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 | VIX | Trader Talk | Strategy | May 25, 2015, 3:43 PM

    The Week in Russell 2000 Option Trading - 5/18 - 5/22

    The Week in Russell 2000 Option Trading - 5/18 - 5/22

    Small cap stocks took the lead from large cap stocks for 2015 last week as the Russell 2000 (RUT) was up 0.66% while the Russell 1000 (RUI) rose only 0.20%. That places RUT slightly in the lead up 3.94% for 2015 versus RUI up 3.73% for the year. I came across an article from Friday that was discussing how low volatility is for the Russell 2000. I always like to think of volatility in relative terms and for the CBOE Russell 2000 Volatility Index (RVX) this means comparing it to VIX. Using[...]

  • Market News | VIX | Trader Talk | Futures | May 25, 2015, 9:32 AM

    The Week in VIX - 5/18 - 5/22

    The Week in VIX - 5/18 - 5/22

    The VIX futures curve was lower last week with June losing more than the index or other futures as it was awarded the official title of “Front Month” with May VIX futures and options settling on the open Wednesday. Below I’ve changed things up a bit and the comparison is a year over year look at VIX and the VIX futures from Friday and a year ago on the Friday before Memorial Day. I was visiting the VIX pit with the attendees of the May version of The Option Institute’s Investing[...]

  • VIX | Trader Talk | Education | Futures | May 24, 2015, 12:32 PM

    The Week in Volatility Indexes and ETPs - 5/18 - 5/22

    The Week in Volatility Indexes and ETPs - 5/18 - 5/22

    The S&P 500 moved up a little last week and the volatility curve moved lower. On the shorter dated end of the volatility term structure chart, there was the three day weekend effect which helped push VXST and VIX a tad bit lower than would be expected in front of a normal two day weekend. Just for the heck of it, I took a look at the curve 52 weeks ago and added it to the diagram below. I expected the 2015 pre-Memorial Day weekend curve to be higher than the 2014 version, but was surprised at[...]

  • Trader Talk | Strategy | Trade Ideas | May 23, 2015, 8:28 AM

    Block Trade Analysis - $RUT 850 / 1160 Bull Put Spread

    Block Trade Analysis - $RUT 850 / 1160 Bull Put Spread

    Author's note - this is an updated blog from last week correcting the strike of the short put.   Thanks to Robert Shen for the catch. Volume continues to rise in the Russell 2000 (RUT) option arena and my choices among block trades to discuss are on the rise as well. A trade from this past Tuesday caught my eye for three reasons. First, it was not a short dated deep out of the money credit spread – most of the trades I’ve come across and discusses recently in[...]

  • Market News | Trader Talk | May 21, 2015, 8:42 AM

    Earnings Next Week - 5/26 - 5/29

    Earnings Next Week - 5/26 - 5/29

    Next week is a short week, but there are ten companies reporting their earnings. As always Max is the biggest gain in response to earnings, Min is the biggest drop, Abs Average is the average magnitude of the moves, and Last Q is what the stock did last quarter in response to earnings.  Finally, all numbers represent three years unless italicized which is this case is PANW and WDAY which both have 2 1/2 years of history to work with.

  • Market News | VIX | Trader Talk | Futures | May 17, 2015, 9:39 AM

    The Week in Russell 2000 Trading - 5/11 - 5/14

    The Week in Russell 2000 Trading - 5/11 - 5/14

    Small cap stocks narrowed the performance gap with large cap stocks last week. The Russell 2000 (RUT – 1243.95) rose 0.73% which places 2015’s price performance at up 3.26% while the Russell 1000 (RUI – 1184.73) gained 0.37%. Large cap stock performance is still slightly better than year to date small cap performance as the Russell 1000 is up 3.53% for 2015. The chart below adjusts both indexes to start the year at 100 for an easy visual comparison. The CBOE Russell[...]

  • Market News | VIX | Trader Talk | Futures | May 16, 2015, 4:19 PM

    The Week in VIX - 5/11 - 5/15

    The Week in VIX - 5/11 - 5/15

    There was a fairly parallel shift lower in spot VIX and VIX futures pricing as there wasn’t much to get excited about last week. The May VIX future dropped a little more than the spot index as expiration is just around the corner. Despite the almost 5% drop in the May contract, the premium relative to spot VIX is about 1.30. The premium of the May futures contract relative to spot VIX got me looking into various puts that expire Wednesday morning. I copied down the[...]

  • Market News | VIX | Trader Talk | Futures | May 16, 2015, 2:31 PM

    The Week in Volatility Indexes and ETPs - 5/11 - 5/15

    The Week in Volatility Indexes and ETPs - 5/11 - 5/15

    There was a slight shift in the VXST – VIX – VXV – VXMT term structure last week. VXST and VIX were down, VXV was actually up slightly and VXMT dropped. Relative to history, VXV and VXMT are higher than you would expect with the S&P 500 making all-time highs. I’m convinced the market is braced for a difficult end to 2015. VXX and the other long oriented ETPs continue to grind lower as VIX stays at low levels and the futures maintain contango. SKEW stands out[...]

  • Market News | Trade Ideas | May 14, 2015, 11:34 AM

    Earnings Week of 5/18 - 5/22

    Earnings Week of 5/18 - 5/22

    It's all about retail next week.  As always Max is the biggest gain in response to earnings, Min is the biggest drop, Abs Average is the average magnitude of the moves, and Last Q is what the stock did last quarter in response to earnings.  

  • VIX | Trader Talk | Futures | May 12, 2015, 9:22 AM

    More Color on the Big $VIX Trade

    More Color on the Big $VIX Trade

    I get to CBOE each morning about 7:15 and by 7:16 I was running around the floor trying to find out a little more about the VIX roll from yesterday. First, I’ll start at the beginning. It appears this all began back on April 10th when the trade that got rolled forward yesterday was opened. Back in April about 180,000 VIX Jun 17 Calls were purchased for 1.74 and about 360,000 VIX Jun 23 Calls were sold at 0.82. I keep using ‘about’ as a hedge clause because the actual trade[...]

  • Market News | VIX | May 11, 2015, 7:57 PM

    Large Ratio Call Spread Roll in $VIX Options Today

    Large Ratio Call Spread Roll in $VIX Options Today

    It appears one volatility trader believes a spike is on the horizon for VIX, but altered the timing of their outlook today. They were prepared for a move to the upside before June expiration, but rolled their position out to VIX options expiring July 22. The specific position was long 180,000 VIX Jun 17 Calls plus short 360,000 VIX Jun 23 Calls (1 x 2) which was rolled out to long 180,000 VIX Jul 17 Calls plus short 360,000 VIX Jul 23 Calls in a big rolling trade at CBOE today. My hope is to[...]

  • The Week for Russell 2000 Trading - 5/4 - 5/8

    The Week for Russell 2000 Trading - 5/4 - 5/8

    Small cap stocks played a little catch up last week with the Russell 2000 rising 0.55% while the Russell 1000 gained 0.35%.   Like all broad based market indexes in the US last, the positive performance came from the market’s reaction to Friday’s employment report. Large cap stocks actually ruled the day on Friday with the benchmark Russell 1000 gaining 1.2% while the Russell 2000 rose by about 0.75%. For a perspective on the relative performance of large and small cap stocks[...]

  • Market News | Trader Talk | Futures | Trade Ideas | May 10, 2015, 12:00 PM

    The Week in VIX - 5/4 - 5/8

    The Week in VIX - 5/4 - 5/8

    VIX was slightly higher and the futures were mostly lower with a couple of exceptions last week. There was a bit of excitement in the middle of the week so I included an extra piece to the graph below and decided to show Wednesday’s highs for VIX and the futures market.  If I had not done that it would be pretty difficult to see there are two different lines showing VIX closing levels on the 1st and the 8th. We all know that Friday was the employment number with the stock market rallying[...]

  • Market News | VIX | Trader Talk | Strategy | May 10, 2015, 9:36 AM

    The Week in Volatility Indexes and ETPs - 5/4 - 5/8

    The Week in Volatility Indexes and ETPs - 5/4 - 5/8

    Despite a dip midweek, the S&P 500 recovered to put up a winning week on the heels of the non-farm payrolls report. Friday’s 28 point rally salvaged weekly performance, but this was not enough to push VIX to a week over week loss.  Since January 1990 there have been 178 weeks where the S&P 500 and VIX were both higher. I ran some quick numbers and of those 178 weeks, the S&P 500 was higher the 102 times and lower the other 76 weeks after both moved higher in sync. I was a little[...]

  • Market News | Trader Talk | Strategy | Trade Ideas | May 8, 2015, 8:45 AM

    Earnings Next Week - 5/11 - 5/14

    Earnings Next Week - 5/11 - 5/14

    Things start to lighten up a bit as far as earnings season goes next week, but there are still 19 stocks with short dated options available for trading the report next week. As always Max is the biggest gain in response to earnings, Min is the biggest drop, Abs Average is the average magnitude of the moves, and Last Q is what the stock did last quarter in response to earnings.  Finally, all numbers represent three years unless italicized.