• Market News | Technical Analysis & Charts | Apr 25, 2016, 10:29 AM

    Weekly Market Outlook - Weekly Chart Weakening

    Weekly Market Outlook - Weekly Chart Weakening

    Though the S&P 500 (SPX) (SPY) managed to eke out a gain last week, it also ended the week fighting for its life, dropping hints that the rally is running out of gas. Meanwhile, the NASDAQ Composite (COMP) logged a weekly loss -- the second in the past three weeks -- and also hinted that a rollover was already taking shape. Moving into the thick of earnings season could drive a course correction with little to no warning. Indeed, the course isn't even technically bearish yet. The bulls[...]

  • Education | Strategy | Apr 25, 2016, 10:17 AM

    Option Trading - Are You Ready? Part 1

    Option Trading - Are You Ready?  Part 1

    "Great traders have passion, confidence, an edge and a game plan. They are prepared, They keep their system simple.” - Gavin McMaster I have been option trading for several years, and while my results have been up/down - what is important is that I have survived many different market cycles.  That should tell you a great deal, as surviving in this jungle call the 'market' without a life preserver is a difficult but not impossible task.  To me, success is not all about the bottom[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Apr 24, 2016, 7:05 PM

    Weekend Review - VIX Options and Futures - 4/18 - 4/22

    Weekend Review - VIX Options and Futures - 4/18 - 4/22

    VIX moved down and the curve shifted lower as well. This sort of comment had been leading off this blog more often than not for years. I’m just surprised I’m saying it during what was expected to be a transitional year from a low to high volatility regime. The only bearish feature below is how steep the curve is. A few more weeks in the 13’s and we’ll probably see a flattening of the curve. Late last week it was pointed out to me that the VIX had closed under[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Apr 24, 2016, 3:44 PM

    Weekend Review - Volatility Indexes and ETPs - 4/18 - 4/22

    Weekend Review - Volatility Indexes and ETPs - 4/18 - 4/22

    Very quiet weeks, like last week, usually result in a slight shift lower in the VXST – VIX – VXV – VXMT curve. Contango persists and it worked its magic on SVXY, VXX, and UVXY last week. SVXY had a good week rising over 5% while VXX gave up just about the same amount and UVXY lost over 11%. Note VVIX is remaining at relatively high levels as is SKEW.   For the year SVXY is up about 7%, VXX has lost 21% and UVXY is down 45% (after being up over 100% back in February). SVXY[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Apr 24, 2016, 2:26 PM

    Weekend Review - Russell 2000 Index and Volatility - 4/18 - 4/22

    Weekend Review - Russell 2000 Index and Volatility - 4/18 - 4/22

    For the first time in 2016 the Russell 2000 (RUT) moved into positive territory last week. A gain of 1.4% places RUT just under 1% in the green for the year. Small caps also closed the gap with large cap stocks as the Russell 1000 (RUI) was up by 0.60% and is less than 1.5% higher than RUT for the year. Despite the run in small caps, the CBOE Russell 2000 Volatility Index remained relatively high compared to VIX last week. I take this as being an indication that there are not a[...]

  • Market News | Apr 22, 2016, 2:43 PM

    Earnings Next Week - 4/25 - 4/29

    Earnings Next Week - 4/25 - 4/29

    The bulk of earnings season kicks in next week.  With a couple of exceptions (TWTR and PYPL) the numbers below represent 3 years of earnings history.

  • Market News | Education | Apr 22, 2016, 1:49 PM

    The Weekly Options News Roundup – 4/22/2016

    The Weekly Options News Roundup – 4/22/2016

    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. Stellar Connections Yesterday, CBOE Futures Exchange (CFE) announced that Stellar Trading Systems, a multi-asset trading software and services specialist, has established connectivity with  CFE.  This new link extends the exchange’s global footprint, broadening its reach with European and Asian investors. [...]

  • Market News | Education | Futures | Apr 20, 2016, 10:29 AM

    Continued Use of Listed Options Is Permitted by Final DOL Fiduciary Rules

    Continued Use of Listed Options Is Permitted by Final DOL Fiduciary Rules

    Here is an update on the status of fiduciary rules recently finalized by the Department of Labor (DOL).  PROPOSED DOL REGS IN APRIL 2015 The DOL proposed on April 14, 2015 sweeping new regulations governing retirement accounts and IRAs which would exclude listed options and futures as permissible investments. FINAL DOL REGS IN APRIL 2016 On April 6, 2016, the DOL released its final Conflict of Interest Rule and related exemptions, which are available at http://www.dol.gov/ebsa/regs/conflictsofinterest.html. The[...]

  • Market News | Apr 19, 2016, 3:57 PM

    Thinking broadly about emerging markets

    Thinking broadly about emerging markets

    Apr 19, 2016  |  Raman Aylur Subramanian, Equity Applied Research, MSCI Emerging-market equities revived in the first quarter after a rather dismal performance over the past five years. The pickup has left investors to wonder whether the gains might continue and to think anew about how to approach the segment. A pickup in the performance of emerging markets Economic development and the interconnectedness of financial markets have redefined the characteristics of emerging markets to such[...]

  • Market News | VIX | Trader Talk | Strategy | Trade Ideas | Apr 19, 2016, 12:55 PM

    Huge 1 x 2 VIX Call Spread Rolled Today

    Huge 1 x 2 VIX Call Spread Rolled Today

    Things are relatively quiet today with the S&P 500 topping 2100 for the first time in months and then losing its grip on that round number. However, despite the relative quiet a big trade hit the VIX pit just before lunch time that has traders talking. There were four legs to the trade, which turned out to be a large volatility player rolling a position from May to July. I have no idea what they have against June. A May spread was exited – Sell 82,129 VIX May 23 Calls at 0.43 + Buy 164,242[...]

  • Market News | Technical Analysis & Charts | VIX | Trader Talk | Apr 18, 2016, 11:52 AM

    Checking in on Overnight VIX Action

    Checking in on Overnight VIX Action

    Last Friday CBOE began disseminating spot VIX quotes during what we lovingly call the Extended Hours Session (ETH). The first quote for VIX on April 15th occurred at 2:15 am Chicago time. I was elsewhere Friday but I did check the data periodically and everything seemed to be running smoothly. I’m back at work today so I decided to take a look at how VIX did relative to the S&P 500 futures market from 2:15 am to 8:15 am Chicago time, looking at the price every 5 minutes. At 8:15 am the[...]

  • Technical Analysis & Charts | VIX | Futures | Strategy | Apr 18, 2016, 9:49 AM

    BigTrends.com Weekly Market Outlook - Valuation Concerns Creep In

    BigTrends.com Weekly Market Outlook - Valuation Concerns Creep In

    The market didn't end last week on a particularly bullish foot, but it doesn't matter  - it started the week on such a bullish foot the S&P 500 (SPX) (SPY) was still up 1.6% for the week, and still above a fairly important resistance line. The strength still doesn't outright guarantee stocks will keep moving higher. In fact, even if stocks were in a great technical position to keep edging higher, we're once again running into a valuation headwind. We'll dissect all of it below, right[...]

  • Weekend Review - Volatility Indexes and ETPs - 4/11 - 4/15

    Weekend Review - Volatility Indexes and ETPs - 4/11 - 4/15

    The S&P 500 was up by 1.62% last week and the VXST – VIX – VXV – VXMT curve reacted accordingly shifting lower in a fairly parallel fashion. The steepness has me concerned about the second half of this year, but for now things look just peachy. Note on the table below that despite (or maybe because of) the drop in VIX, VVIX rose a tad. It could be traders used to the weakness in VIX and related futures to get long volatility through VIX calls. It is a bit surprising[...]

  • Market News | Apr 17, 2016, 5:49 PM

    Weekend Review - VIX Options and Futures - 4/11 - 4/15

    Weekend Review - VIX Options and Futures - 4/11 - 4/15

    VIX fell to 13.62 as the S&P 500 put up some gains last week. The curve shifted lower, but is steep, even the expiring April contract finished the week at about a 1.50 premium to spot VIX.   I noticed that the S&P 500 was higher than the close two weeks ago and VIX was higher as well. This is something many traders take a look at and may consider it a non-confirmation of the recent rally. Let’s see this coming week if the 13.00 low in VIX for 2016 holds on any equity[...]

  • Weekend Review - Russell 2000 Options and Volatility - 4/11 - 4/15

    Weekend Review - Russell 2000 Options and Volatility - 4/11 - 4/15

    One of my favorite books when I was a wee lad was “The Little Engine That Could”. When I see the Russell 2000 (RUT) coming very close to going from red to green on the year that story pops in my mind as I personify RUT saying, “I think I can” with the small cap benchmark approaching unchanged on the year. Last week RUT was up by 3% which places the index just 44 basis points in the red for 2016. Pretty impressive for an index that was down as much as 16% on the year.[...]