• 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.[...]

  • Market News | Apr 15, 2016, 4:58 PM

    The Weekly Options News Roundup – 4/15/2016

    The Weekly Options News Roundup – 4/15/2016

    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. Target-Outome Investing. The Next Wave in Options Investing? On Wednesday, CBOE announced that it has created a series of 13 “Buffer Protect Indexes,” the first in planned family of options-based strategy performance benchmarks that are designed to target the outcomes of specific investment strategies. The[...]

  • Market News | Apr 15, 2016, 4:19 PM

    Earnings Next Week - 4/18 - 4/22

    Earnings Next Week - 4/18 - 4/22

    Earnings “season” kicks into full gear next week with reports from IBM, NFLX, GS, JNJ, INTC, YHOO, AXP, QCOM, VZ, MSFT, SBUX, and countless others. Below is a list of names that will report next week that have weekly options available for trading. After the ticker, the columns show the biggest gain, biggest drop, average move (non-directional), and stock price reaction last quarter. Monday Before the Open Ticker Max Min Abs Avg Last Q HAS 12.55% -7.20% 5.03% 1.36% MS 4.38% -5.40% 2.48% 1.12% PEP 3.04% -2.21% 1.53% -0.74% Monday[...]

  • Strategy | Apr 15, 2016, 3:49 PM

    Three Studies Show Strong Risk-adjusted Returns for Put-Writing Indexes

    Three Studies Show Strong Risk-adjusted Returns for Put-Writing Indexes

    In 2011 I received an email from an experienced options manager that stated -- “The introduction of BXM by the CBOE and the exchange’s continued support has created a new covered call asset class that fits well into the move to lower volatility equity products.  BXM gives us a much better accepted benchmark than is available in the Low Vol equity world.  We have been getting a lot interest, RFP’s etc. as consultants and institutional investors accept the notion of lower[...]

  • Market News | Apr 13, 2016, 4:51 PM

    CBOE Introduces First in a Series of Indexes Designed to Target Investment Outcomes

    CBOE Introduces First in a Series of Indexes Designed to Target Investment Outcomes

    CHICAGO, IL -- April 13, 2016 -- Chicago Board Options Exchangeâ (CBOEâ) today announced it has created a series of 13 “Buffer Protect Indexes,” the first in a family of options-based strategy performance benchmarks that are designed to target the outcomes of specific investment strategies. The CBOE S&P 500 Buffer Protect Indexes measure the performance of a hypothetical portfolio of S&P 500® Index (SPX) FLexible EXchange® (FLEX) options designed to provide[...]

  • Technical Analysis & Charts | VIX | Futures | Strategy | Apr 11, 2016, 9:45 AM

    BigTrends.com Weekly Market Outlook - Hawkish Fed?

    BigTrends.com Weekly Market Outlook - Hawkish Fed?

    It's too soon to assume the worst yet.  On the other hand, it's not too soon to prepare for the worst even as we hope for the best. Last week, stocks lost ground for the second time in three weeks.  More than that, the major indices are now putting a great deal of pressure on some critical support levels.  Worse still, we're seeing clear signs of waning bullish momentum.  That's not to say that bearish momentum has developed yet.  It is to say, however, this is how bearish[...]

  • Market News | Apr 10, 2016, 1:00 PM

    The Weekly Options News Roundup - 4/8/2016

    The Weekly Options News Roundup - 4/8/2016

    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 – Volatility Stands By, Bye, Buy Markets retreated this week, coming off of their March gains. The VIX Index spiked to 16.70 on Thursday, before leveling out at 15.36 on Friday. As the VIX Index trends lower this month, some investors are using VIX to pack their portfolios with protection, predicting[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Apr 10, 2016, 7:51 AM

    Weekend Review - VIX Futures and Options - 4/4 - 4/8

    Weekend Review - VIX Futures and Options - 4/4 - 4/8

    A week ago Thursday I was in Arizona speaking to an investment club and was asked if VIX would hit the 12’s anytime soon. I said I didn’t think so and the following day VIX came within a penny of a 12 handle. This week I was spared a trip to the wall of shame as VIX worked 17% higher to finish at 15.36. The futures were at a nice premium before this week so the front month April contract, which expires on the open April 20th, rose only 8% as the curve flattened slightly after spending[...]

  • Market News | VIX | Trader Talk | Strategy | Trade Ideas | Apr 9, 2016, 3:15 PM

    Weekend Review - Volatility Indexes and ETPs - 4/4 - 4/8

    Weekend Review - Volatility Indexes and ETPs - 4/4 - 4/8

    The S&P 500 lost a little over 1.2% last week, but the impact on volatility indexes was more than one would expect from loss like that for the S&P 500. Most significant to me was that both the 3-month (VXV) and 6-month (VXMT) S&P 500 oriented volatility indexes returned to average 2015 levels. This was something I was a bit obsessed with to begin 2016. The shorter end of the curve is still below last year’s average, but a few more weeks like last week and we will be right back to[...]

  • Market News | VIX | Trader Talk | Strategy | Trade Ideas | Apr 9, 2016, 8:30 AM

    Weekend Review - Russell 2000 Options and Volatility - 4/4 - 4/8

    Weekend Review - Russell 2000 Options and Volatility - 4/4 - 4/8

    I started last week at the FTSE Russell offices participating in a panel discussion that focused on small cap stocks. It was hard to come up with much on the positive side as the Russell 2000 has struggled over the past few months. Every once in a while it appears RUT is about to gain upside traction, but those glimmers of hope seem to be short lived. Last week RUT was down 1.8% while the large cap focused Russell 1000 (RUI) was down about 1.2%. RUI finished the week at up 0.02% for 2016 while RUT[...]

  • Market News | Trader Talk | Trade Ideas | Apr 7, 2016, 8:45 AM

    Earnings Next Week - 4/11 - 4/15

    Earnings Next Week - 4/11 - 4/15

    Just like the beginning of baseball season witnesses a few games before we have days of a full slate of games, earnings season kicks off next week with just a dozen stocks that have short dated options available for trading reporting their numbers.  As always, the numbers below represent three years of history.   After the ticker the columns show the biggest gain, biggest drop, average move (non-directional) and stock price reaction last quarter.

  • Education | Apr 6, 2016, 2:21 PM

    The Return of RUT Fest

    The Return of RUT Fest

    Last September The Options Institute hosted a full day of webcasts focusing on trading Russell 2000 Options that we referred to as "RUT Fest".  By popular demand RUT Fest returns on Tuesday April 12th with all four of the instructors from CBOE being joined by Kerry Given from Parkwood Capital LLC and CBOE Live Vol's Kevin Nichols.  We will discuss a range of topics related to Russell 2000 Index Options, starting with the basics and moving on to spread trading, strategy[...]

  • Trader Talk | CBOE Memories | Apr 6, 2016, 11:05 AM

    Trading Lessons: The Mountain Top Is Lonely

    Trading Lessons:  The Mountain Top Is Lonely

    This story is part III of my trading lessons series. I've been to the top of what is called 'trading nirvana', a place where I thought I would have plenty of company. Back in my early trading days, I thought there was nothing bad that could touch me. As you recall from a previous article where I turned a small sum of 7K into a nice amount over half a million in just a few years. This was 'it' for me, and while it was far from a fortune I could live on the rest of my days, I certainly believed it[...]

  • Trader Talk | Trade Ideas | Apr 4, 2016, 1:35 PM

    Earnings This Week - 4/4 - 4/8

    Earnings This Week - 4/4 - 4/8

    This will be the last quiet earnings week for about a month.  The numbers below represent three years of history.   After the ticker the columns show the biggest gain, biggest drop, average move (non-directional) and stock price reaction last quarter.  

  • Market News | VIX | Trader Talk | Education | Futures | Trade Ideas | Apr 3, 2016, 11:11 AM

    Weekend Review - VIX Options and Futures - 3/28 - 4/1

    Weekend Review - VIX Options and Futures - 3/28 - 4/1

    VIX closed on the 2016 lows last week and flirted with a 12 handle. I was asked at a seminar in Scottsdale, AZ on Thursday night how long it will take for VIX to touch 12. I responded that I had a hard time seeing a 12 handle this year. It won’t take much for me to be proven wrong. Something that keeps me in the higher volatility regime camp is the relative level of VIX futures to spot VIX. Note below that the April futures are at a hefty premium to spot VIX despite getting the monthly employment[...]