• Market News | VIX | Oct 30, 2016, 8:59 AM

    Weekend Review - VIX Futures and Options - 10/24 - 10/28

    Weekend Review - VIX Futures and Options - 10/24 - 10/28

    VIX had a pretty stellar week, aided by the new on Friday, to finish over 20% higher. Spot VIX may be buying into a new scandal, but the futures did not.  The curve is as flat as it has been in months which tells me traders expect this move in VIX to be short lived. We are all aware that VIX made a little move on Friday as new of a new chapter in the Clinton email saga commenced.  As the week came to an end on trader took advantage of a rise in VIX and the December futures[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Oct 29, 2016, 1:49 PM

    Weekend Review - Russell 2000 Options and Volatility - 10/24 - 10/28

    Weekend Review - Russell 2000 Options and Volatility - 10/24 - 10/28

    Last week the Russell 2000 (RUT) took it on the chin dropping 2.6% while the large cap focused Russell 1000 (RUI) was down only 0.80%.  For the year RUT still has a small lead, up 4.55% versus up 3.98%, but that could quickly disappear next week. The volatility spike that came Friday afternoon did what most surprising events do to the relationship between the Russell 2000 Volatility Index (RVX) and VIX.  The ratio dropped, but is still above average for 2016. The week ended[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Election & VIX | Oct 29, 2016, 9:08 AM

    VVIX Index Spikes 21% on News of Federal Investigation

    VVIX Index Spikes 21% on News of Federal Investigation

    OCT. 28 – On Friday afternoon a news story at wsj.com<http://blogs.wsj.com/moneybeat/2016/10/28/markets-rattled-by-fresh-fbi-review-of-clinton-email/?mod=djemalertMARKET> noted that – “Worries about a surprise election outcome resurfaced anew in financial markets on Friday afternoon after the Federal Bureau of Investigation uncovered new evidence in its investigation of Democratic presidential candidate Hillary Clinton‘s email server. … The news sent ripples through[...]

  • Trade Ideas | Oct 28, 2016, 2:35 PM

    Admiral SPO Delivers Another Over Night Winner

    Admiral SPO Delivers Another Over Night Winner

    On Monday, October 24, Admiral sent out a call spread on Lockheed Martin in anticipation of a bullish Earnings Report due PreMarket on October 25. The DEC 240/245 call spread was filled @ $1.24. Lockheed Martin announced 3rd Quarter Profit earnings of $3.61 per share on Revenue of $11.6 Billion and easily beat the estimates. Being in profit with more than 150%, Admiral had  the order ready to sell at the open, which was filled @ $3.10, not bad for a one day trade.  As for Maury,[...]

  • Market News | Trader Talk | Trade Ideas | Oct 28, 2016, 9:39 AM

    Block Trade Analysis - HSY Earnings Trade

    Block Trade Analysis - HSY Earnings Trade

    In honor of National Chocolate Day, The Hershey Company (HSY) released what must be considered a sweet earnings report for investors.  As I write this the stock is at 100.50 up 4.99 or just over 5% on the day.  I decided in honor of the 'holiday' and HSY’s great results that I would go looking for a trade that correctly anticipated today’s rise in shares. Early Thursday, with HSY trading around 96.75 there was a buyer of the HSY Oct 28th 99.50 Calls in several lots at prices[...]

  • Market News | Oct 27, 2016, 10:42 AM

    Earnings Week of 10/31 - 11/4

    Earnings Week of 10/31 - 11/4

    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.

  • Cboe Benchmark Indexes | Oct 26, 2016, 3:57 PM

    eVestment adds CBOE Strategy Benchmark Indexes

    eVestment adds CBOE Strategy Benchmark Indexes

    The following headlines appeared in the trade publications Pension & Investments…. “Hawaii assigns $1.6 billion total to 4 managers for options-based strategies” (March 21, 2016) “South Carolina allocates nearly $1.9 billion to equity options, infrastructure strategies” (April 21, 2016) The rationale for Hawaii and South Carolina’s interest in using options strategies to mitigate risk and enhance yields was outlined in the recent article in The Wall St. Journal… “In[...]

  • VIX | Trader Talk | Trade Ideas | Election & VIX | Oct 26, 2016, 10:47 AM

    Analyzing Equity Market Sector Risk and the Election

    Analyzing Equity Market Sector Risk and the Election

    So, what do Mexico and the Biotech industry have in common?  They both seem to be braced for excess volatility following the US Presidential election.  Before jumping into all that I’ll explain the table that sums all this up. A couple of days ago I posted a blog showing that SPX option implied volatility jumped about 2 points when comparing at the money options.   Our friends at CBOE LiveVol calculates ATM implied volatility for all option markets.  Using that information[...]

  • Election & VIX | Oct 25, 2016, 2:53 PM

    Election Week SPX Expirations on Monday, Wednesday and Friday, with Higher Implied Volatility for SPX Puts on Nov. 9

    Election Week SPX Expirations on Monday, Wednesday and Friday, with Higher Implied Volatility for SPX Puts on Nov. 9

    In the October 22 Striking Price column in Barron’s, Steve Sears wrote --“keep an eye on the CBOE Volatility Index, or VIX. Already, some investors are preparing for significant volatility around the Nov. 8 election. Investors recently bought about 6,000 VIX Nov. 30 calls and about 9,000 Nov. 17 calls.” IMPLIED VOLATILITY FOR S&P 500 PUTS  The table below shows samplings of implied volatility estimates for S&P 500 2100 options with select expiration dates. The Monday,[...]

  • Technical Analysis & Charts | Trade Ideas | Oct 25, 2016, 1:59 PM

    Probing the Buy Side of VOD

    Probing the Buy Side of VOD

    One pattern that I notice all the time when using Fibonacci ratios, is that many moves tend to terminate at extensions of prior swings.  I'm starting to get interested in VOD due to this pattern.  Not only are we seeing some key extensions on this chart which are illustrated with the "green lines", but we are also seeing a nice overlap with many other Fibonacci price relationships.  There are two zones that stand out in particular and the first one is being tested right here[...]

  • Market News | VIX | Trader Talk | Election & VIX | Oct 24, 2016, 4:58 PM

    "Election Certainty" Not Showing Up In SPX Options Market

    "Election Certainty" Not Showing Up In SPX Options Market

    So we keep hearing that the market is unconcerned with respect to the upcoming election or stated another way the stock market is discounting a victory by Hillary Clinton.  I am always skeptical when being told that the market thinks one thing or another without some sort of numbers to back up the statement.  With respect to the market discounting a pending event as being a non-event I always turn to volatility.  Specifically, implied volatility. If stock market participants are discounting[...]

  • Technical Analysis & Charts | VIX | Oct 24, 2016, 1:14 PM

    BigTrends.com Weekly Market Outlook - Lower Highs

    BigTrends.com Weekly Market Outlook - Lower Highs

    The bulls and the bears both took their shots at knocking the market off of the fence it's currently perched on. Neither team could get the job done. Stocks pretty much ended last week where they started it, but more than that they ended the week still trapped between a rock and a hard place. We'll look at the range bound stagnation after painting the bigger picture with the broad brush strokes of last week's and this week's economic news. Economic Data A pretty good dose of economic[...]

  • Trader Talk | Strategy | Oct 24, 2016, 9:13 AM

    The Time to Listen to Market Prophets? Not EVER!

    The Time to Listen to Market Prophets?  Not EVER!

    With so much uncertainty in the world most investors/traders get anxious and worried over losing money and start listening to market sages and so-called prophets.  That is typical and quite natural, yet when the underwear starts getting tight and we begin to sweat because the markets are misbehaving, well we tend to reach for whatever (or, whomever) makes the most sense.  To top the list of uncertainties include the upcoming election, which many are starting to believe is to be a Hillary[...]

  • Strategy | Trade Ideas | Oct 24, 2016, 9:10 AM

    Admiral SPO Puts his Mark on Microsoft

    Admiral SPO Puts his Mark on Microsoft

    Maury, Maury, Maury! Admiral SPO Puts his Mark on Microsoft. Knowing Maury’s thirst for shekels and his motto of "the best things in life are FREE" the Admiral launched a timely pre-earnings trade, a call time back spread. Maury, known for his Pavlovian behavior jumped in!  On Thursday, October 20th, the day Microsoft earnings were scheduled to come out after the bell, one day prior to OCT options expiration Admiral sent out the mother of all Maury trades at 2:56 PM CT: Sell[...]

  • Market News | Oct 23, 2016, 4:30 PM

    The Weekly Options News Roundup – 10/23/2016

    The Weekly Options News Roundup – 10/23/2016

    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. A Second VESTment Launches On Monday, October 18, CBOE Vest announced the launch of the CBOE Vest Defined Distribution Strategy Fund (VDDIX).  VDDIX, the second mutual fund to be launched by CBOE Vest, seeks to generate consistent periodic distributions while preserving capital over the long term. For more information,[...]