Rhoads-Russell

Russell Rhoads, CFA

Russell Rhoads, CFA, is Director of Education for the CBOE Options Institute. His career before 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 for the CBOE, he is an adjunct instructor at Loyola University and the University of Illinois - Chicago. 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 of December 2017.

  • Market News | Jul 4, 2015, 8:59 AM

    The Week in Volatility Indexes and ETPs - 6/29 - 7/2

    The Week in Volatility Indexes and ETPs - 6/29 - 7/2

    We had the most exciting market action during the holiday shortened week. As everyone knows we can thanks the cradle of civilization Greece for all the hub bub. On Monday the S&P 500 was down over 2% for the first time since October of last year. VIX reacted accordingly by rising over 34% on the day for the biggest one day move in over two years. Despite the S&P 500 rebounding a bit, the VXST – VIX – VXV – VXMT curve continues to signal some concern. The VXST to VIX premium[...]

  • Market News | Jul 2, 2015, 11:56 PM

    Earnings Next Week - 7/6 - 7/10

    Earnings Next Week - 7/6 - 7/10

    Alcoa kicks things off, but it is still a pretty light week.  We won't have to wait for long as the earnings floodgates always open just after AA's numbers come out.  Three years of earnings history reaction for the three stocks reporting next week -

  • VXX Block Trade from Monday

    VXX Block Trade from Monday

    Monday of this week was one of the more exciting days we have had in 2015. That’s probably an understatement since VIX futures volume was the highest it has been this year. When the S&P 500 is down and volatility is up there are traders always looking to take the other side of the move. Either through selling volatility or through getting long the stock market. The iPath S&P 500 Short Term Futures ETN (VXX) market is one instrument that can move quickly to the upside when the S&P[...]

  • Market News | Trader Talk | Strategy | Trade Ideas | Jun 30, 2015, 3:15 PM

    Bullish EEM Trade from Monday

    Bullish EEM Trade from Monday

    As CBOE expands the number of markets available for trading to include foreign indexes we are going to do the same in this space every Tuesday through taking a look at derivatives based on the MSCI family of indexes.  With the weakness in global markets on Monday I decided to search around for a trade in EEM ETF options that may be trying to take the other side of low equity prices. The daily chart below shows that EEM was down about 2.4% which was a bit more than the drop in[...]

  • Market News | VIX | Trader Talk | Futures | Strategy | Jun 29, 2015, 5:52 PM

    Today in VIX, SPX, and RUT - 6/29/2015

    Today in VIX, SPX, and RUT - 6/29/2015

    A lot went on today as the Greece thing seemed to come to a head. Below are some highlights with respect to the CBOE Volatility Index, the S&P 500, and the Russell 2000 with respect to the reaction of global markets to the news out of Greece. Spot VIX rose just over 34% and the front month July futures contract was up almost 20%. Volume in VIX futures appears to have topped 400,000 for the first time this year. July and August settled within a tick of each other which is a positive for the long[...]

  • Market News | VIX | Trader Talk | Education | Jun 28, 2015, 10:59 AM

    The Week in Russell 2000 Trading - 6/22 - 6/26

    The Week in Russell 2000 Trading - 6/22 - 6/26

    Both indexes were lower last week, but the Russell 2000 (RUT) slightly outperformed the Russell 1000 (RUI) and continued to maintain a wide performance gap for 2015. The chart below indexes both the RUT and RUI to 100 as of the last day of 2014 to get an apples to apples visual of their respective performance. As of Friday RUT was up 6.23% while RUI has gained 2.58% this year. The CBOE Russell 2000 Volatility Index (RVX) was down 0.05 for the week finishing at 16.18 while the CBOE Volatility[...]

  • Market News | Jun 27, 2015, 12:12 PM

    The Week in VIX - 6/22 - 6/26

    The Week in VIX - 6/22 - 6/26

    VIX was up slightly last week, but the futures took their own path and were lower across the board. The July premium went from about 1.50 to 0.50 relative to spot VIX which is a bit surprising since we have the monthly employment report coming on Thursday before we all enjoy the birth of our country with a long weekend. I came across a usual spread trade on Friday, at least unusual at first glance. There was a seller of VIX Jul 18 Calls at 0.61 who purchased VIX Jul 21 Calls at 0.40 for a net credit[...]

  • Market News | VIX | Trader Talk | Futures | Jun 27, 2015, 9:41 AM

    The Week in Volatility Indexes and ETPs - 6/22 - 6/26

    The Week in Volatility Indexes and ETPs - 6/22 - 6/26

    VIX rose less than one half one percent last week as the S&P 500 was down slightly. I would normally say there was not much change in risk perception for the broad US stock market, but that seems to be only true at the 30-day time horizon.   Note the VXST – VIX – VXV – VXMT term structure chart below shows a rise in VXST (9-day), but also a drop in VXV (3-month) and VXMT (6-month) last week. It may just be that despite the continued pushing out of the problems related[...]

  • Market News | VIX | Trader Talk | Strategy | Jun 25, 2015, 11:25 AM

    Block Trades - One Bullish and One Bearish VIX Option Trade

    Block Trades - One Bullish and One Bearish VIX Option Trade

    When I disagree with someone with respect to an outlook for the market or particular stock I with often use the phrase, “that’s what makes a market”. What I mean by that is it takes people with differing opinions to create a viable and tradeable market. As I was looking at the trading activity in the VIX option arena earlier this week I can across one bullish and one somewhat bearish trade that occurred on the same day. First I’ll take a quick look at the bullish trade. Early[...]

  • Market News | Trader Talk | Jun 23, 2015, 4:06 PM

    This Friday Completes the 2015 Russell Reconstitution Process

    This Friday Completes the 2015 Russell Reconstitution Process

    The last Friday of June means different things to different people. When I was growing up, that was the day before the Rhoads family embarked on their annual vacation to the Florida Gulf Coast. Now that I’m all grown up (which may be debatable at times) and spend most of my time focusing on the financial markets, the last Friday in June represents the annual restructuring of the Russell family of indexes. This process is commonly referred to as the Russell Reconstitution. A couple of weeks[...]

  • Market News | Jun 21, 2015, 9:30 AM

    The Week in Russell 2000 Trading - 6/15 - 6/19

    The Week in Russell 2000 Trading - 6/15 - 6/19

    Small cap stocks dominated last week as the Russell 2000 (RUT) rose 1.55% and even put up an all-time record close on Thursday. Large cap stocks fared OK with the Russell 1000 (RUI) rising 0.66% last week, but unlike the RUT, RUI did not manage to put in a new all-time closing high. We have almost reached the middle of the year and so far RUT is up 6.64% while RUI has risen 3.05%. Large cap expected volatility is best represented by the CBOE Volatility Index (VIX) which was a tad higher last week,[...]

  • Market News | VIX | Trader Talk | Futures | Jun 20, 2015, 12:37 PM

    The Week in VIX - 6/15 - 6/19

    The Week in VIX - 6/15 - 6/19

    I promise there are two curves on the figure below showing the week over week changes for VIX and the active VIX futures contracts. All were higher with the exception of the December contract which finished the week unchanged. This just increased the ‘divot’ that we see each year with December volatility. Trading wise, someone used the Thursday dip in VIX to take a bullish position on volatility using July VIX Options. This trade took the form of buying the VIX Jul 17 Call for 1.10 and[...]

  • Market News | Jun 20, 2015, 8:10 AM

    The Week in Volatility Indexes and ETPs - 6/15 - 6/19

    The Week in Volatility Indexes and ETPs - 6/15 - 6/19

    The S&P 500 rose about 3/4% to finish the week over 2100. The term structure of volatility shifted slightly high last week, despite the gain in the S&P 500. That’s a little perplexing, until you consider the continued potential exit of Greece from the Eurozone which I hear commonly referred to as Grexit, despite some market watchers claiming the markets have grown tired of waiting for the potential Grexit to come to fruition. I have decided to try to coin a new term around this –[...]

  • Market News | Jun 18, 2015, 4:30 PM

    Earnings Next Week - 6/22 - 6/26

    Earnings Next Week - 6/22 - 6/26

    Things continue to pick up in the earnings world with five companies reporting next week.  The numbers on the table represent three years of history with Max being the biggest gain, Min being the biggest drop, Abs Avg representing the average move (higher or lower), and Last Q being what the stock did in reaction to earnings three months ago.

  • Market News | VIX | Trader Talk | Futures | Strategy | Jun 18, 2015, 10:50 AM

    Block Trade Analysis - Short VIX Straddle + Long OTM Call

    Block Trade Analysis - Short VIX Straddle + Long OTM Call

    The June 2015 VIX futures and options met their demise on the open yesterday with settlement coming in at 14.67. One trader moved on to the following month with a trade structure that is unique in the option world, but pretty common in VIX world. Mid-morning on Wednesday a trader sold 22,800 VIX Jul 15 Calls for 1.73 and 22,800 VIX Jul 15 Puts at 1.18 who then completed the trade through purchasing 22,800 VIX Jul 22 Calls at 0.72 for a net credit of 2.19. The payoff at expiration appears below with[...]