• Market News | Aug 26, 2016, 4:33 PM

    The Weekly Options News Roundup – 8/26/2016

    The Weekly Options News Roundup – 8/26/2016

    Options Strategy ‘Put’ In Perspective Traders in the S&P 500 Index option pit at CBOE in June.  Photo: Getty Images Pension funds are increasingly beginning to use the CBOE S&P 500 PutWrite Index (PUT) as an efficient means to garner income while providing a “cushion” from volatility during market downturns. The PUT strategy is designed to sell a sequence of one-month, at-the-money, S&P 500 Index puts and invest cash at one- and three-month Treasury Bill[...]

  • Market News | Trader Talk | Trade Ideas | Aug 25, 2016, 7:51 PM

    Earnings Next Week - 8/29 - 9/2

    Earnings Next Week - 8/29 - 9/2

    Next week we have a small list, but it's an interesting one as several of the companies reporting have recently had a big move or just regularly experience a lot of volatility around earnings.  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.  

  • Market News | Trader Talk | Trade Ideas | Aug 24, 2016, 11:15 AM

    The Buffett Put Trade - 2Q2016 Update

    The Buffett Put Trade - 2Q2016 Update

    Each quarter Berkshire Hathaway, like all investment firms, files their holdings with the SEC.  Most people scramble to see what stocks Warren Buffett has been adding to his portfolio.  I usually scramble as well, but I’m looking for something hardly discussed in the dozens of pages that make up Berkshire Hathaway’s 10-Q.  I go looking for an update on what I commonly call The Buffett Put Trade.  Back in April I wrote an explanation of what this trade is all about. [...]

  • Technical Analysis & Charts | VIX | Futures | Aug 22, 2016, 1:28 PM

    BigTrends.com Weekly Market Outlook - Tug Of War Continues

    BigTrends.com Weekly Market Outlook - Tug Of War Continues

    For the second week in a row, stocks were content to simply drift sideways.... the result of opposing factors simultaneously weighing on investors' mind. From one direction stocks are being buoyed by low interest rates that could linger for a while, while from the other direction the market's high valuations may be keeping a lid on things. The bulls are technically winning the war, but it's a marginal victory and the tide could turn quite easily. We'll weigh the odds in a moment. Let's[...]

  • Market News | Aug 22, 2016, 9:36 AM

    Buying a Breakout, Selling Breakdowns

    Buying a Breakout, Selling Breakdowns

    When a stock makes a big breakout or breakdown on some very heavy turnover, it catches the market's attention. We often feel regret and that we are late to the party, and that if we decide to jump on board then the stock will reverse course. That is the psychological negative of not understanding momentum, for it is at these moments that the best opportunity for gain often lie ahead. Stocks move over time, often long periods of time - yet our minds constantly think in the moment. This is a divergence[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Aug 20, 2016, 7:42 PM

    Weekend Review - VIX Futures and Options - 8/15 - 8/19

    Weekend Review - VIX Futures and Options - 8/15 - 8/19

    VIX dropped a little as the equity market did a whole lot of nothing last week.  We retired the August contract on the open Wednesday morning and September took over as the front month.  With time to go to expiration (this is actually a five-week cycle) everyone seemed to notice the steep contango again.  What is interesting below is the behavior of the curve beyond October.  November and beyond gained a little ground despite all the contracts moving up in the pecking order of[...]

  • Market News | Trader Talk | Strategy | Trade Ideas | Aug 20, 2016, 2:00 PM

    Weekend Review - Volatility Indexes and ETPs - 8/15 - 8/19

    Weekend Review - Volatility Indexes and ETPs - 8/15 - 8/19

    For the second week in a row the S&P 500 Index related volatility indexes hardly budged. Three out of four were lower with the longest dated, VXMT, up slightly on the week. We’ve ranted and raved in various forums about how VVIX has been holding up despite a lower VIX. It was kind of like the last holdout for higher equity market related volatility until this past week when it took a 12% dive.  This puts VVIX closer to the lower end of the historical range. I guess[...]

  • Market News | Trader Talk | Strategy | Trade Ideas | Aug 20, 2016, 10:09 AM

    Weekend Review - Russell 2000 Options and Volatility - 8/15 - 8/19

    Weekend Review - Russell 2000 Options and Volatility - 8/15 - 8/19

    Sometimes I over personify the financial markets and when I saw that the Russell 2000 (RUT) easily extended the lead over the Russell 1000 (RUI) this week an Olympic themed situation popped into my head.  I saw the Russell 2000 as Usain Bolt giving a thumbs up as it easily moved farther ahead of the Russell 1000.  For the week RUT gained 0.60% while RUI was actually down by 0.01% which places the 2016 lead for RUT at just over 2% (8.88% vs. 6.86%). When VIX is low the ratio[...]

  • Market News | Aug 19, 2016, 1:17 PM

    The Weekly Options News Roundup – 8/19/2016

    The Weekly Options News Roundup – 8/19/2016

    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. Markets Get Social Powers CBOE has partnered with Social Market Analytics (SMA) in the development of a suite of indexes that harness predictive signals from Twitter traffic to generate different “S-Factors” that gauge investor stock sentiment.  On Monday, the CBOE-SMA Large Cap Index (SMLC Index),[...]

  • Market News | Trader Talk | Trade Ideas | Aug 18, 2016, 1:27 PM

    Earnings Next Week - Aug 22 - Aug 26

    Earnings Next Week - Aug 22 - Aug 26

    There are just enough names to make things interesting next week.  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.

  • Market News | Futures | Strategy | Aug 17, 2016, 1:14 PM

    Successful Launch for New SPX Monday-Expiring Weeklys Options

    Successful Launch for New SPX Monday-Expiring Weeklys Options

    On August 15 CBOE launched trading of the new S&P 500® Index (SPX) Monday-expiring Weeklys options. Daily trading volume for the new SPX Monday Weeklys in the first two days was 4,334 on August 15, and 10,829 on August 16. Institutional investors have told me that the SPX Monday Weeklys could have potential to be very helpful to them in managing their over-the-weekend risk. SPX Weeklys are one of CBOE’s fastest-growing products, with volume in 2015 setting a 10th consecutive annual[...]

  • VIX | Futures | Strategy | Aug 15, 2016, 10:12 AM

    BigTrends.com Weekly Market Outlook - On The Fence Amid Presidential Cycle

    BigTrends.com Weekly Market Outlook - On The Fence Amid Presidential Cycle

    Though the market finished on a bullish foot two Friday's ago, that tone didn't help stocks one iota last week. When all was said and done, the S&P 500 (SPX) (SPY) pretty much ended last week where it started it, and still on the fence as it's been for the better part of the past several weeks. Just for the record though, the uptrend is still the bulls' to lose. The bears just haven't been able to land any real damaging blows. We'll examine the market's odds and undertow below, after running[...]

  • Education | Aug 15, 2016, 9:17 AM

    Rate of Change Can Predict Future Momentum

    Rate of Change Can Predict Future Momentum

    The rate of change is defined as the speed for which a variable changes in a specified period of time. We look for a change in trend or just an inflection point key in on the rate of change to help determine where momentum may take place and perhaps estimate the trajectory. While it is often difficult to predict a top or bottom with any consistency, from a mathematical perspective we can use the rate of change to identify probable turning points. It is at these moments where significant gains can[...]

  • Market News | Aug 13, 2016, 9:45 PM

    Weekend Review - Volatility Indexes and ETPs - 8/8 - 8/12

    Weekend Review - Volatility Indexes and ETPs - 8/8 - 8/12

    I considered skipping the first chart in this blog since the four S&P 500 related volatility indexes didn't move much last week.  The only thing to note here is that the shorter dated end did rise a bit more than the long end, but the curve remains fairly steep. Despite the fairly quiet week, VVIX rose to the mid-90's.  I'm hearing a mix of reasons which fall into two camps.  One - with steep contango put buyers are coming into the market to take advantage of the futures[...]

  • Market News | Aug 13, 2016, 1:42 PM

    Weekend Review - VIX Options and Futures - 8/8 - 8/12

    Weekend Review - VIX Options and Futures - 8/8 - 8/12

    VIX was higher last week, but on the chart and table below that’s all that moved up.  The entire curve was lower as the steep contango that everyone has been talking about got a little less steep. On Friday, the biggest VIX option trade appears to be expecting VIX to rally sometime in the next few weeks and take the September futures with it.  With spot VIX around 11.50 and the September VIX futures around 15.00 someone came in and purchased the VIX Sep 17 Calls for 1.24[...]