• Market News | VIX | Trader Talk | Trade Ideas | May 15, 2016, 2:09 PM

    Weekend Review - Volatility Indexes and ETPs - 5/9 - 5/13

    Weekend Review - Volatility Indexes and ETPs - 5/9 - 5/13

    There was a slight twist in the VXST – VIX – VXV – VXMT curve last week as the shorter dated indexes rose and the two long dated indexes dropped slightly. Although unusual, I am not reading too much into this as the curve was already pretty steep and remains so after relatively small changes across the board last week. While updating the numbers below the first thing that stood out to me was the continued elevated level of VVIX. With VIX up a bit, but still in the 15’s[...]

  • Market News | VIX | Trader Talk | Trade Ideas | May 14, 2016, 5:14 PM

    Weekend Review - Russell 2000 Index and Volatility - 5/9 - 5/13

    Weekend Review - Russell 2000 Index and Volatility - 5/9 - 5/13

    According to some of the headlines I came across this week, stock market participants are worried about economic growth. This concern about growth showed up in the relative performance of the Russell 2000 (RUT) and Russell 1000 (RUI) this week as RUT was down twice as much as RUI (-1.10% versus -0.54%). This places RUT down a little less than 3% for the year and RUI precariously in the green by a single basis point. Concerns over growth continue to show up in the relationship between[...]

  • Market News | Trader Talk | Futures | Strategy | Trade Ideas | May 13, 2016, 4:24 PM

    Russell 2000 Futures vs. Short Call Spread from Last Week

    Russell 2000 Futures vs. Short Call Spread from Last Week

    Every weekend I write a brief blog discussing the performance of the Russell 2000, how the CBOE Russell 2000 Volatility Index is reacting to market conditions, and pick out a RUT trade or other piece of market information that looks interesting (at least to me). Last week I noted a bear call spread using Russell 2000 Index Options that sold a deep in the money call and purchased a slightly out of the money call, both of which expired this week. The specific trade involved selling the RUT May 13th[...]

  • VIX | Education | Futures | May 13, 2016, 1:34 PM

    The Weekly Options News Roundup – 5/13/2016

    The Weekly Options News Roundup – 5/13/2016

    The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX and volatility-related articles from print, broadcast, online and social media outlets. VIX FIX – Tepid Volatility For weeks, market enthusiasts have braced themselves for a resurgence in volatility that has yet to materialize. The Dow Jones is ending the week slightly lower, while the CBOE Volatility Index continued to venture lower, dropping below the 14 level mid-week, before slightly rebounding[...]

  • Market News | Trader Talk | Trade Ideas | May 13, 2016, 9:21 AM

    Earnings Next Week - 5/16 - 5/20

    Earnings Next Week - 5/16 - 5/20

    Next week is all about retail which should be interesting since Macy's (M) woes were a big focus this week.  As always the data below is based on the last three years of earnings results, unless the data is in italics.  In those cases less than three years worth of history is available.  The columns show the biggest rally, biggest drop, average move, and what the stock did last quarter in reaction to earnings.

  • Trader Talk | Education | May 12, 2016, 6:59 PM

    Are Options a Core or Satellite Component of Portfolio Management?

    Are Options a Core or Satellite Component of Portfolio Management?

    Today I had the pleasure of moderating a panel at the OIC Financial Advisor Forum which was running concurrently with the 34th Annual Options Industry Conference. My panel was on the presidential election cycle and market volatility with a combination of a political expert and two individuals involved in money management. I enjoyed the challenge of trying to integrate the markets and politics into a single common themed discussion. Despite being immersed in thinking about my own moderating duties[...]

  • Technical Analysis & Charts | VIX | Trader Talk | May 10, 2016, 6:40 PM

    A Walk Through the Maze

    A Walk Through the Maze

    Let's detail a story of the last two weeks, in which I stumbled through a maze in search of the reward at the other end.  I've made some wrong turns and backtracked a few times, but I think I smell the cheese ever stronger, ever closer to me, right around the next corner. On April 28th I started with nothing but an idea, so I set it in motion as such:  With SVXY trading at $56.63 the moment I spied it, I sold ten SVXY 56 strike puts for the May 6th (six trading days away) expiration for[...]

  • Technical Analysis & Charts | VIX | Futures | Strategy | May 9, 2016, 12:21 PM

    Weekly Market Outlook - May Rally?

    Weekly Market Outlook - May Rally?

    The market may have finished last week on a bullish note, and started the week on a bullish note.  The middle of the week, however, was rough enough on stocks to leave the S&P 500 (SPX) (SPY) down 0.4% for the five-day span. On the other hand, when push came to shove at a critical line in the sand, the bulls were doing more pushing and shoving than the bears were.  Friday's gain - small as it may have been - happened in such a way and in such a place that there's a decent chance[...]

  • Market News | Technical Analysis & Charts | May 9, 2016, 9:46 AM

    Bonds, Stocks and Gold - Oh My!

    Bonds, Stocks and Gold  - Oh My!

    With all due respect to Dorothy from the Wizard of Oz, the title of this article should tell us we have some worries and fear about investing in different asset classes. To be sure, there is some fear permeating, investors are wondering if they should pull the plug after prolonged bull markets in bonds and stocks, or just buy gold and other precious metals. Equities have enjoyed a bountiful time since the financial crisis, a bullish run of seven years literally uninterrupted (on a longer time frame). Bonds[...]

  • Market News | VIX | Trader Talk | Strategy | Trade Ideas | May 8, 2016, 1:09 PM

    Weekend Review - Volatility Indexes and ETPs - 5/2 - 5/6

    Weekend Review - Volatility Indexes and ETPs - 5/2 - 5/6

    The S&P 500 was down 0.44% last week which places the index up only 0.65% for the year. Three out of the four S&P 500 focused volatility indexes were also lower last week, despite the drop in the S&P 500. I find the longer end of the curve holding up like it has for most of 2016 interesting as well as worrisome, at least if you are bullish on stocks. In the ETP space VXX was down by 5.11% and UVXY lost a little over twice as much at VXX. SVXY put up a decent week gaining[...]

  • Market News | VIX | Trader Talk | Futures | Strategy | Trade Ideas | May 7, 2016, 11:35 AM

    Weekend Review - VIX Options and Futures - 5/2 - 5/6

    Weekend Review - VIX Options and Futures - 5/2 - 5/6

    VIX dropped last week, with a big part of the drop coming Friday afternoon. Note the futures followed suit, but specifically note that the front month May future gave up a little more ground than spot VIX. This is sort of common when we have an employment number. Also note how flat the curve is from July through November – the theory is that the Fed is out of play between the conventions and the election which may result in relative calm for the financial markets. Late Thursday[...]

  • Weekend Review - Russell 2000 Options and Volatility - 5/2 - 5/6

    Weekend Review - Russell 2000 Options and Volatility - 5/2 - 5/6

    Small cap stocks get so close and then seem to fall back when reaching unchanged on the year or catching up with the performance of large cap stocks. This week the Russell 2000 (RUT) dropped 1.44% while the large cap focused Russell 1000 (RUI) lost 0.49%. This places RUT in the red by 1.86% for 2016 while RUI is still up 0.55%. With the underperformance of small cap stocks last week came a relative rise in the CBOE Russell 2000 Volatility Index (RVX). The RVX / VIX premium began the[...]

  • Education | Futures | Strategy | May 6, 2016, 4:25 PM

    Rising Volatility on China?

    Rising Volatility on China?

    With the recent launch of cash-settled options on FTSE China 50 Mini-Index (Ticker: FXTM), traders have an opportunity to express a view on the Chinese market or movement in volatility is available. Based on 50 of the largest and most liquid Chinese stocks (H Shares, Red Chips, and P Chips) trading in Hong Kong, cash-settled options on the FTSE China 50 Mini-Index is now listed on CBOE. FTSE China 50 Index Price & Volatility FTSE China 50 Index price movement changes on a monthly basis is typically[...]

  • Market News | May 6, 2016, 1:48 PM

    The Weekly Options News Roundup – 5/6/2016

    The Weekly Options News Roundup – 5/6/2016

    The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX and volatility-related articles from print, broadcast, online and social media outlets. London Calling As a result of inroads made by CBOE’s business development team throughout Europe, CBOE plans to open an office in London this July.     This will be the first international business development base the exchange has established outside the U.S., paving the way for an increased[...]

  • VIX | Futures | May 6, 2016, 10:30 AM

    Record Volume in April for SPX Wednesday-Expiring Weeklys Options

    Record Volume in April for SPX Wednesday-Expiring Weeklys Options

    In February CBOE launched S&P 500® Index (SPX) Wednesday-expiring WeeklysSM options. Last month the average daily volume for the "Wednesday Weeklys" rose to a record high of 72,957 contracts. In the February press release CBOE Holdings CEO Edward T. Tilly said – "We are pleased to further expand our SPX product complex with the introduction of SPX Weeklys with Wednesday expirations. Wednesday Weeklys, in addition to end-of-the-week expirations, will increase opportunities[...]