Rhoads-Russell

Russell Rhoads, CFA

Russell Rhoads, CFA, is Director, Product Advancement, Global Derivatives at Cboe Global Markets. His career before joining Cboe included positions at a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, Balyasny Asset Management, and Millennium Management. He is a financial author and editor having contributed to multiple magazines and edited several books for Wiley publishing. He is the author of six market related books including Trading VIX Derivatives, Option Spread Trading, Trading Weekly Options, and Options Strategies for Advisors and Institutions. He authored material to be included in Level II of the CFA program and material for the CMT designation. In addition to his duties at Cboe, he is an adjunct instructor at Loyola University. He is a double graduate of the University of Memphis with a BBA ('92) and an MS ('94) in Finance and also received a Master's Certificate in Financial Engineering from the Illinois Tech in 2003. Russell is currently pursuing a PhD from Oklahoma State University with an expected graduation date in the Summer of 2018.

  • VIX | Trader Talk | Trade Ideas | Election & VIX | Oct 26, 2016, 10:47 AM

    Analyzing Equity Market Sector Risk and the Election

    Analyzing Equity Market Sector Risk and the Election

    So, what do Mexico and the Biotech industry have in common?  They both seem to be braced for excess volatility following the US Presidential election.  Before jumping into all that I’ll explain the table that sums all this up. A couple of days ago I posted a blog showing that SPX option implied volatility jumped about 2 points when comparing at the money options.   Our friends at CBOE LiveVol calculates ATM implied volatility for all option markets.  Using that information[...]

  • Market News | VIX | Trader Talk | Election & VIX | Oct 24, 2016, 4:58 PM

    "Election Certainty" Not Showing Up In SPX Options Market

    "Election Certainty" Not Showing Up In SPX Options Market

    So we keep hearing that the market is unconcerned with respect to the upcoming election or stated another way the stock market is discounting a victory by Hillary Clinton.  I am always skeptical when being told that the market thinks one thing or another without some sort of numbers to back up the statement.  With respect to the market discounting a pending event as being a non-event I always turn to volatility.  Specifically, implied volatility. If stock market participants are discounting[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Oct 23, 2016, 8:04 AM

    Weekend Review - Volatility Indexes and ETPs - 10/17 - 10/21

    Weekend Review - Volatility Indexes and ETPs - 10/17 - 10/21

    In a bear market we refer to market bounces as ‘relief rallies’.  The drop in volatility last week may be attributed to some sort of relief, whether with respect to expectations around the coming election or that a good part of earnings season has passed without any catastrophic results.  Whatever the reason the curve moved lower as the S&P moved up slightly and the shape is a little less steep. The long volatility funds had a tough time last week with VXX losing[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Oct 22, 2016, 3:39 PM

    Weekend Review - VIX Futures and Options - 10/17 - 10/21

    Weekend Review - VIX Futures and Options - 10/17 - 10/21

    VIX worked lower as we all survived, endured, or got through the final debate on this Presidential election.  The stock market moving up a little probably helped the cause as well.  November took over as the front month contract and finished the week at 15.575 or a spread of just over 2.20 when compared to the spot index.  This is actually a pretty narrow spread relative to how steep the VIX curve has been over the past few months. On Friday one trader came in with the[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Oct 22, 2016, 3:10 PM

    Weekend Review - Russell 2000 Options and Volatility - 10/17 - 10/21

    Weekend Review - Russell 2000 Options and Volatility - 10/17 - 10/21

    Last week the Russell 1000 (RUI) and Russell 2000 (RUT) both gained a little ground, with RUI rising 0.41% and RUT winning the week by a nose by moving higher by 0.49%.  For the year RUT is about 3.4% higher than RUI. Both VIX and the Russell 2000 Volatility Index (RVX) were lower last week as the equity markets survived (and we endured) the final debate before the presidential election.  The RVX / VIX ratio gained a bit with the drop in volatility but is still off 2016 highs. On[...]

  • Market News | Trader Talk | Trade Ideas | Oct 20, 2016, 3:40 PM

    Earnings Week of 10/24 - 10/28

    Earnings Week of 10/24 - 10/28

    This week is by far the busiest of earnings season with over 100 companies with  Weeklys available for trading reporting results.   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.  Finally, double check the earnings dates as not all were confirmed.

  • Trader Talk | Oct 17, 2016, 10:56 AM

    Bullish Trade for National Pasta Day

    Bullish Trade for National Pasta Day

    In honor of National Pasta Day, I went searching for a trade that is bullish on a restaurant that serves its share of Italian food.  One Friday, I guess in anticipation of a surge in the consumption of food at Olive Garden, someone put on a bull call spread using options on Darden Restaurants (DRI).  When the stock was trading at 62.62 someone came in a purchased the DRI Nov 18th 62.50 Calls for 1.53 and sold the DRI Nov 18th 65.00 Calls for 0.55 and a net cost of 0.98.  A payoff at[...]

  • Market News | Oct 16, 2016, 2:29 PM

    Weekend Review - VIX Futures and Options - 10/10 - 10/14

    Weekend Review - VIX Futures and Options - 10/10 - 10/14

    The tug of war was on and it appears the VIX futures won last week as VIX rose about 20% and the October contract gained only 8%.  When we are in steep contango eventually VIX either rises or the futures give in, this time VIX blinked.  Remember next week October drops off the board and November becomes the front month.  If you are playing the election volatility game we do have Weeklys that expire closer to the vote, but the standard November contract will be the one that gets most[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Oct 16, 2016, 10:43 AM

    Weekend Review - Volatility Indexes and ETPs - 10/10 - 10/14

    Weekend Review - Volatility Indexes and ETPs - 10/10 - 10/14

    On a percentage basis VIX was the big winner among the four S&P 500 related volatility indexes.  VIX gained just over 19% while VXST was up about 13%.  The longer end of the curve is often less responsive to drops in the stock market.  VXV and VXMT behaved as they normally do and rose about 6% and 4% respectively. The long ETPs had a nice week with the unleveraged funds gaining over 5% and the leveraged funds putting up gains of over 10%.  As I like to say, the[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Oct 15, 2016, 9:37 AM

    Weekend Review - Russell 2000 Options and Volatility - 10/10 - 10/14

    Weekend Review - Russell 2000 Options and Volatility - 10/10 - 10/14

    The finish line for 2016 performance is starting to appear in the distance. It was starting to look like small cap stocks would rule the year, but in the past couple of weeks, large cap stocks have started to play a little catch up. Last week the Russell 2000 (RUT) dropped just over 2% while the Russell 1000 (RUI) was down just over 1%. The spread is narrowing with RUT maintaining about a 2.4% lead going into the final stretch that is 2016. When volatility moves up in the form of a higher[...]

  • Market News | Oct 14, 2016, 11:23 AM

    Earnings Week of Oct 17 - Oct 21

    Earnings Week of Oct 17 - Oct 21

    With a couple of exceptions (AAL, PYPL) the data below represents twelve quarters of earnings history.  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.  Finally, double check the earnings dates as not all were confirmed.

  • Market News | Oct 10, 2016, 7:54 AM

    Earnings Week of 10/10 - 10/14

    Earnings Week of 10/10 - 10/14

    Earnings season kicks off this week with AA reporting tomorrow Tuesday before the market opens.  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 | VIX | Trader Talk | Trade Ideas | Oct 9, 2016, 8:00 AM

    Weekend Review - Volatility Indexes and ETPs - 10/3 - 10/7

    Weekend Review - Volatility Indexes and ETPs - 10/3 - 10/7

    The VXST – VIX – VXV – VXMT changed a little last week with the wings (VXST & VXMT) losing a little value and the middle section (VIX & VXV) rising slightly.  I find the drop on Friday in VXST a little perplexing as I was hearing concern with respect to a potential market reaction to the Sunday night debate.  People may have been thinking it, but VXST was not reflecting short term concerns. VIX was higher last week, but all the standard futures contracts[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Oct 8, 2016, 2:31 PM

    Weekend Review VIX Futures and Options - 10/3 - 10/7

    Weekend Review VIX Futures and Options - 10/3 - 10/7

    The only thing that rose last week on the VIX curve below was spot VIX.  The steep contango managed to influence the futures pricing versus spot and even with a small gain in VIX, all standard futures lost value last week.   Despite the divergence in performance between VIX and the futures, we are still in pretty steep contango as the market seems to be braced for some sort of fourth quarter surprise. One trade popped up on Friday that appears to be looking for a spike[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Oct 7, 2016, 6:48 PM

    Weekend Review - Russell 2000 Options and Volatility

    Weekend Review - Russell 2000 Options and Volatility

    Large cap stocks held up relative to small caps with the Russell 2000 (RUT) losing 1.30 last week while the Russell 1000 (RUI) was down only 0.77%.  RUT still holds the 2016 lead by a fairly wide margin up 8.86Z% versus up 5.43% for RUI. Low VIX usually results in a higher RVX / VIX spread.  That contributed to the spread reaching 2016 highs this week, but I have to believe that the RUT underperformance has a part in it as well. I went searching for a RUT option trade from[...]