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 | Trader Talk | Trade Ideas | May 4, 2015, 2:00 PM

    Earnings This Week (Part 2) - 5/6 - 5/8

    Earnings This Week (Part 2) - 5/6 - 5/8

    Time caught up with me and I was only able to knock out Monday and Tuesday earnings numbers for the week of May 4th to May 8th before this week.  As promised I knocked out the  balance of the week today. 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.

  • Market News | Trader Talk | Strategy | May 3, 2015, 12:00 PM

    The Week in the Russell 2000 - 4/27 - 5/2

    The Week in the Russell 2000 - 4/27 - 5/2

    For most of 2015 small cap stocks, as measured by the Russell 2000, set the pace outperforming the large cap dominated Russell 1000. Last week the tables turned quickly as the Russell 2000 dropped over 3% while the Russell 1000 was down only a little over 0.5%. This is the biggest weekly divergence between large cap and small cap stocks for 2015 and largest since mid-July of last year. In fact, going back to December 1992 there have only been 45 weeks (not including last week) where the Russell 1000[...]

  • VIX | Trader Talk | May 2, 2015, 2:02 PM

    The Week in VIX - 4/27 - 5/1

    The Week in VIX - 4/27 - 5/1

    VIX was up slightly this past week as the S&P 500 dropped a little. VIX futures were down across the board as the lack of movement from VIX. This small disconnect can be attributed to the market getting past a couple of known unknowns (FOMC & GDP). We did have one day of excitement as the S&P 500 was down significantly on Thursday which pushed VIX into the 15’s and kept the May VIX future trading with a 16 handle the whole day. That excitement was short lived as the S&P 500[...]

  • Market News | VIX | Trader Talk | Futures | May 2, 2015, 8:31 AM

    The Week in Volatility Indexes and ETPs - 4/27 - 5/1

    The Week in Volatility Indexes and ETPs - 4/27 - 5/1

    If you took last week off from trading and are playing a little catch up this morning the week over week term structure chart appears to say you didn’t miss much. Aa I type this I think, who would take a break when GDP and FOMC announcements are on the schedule, but now I am getting back on track. Since the picture above misses a 20 point S&P 500 drop on Thursday followed by a 20 point gain on Friday I decided to create a graph showing the lows and highs for VXST, VIX, VXV,[...]

  • Trader Talk | Trade Ideas | Apr 30, 2015, 11:32 AM

    Earnings Next Week (Part 1) - 5/4 - 5/5

    Earnings Next Week (Part 1) - 5/4 - 5/5

    Time caught up with me and I was only able to knock out Monday and Tuesday earnings numbers for the week of May 4th to May 8th.  I'll get the balance of the week done when I return from finals week in my PhD program. 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.   [...]

  • VIX | Trader Talk | Education | Futures | Apr 28, 2015, 1:07 PM

    A Brief History of SPX and VIX Reactions to Advanced GDP

    A Brief History of SPX and VIX Reactions to Advanced GDP

    This morning while conducting a webcast about VIX and extended hours trading I was asked a good question.  This means I didn't know the answer. Tomorrow at 7:30 Chicago time the first iteration of the 2015 First Quarter GDP number will be reported. This will be the first time this number has been released since CBOE began offering extended hours trading for VIX and SPX index options. While talking about this I was asked, “What does VIX usually do in reaction to the Advanced GDP release?”[...]

  • Market News | Apr 26, 2015, 1:47 PM

    Russell 2000 Weekly Recap - 4/20 - 4/24

    Russell 2000 Weekly Recap - 4/20 - 4/24

    Small cap stocks were lower on Friday and the Russell 2000 didn’t get much love as the Nasdaq-100 and S&P 500 put up all-time highs last week. Despite RUT lagging a little there were a couple of Friday trades that at minimum expect the Russell 2000 to stay around current levels over the next few weeks or months. First, there was a trade that seems to expect a neutral to bullish for small cap stocks over the next few months. Early in the day, someone came into the Russell 2000 pit and sold[...]

  • Market News | VIX | Trader Talk | Futures | Apr 25, 2015, 2:55 PM

    The Week in VIX - 4/20 - 4/24

    The Week in VIX - 4/20 - 4/24

    VIX finished the week at 12.29 which is the lowest close since early December. Despite the S&P 500 making a new all-time high to finish the week, the May VIX futures settled at 14.625, a decent premium relative to VIX. We saw this last month until the Non-Farm Payrolls release. After the number the premium came in pretty quickly. We have to wait to see if the pattern repeats as the number does not come out until Friday May 8th. One of the most dynamic VIX spread trades is a risk reversal in[...]

  • Market News | VIX | Trader Talk | Futures | Apr 25, 2015, 10:26 AM

    The Week in Volatility Indexes and ETPs - 4/20 - 4/24

    The Week in Volatility Indexes and ETPs - 4/20 - 4/24

    The S&P 500 managed to reach a record high for the sixth time this year, but all the applause from bulls last week was for the Nasdaq-100 which made an all-time high for the first time in 15 years. All hail tech! All four volatility indexes that are based off S&P 500 option pricing moved lower last week and three of the four are below the 2014 average. Only VXMT, the 6 month version of VIX, remains elevated relative to the 2014 average. I guess bears may be throwing in the towel for the summer[...]

  • Market News | Trader Talk | Apr 24, 2015, 11:03 AM

    Earnings Week of 4/27 - 5/1

    Earnings Week of 4/27 - 5/1

    We have a busy week once again on the earnings front.  The table below shows three years of stock price reaction history relative to earnings releases and anything in italics is less than three years -

  • Market News | Trader Talk | Apr 23, 2015, 6:58 PM

    Block Trade Analysis - EEM Ratio Spread

    Block Trade Analysis - EEM Ratio Spread

    Late Wednesday a big trader came in who appears to have a pretty specific opinion about the Emerging Market Sector.   With less than an hour to go in the trading day there was a buyer of 25,000 EEM May 43.50 Calls at 0.66 who then also sold 50,000 EEM May 44.50 Calls for 0.26. The net result was a trade that does well if EEM moves higher over the next few weeks but not too high. The payoff diagram below shows how this works with a discussion to follow. If held to expiration, this trade[...]

  • Market News | Apr 23, 2015, 6:20 PM

    Investing and Trading for College Students

    Investing and Trading for College Students

    It’s that time of year again at The Options Institute where we prepare to welcome a couple dozen or so students to our Investing and Trading for College Students program. The first session is scheduled for May 19 – 22 with the end of summer session running from August 4 – 7.  In addition to spending time at the CBOE this program includes visits to a variety of investment and trading firms in the Chicago area. For more information click on the link below - Investing and Trading[...]

  • Market News | VIX | Trader Talk | Futures | Apr 19, 2015, 2:16 PM

    The Week in Small Cap Stocks - 4/13 - 4/17

    The Week in Small Cap Stocks - 4/13 - 4/17

    Last week the Russell 2000 moved lower in line with the large cap focused S&P 500, as the RUT was down 1.02% compared to a 0.99% drop in the S&P 500. One method analysts use to gauge small cap risk relative to large cap risk is by comparing the relative levels of VIX and RVX (CBOE Russell 2000 Volatility Index). The chart below shows the daily close for RVX divided by VIX from the beginning of 2014 through Friday along with the average ratio of 1.34 highlighted on the chart. As[...]

  • Market News | VIX | Trader Talk | Futures | Apr 19, 2015, 7:45 AM

    VIX - Week of 4/13 - 4/17

    VIX - Week of 4/13 - 4/17

    We closed a chapter in VIX history with the April 2015 contract going off the board last week and May stepping in to be the new front month. May finished the week over a point closer to the spot VIX index as VIX rose over 10% and the May future only gained about 1.6%. About 45 minutes into the trading day there was a volatility trader looking out to June and expecting VIX to remain below 18.00 or at least be under 18 at June settlement. The trader sold 9,200 VIX Jun 18 Calls at 1.63 and then[...]

  • Market News | VIX | Trader Talk | Futures | Apr 18, 2015, 1:00 PM

    Volatility Indexes and ETPs - Week of 4/13 - 4/17

    Volatility Indexes and ETPs - Week of 4/13 - 4/17

    Despite an ugly Friday both VXST and VIX remains pretty low relative to recent levels. I again included the 2014 average closing levels to the chart below. This inclusion isn’t so much about noting VIX is lower, but that VXV (3 month volatility) moved above the 2014 average and VXMT (6 month volatility) remains higher than what was the average for last year. Do note that VXV got some love this past week in a discussion by Adam Warner which then led to a story on CNBC.   The links[...]