX Futures and Options - 5/8/2017 - 5/12/2017

    Weekend Review of VIX Futures and Options - 5/8/2017 - 5/12/2017

    VIX was slightly lower on the week despite the S&P 500 dropping as well.  The near dated futures worked lower with May finishing Friday at premium of just over 0.80 as that contract goes off the board this coming week.  From August and beyond the futures were actually higher which creates a pretty steep curve below. On Tuesday, we got what I am going to refer to as a MOAVCS (Mother of all VIX Call Spreads).  Near the end of the day a trader came in and purchased at least 195,000[...]

  • May 10, 2017, 2:05 PM

    SPXW Weekly Options A.D.V. Rises above 500,000, as 3rd Friday SPXW Options Now Are Available

    SPXW Weekly Options A.D.V. Rises above 500,000, as 3rd Friday SPXW Options Now Are Available

    By Matt Moran This week I received inquiries about the trends in options volume. The large-sized SPXW Weekly options have successfully seen volume growth over each the past seven years. Key points about SPXW Weekly options include – VOLUME. Average daily volume (a.d.v.) in the first four months of 2017 was 500,964 contracts, (up 30% over the a.d.v. for the full year of 2016; see Exhibit 1 below); MANY EXPIRATIONS. SPXW Weeklys options have expirations on ten upcoming dates in May[...]

  • May 9, 2017, 9:34 AM

    Millennials Can Secure a Financial Future For Their Kids, Too

    Millennials Can Secure a Financial Future For Their Kids, Too

    Last week we talked about how the Millennials can get a jump on securing their financial future.  It can be as easy as putting a small amount of money aside regularly each week and month.  Today's article talks about being proactive and saving for the next generation.  It is mission critical to take an aggressive role to get them off to a good start, as the financial future for them and our country looks murky. With the financial constraints that may be encountered down the road,[...]

  • VIX | Trader Talk | Trade Ideas | May 7, 2017, 7:24 PM

    Weekend Review of Russell 2000 Options and Volatility - 5/1/2017 - 5/5/2017

    Weekend Review of Russell 2000 Options and Volatility - 5/1/2017 - 5/5/2017

    Large cap stocks widened the performance spread with small cap stocks with the Russell 1000 (RUI) gaining and the Russell 2000 (RUT) dropping a bit last week.  For the year, RUI is up 7.13% while RUT is up 2.94%. VIX dropped last week, but the CBOE Russell 2000 Volatility Index (RVX) was higher.  Admittedly, RVX was up only 0.02 but when combined with the VIX drop of 0.25 the result is a slight widening of the spread between RVX and VIX.  One trader put on a position late Friday[...]

  • VIX | Trader Talk | Trade Ideas | May 7, 2017, 7:21 PM

    Weekend Review of Volatility Indexes and ETPs - 5/1/2017 - 5/5/2017

    Weekend Review of Volatility Indexes and ETPs - 5/1/2017 - 5/5/2017

    The chart below may be one of the final references to the French Election which came to an end this weekend.  Note VXST, which reflects the IV of very short term SPX options was elevated going into the weekend.  I don’t think it is too much of a stretch to say that a quick drop in VXST may be in the cards come Monday morning.  SKEW dropping dramatically last week may be the last bastion of higher volatility dropping.  This happened despite VIX dropping which makes the[...]

  • May 7, 2017, 4:30 PM

    The Weekly Options News Roundup – 5/7/2017

    The Weekly Options News Roundup – 5/7/2017

    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.      CBOE Bats New York Office Squares Off On Thursday, CBOE-Bats’ New York office participated in the Bloomberg Square Mile Relay, where runners took a unique one-mile path around the city’s Financial District.  One of CBOE’s two teams finished in 9th place out of a total of[...]

  • VIX | Trader Talk | Trade Ideas | May 6, 2017, 9:57 AM

    Weekend Review of VIX Futures and Options - 5/1/2017 - 5/5/2017

    Weekend Review of VIX Futures and Options - 5/1/2017 - 5/5/2017

    VIX managed to (briefly) put in a post Great Financial Crisis low hitting 9.90 on Monday and sneaking in a 9.99 low on Friday as well.  Full disclosure, I didn’t even see the 9.99 print on Friday, but then again, we are getting conditioned against getting too excited when VIX dips below 10.  Worth noting below is the bigger drop in the May future when compared to spot VIX.  Typically, we see this closer to expiration, but when there’s very little on the horizon that the[...]

  • Earnings | May 5, 2017, 1:55 PM

    Earnings Week of 5/8/2017 - 5/12/2017

    Earnings Week of 5/8/2017 - 5/12/2017

    Things are starting to taper a bit, but not too much as there are several companies with Weeklys reporting next week.  The stocks below have Weeklys available for trading and the numbers represent the last 12 quarters of one day price reactions to their announcement.  As always double check the dates as none have been confirmed.

  • May 4, 2017, 3:29 PM

    What's Trading: AIG Straddles and Strangles into Earnings

    What's Trading: AIG Straddles and Strangles into Earnings

    AIG options were active into expiration. There's been speculation about their search for a new CEO as well as potential stock buyback plans. AIG beat on the top and bottom line during an earnings cycle that has generally been quite strong. They also announced a $2.5 billion repurchase plan. We take a look at the Weekly ATM straddle as well as a June OTM strangle going into and coming out of the "event". Full Video below:

  • May 3, 2017, 3:47 PM

    What's Trading: Allstate (ALL) Call Spread into Earnings

    What's Trading: Allstate (ALL) Call Spread into Earnings

    Long high volatility premium? Learn how verticals reduce exposure to high or low volatility options. ALL trader succeeds in managing high volatility option purchase by offsetting position with selling high volatility out-of-the-money option.   $ALL #Allstate