• Market News | Technical Analysis & Charts | VIX | Mar 21, 2016, 10:23 AM

    BigTrends.com Weekly Market Outlook - Up 12% From Lows, Where To Now?

    BigTrends.com Weekly Market Outlook - Up 12% From Lows, Where To Now?

    We just completed the fifth straight bullish week for the market.  The S&P 500 (SPX) (SPY) advanced 1.35% last week, clearing a couple of key resistance lines in the process. Yet, other resistance lines have yet to be hurdled, and could end up being problems that work against stocks now that the S&P 500 is up 12% from the February 11th low...  enough to give all those would-be profit-takers something to think about. We'll weigh the good and bad below, right after[...]

  • Strategy | CBOE Memories | Mar 21, 2016, 9:07 AM

    Trading Lesson 2: The 90's Were Alive

    Trading Lesson 2:  The 90's Were Alive

    Time for another trading lesson.  Back in 1996 I took a job with Sunkist Growers as their Pension and Investments Manager.  I was hired to manage pension assets for a mature fund.  By mature this means there were many beneficiaries drawing monthly pensions, and as the company had been around 100 years the plan was old, I was charged with stepping up the pace of returns relative to the minimum required contribution by the company owners. The 90's were a time when markets started to[...]

  • Market News | Mar 20, 2016, 8:30 AM

    Weekend Review - VIX Options and Futures - 3/14 - 3/18

    Weekend Review - VIX Options and Futures - 3/14 - 3/18

    March VIX futures and options settled on the open Wednesday and now the next standard expiration is April.  Of course there are weekly expirations between now and April and this is one of those instances where there five weeks between standard settlement days.  I note this because of the shape of the curve below.  Note that on Friday April futures closed at a premium of just over 3.70.  VIX is admittedly low, but VIX futures traders are reluctant to sell April futures with so[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Mar 19, 2016, 4:29 PM

    Weekend Review - Volatility Indexes and ETPs - 3/14 - 3/18

    Weekend Review - Volatility Indexes and ETPs - 3/14 - 3/18

    I’m honestly surprised and admitting that I have been very wrong in trying to guess at the VIX action lately.  I never would have expected a 13 handle for VIX, but low and behold that’s what we got on Friday.  When I return to work on Monday I will spend a little time on the wall of shame. Even the longer dated volatility indexes have given up the fight with VXV and VXMT closing near the respective 2015 averages after remaining at elevated levels for most of 2016. VXX[...]

  • Market News | VIX | Blogging Options | Trader Talk | Futures | Trade Ideas | Mar 19, 2016, 2:38 PM

    Weekend Review - Russell 2000 Options and Volatility - 3/14 - 3/18

    Weekend Review - Russell 2000 Options and Volatility - 3/14 - 3/18

    I guess I have to try to work some sort of St. Patrick’s Day theme in here since the Russell 1000 (RUI) went from red to green on the year last week, but I’m too worn out to come up with anything clever.  Also, it is difficult to get too excited over an index that is up 0.05% for the year.  Since I’m trying to be funny, here’s a lame attempt, the Russell 2000 (RUT) remains in a rut for 2016, even after gaining 1.3% last week the small cap benchmark is still 3% lower[...]

  • Market News | VIX | Futures | Mar 18, 2016, 3:00 PM

    The Weekly Options News Roundup – 3/18/2016

    The Weekly Options News Roundup – 3/18/2016

    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. New Options Flexibility This Monday, CBOE will begin offering FLEX Index Options with Asian and Cliquet style settlement. These new exchange-traded exotic options are particularly appealing to the insurance industry, giving indexed annuity writers new options-based hedging alternatives.  For more information, see[...]

  • Technical Analysis & Charts | VIX | Futures | Strategy | Mar 18, 2016, 1:06 PM

    Weekly Stock Market Commentary 3/18/16

    Weekly Stock Market Commentary 3/18/16

    The completion of the powerful, bottoming "W" formation at the beginning of March was the launchpad for this leg of the rally. It has more room to run. Equity-only put-call ratios continue to remain on buy signals. The standard chart has seen a slight "wiggle" develop this week, but it does not dissuade the computer programs from continuing to say that these ratios are solidly on buy signals. Market breadth continues to be strong. Both oscillators are currently on buy signals,[...]

  • VIX | Education | Futures | Mar 18, 2016, 12:57 PM

    VIX Volatility Indicators Cool as FOMC Joins the Dovish Bandwagon

    VIX Volatility Indicators Cool as FOMC Joins the Dovish Bandwagon

    CBOE’s indicators of expected volatility for Treasuries, equities and foreign exchange rate -- TYVIX, VIX, EUVIX, JYVIX, BPVIX) -- turned cooler this week. All but BPVIX are below their historical median values since 2003. The driver of the move was the decidedly more dovish tone of the FOMC’s announcement on Thursday. The Fed policymakers also announced their decision not to change (raise) the fed fund target rate – but that decision had been fully anticipated. The FOMC’s[...]

  • Market News | VIX | Futures | Mar 18, 2016, 12:45 PM

    CBOE VIX Options Volume Surges

    CBOE VIX Options Volume Surges

    CBOE VIX® option volume for March is averaging well over 700K contracts as realized volatility for the index stabilizes near 95% and traders marvel at the 50% retracement in the index from the 30 handle highs of February 11th.  Nearly 10M VIX contracts have traded in the first 18 days of the month, with calls leading puts 8:3, suggesting total monthly volume may top 15M contracts for the first time in six months. Large call spreads are driving much of the volume, including ratio spreads[...]

  • Market News | VIX | Blogging Options | Trader Talk | Futures | CBOE Memories | Mar 17, 2016, 9:02 AM

    VIX Network Discussion at FIA Boca

    VIX Network Discussion at FIA Boca

    Yesterday afternoon at the 41st Annual International Futures Industry Conference in Boca Raton, CBOE and S&P Dow Jones Indices teamed up for a session highlighting the growing use of VIX around the world. Reid Steadman from S&P Dow Jones Indices offered a brief welcome address where he noted the various markets where participants have access to a consistent measure of implied volatility.  He underscored that a wide variety of equity markets including India, Australia,[...]

  • Market News | Blogging Options | Trader Talk | Strategy | Trade Ideas | Mar 17, 2016, 8:14 AM

    Earnings Week of 3/21 - 3/25

    Earnings Week of 3/21 - 3/25

    It's a very quiet week next week on the earnings front with the highlight being NKE.  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.  

  • Strategy | Mar 15, 2016, 2:17 PM

    Know Your Time Frame

    Know Your Time Frame

    Forecasting is fun, but it leads to many errors in the process.  We hear them all time, someone trying to be a hero but often failing miserably in their predictions.  I read a quote last week by Howard Simons of the 'Iron Law' of forecasting (for economists):  Give 'em a number or give 'em a date, but don't ever give 'em both.  Indeed, trying to forecast is quite difficult, one can go back and forth from hero to goat several times.  Keep laying out a forecast and eventually[...]

  • Market News | Education | Mar 14, 2016, 3:43 PM

    March 22 Panel at CBOE on Accessing the Volatility Risk Premium with Cash-Secured Put Writing

    March 22 Panel at CBOE on Accessing the Volatility Risk Premium with Cash-Secured Put Writing

    Presentations and a panel discussion on the topic of - Accessing the Volatility Risk Premium with Cash-Secured Put Writing will occur on Tuesday March 22, 2016 from 5:00 PM to 6:45 PM at Chicago Board Options Exchange (CBOE), 400 So. La Salle St., (enter on Van Buren Street), Chicago, 60605   http://bit.ly/CAIA-March22 ISSUES Issues to be discussed include – Has there been a Volatility Risk Premium that can facilitate enhanced risk-adjusted returns for index options-selling[...]

  • Market News | Mar 14, 2016, 2:38 PM

    Bracketology – Strong Returns for BXMD and CMBO Indexes Since Mid-1986

    Bracketology – Strong Returns for BXMD and CMBO Indexes Since Mid-1986

    While much of this month’s bracketology focus is on basketball tournaments, the chart below shows investment returns for eight benchmark indexes since mid-1986. The chart includes four benchmark indexes (introduced in 2015) that invest in S&P 500® (SPX) options.  In the chart the top two indexes in terms of annualized returns were the CBOE S&P 500 30-Delta BuyWrite Index (BXMD) and the CBOE S&P 500 Covered Combo Index (CMBO). DECCRIPTIONS FOR FOUR BENCHMARK INDEXES THAT[...]

  • Market News | Trader Talk | Trade Ideas | Mar 14, 2016, 12:59 PM

    Earnings Week of 3/14 - 3/18

    Earnings Week of 3/14 - 3/18

    Apologies for being late to the game, luckily we do have some big names reporting later this week so this blog may still be useful for many readers. 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.