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 | Futures | Mar 14, 2015, 4:15 PM

    The Week in VIX - 3/9 - 3/13

    The Week in VIX - 3/9 - 3/13

    VIX rose just over 5% to finish the week at 16.00. This occurred as the S&P 500 lost just under 1%, but put up the third losing week in a row which has some market observers scratching their heads as to just what the heck is going on. The feeling is that VIX should be higher with the stock market working lower. The curve above still has April and the farther months somewhat elevated relative to the index. It could be the consensus is that we have smooth sailing for the near term,[...]

  • Market News | VIX | Trader Talk | Futures | Mar 14, 2015, 12:28 PM

    The Week in Volatility Indexes and ETPs - 3/9 - 3/13

    The Week in Volatility Indexes and ETPs - 3/9 - 3/13

    The S&P 500 dropped for the third consecutive week with the reaction from the S&P 500 volatility term structure chart being a slight shift to the upside. I altered the term structure graphic that appears below to show where we are right now compared to recently history. My definition of recent history is the average VXST – VIX – VXV – VXMT curve is the average in 2014. What I’ve highlighted here is the spread between the closing levels on Friday and the[...]

  • Market News | Trader Talk | Mar 13, 2015, 9:16 PM

    Block Trade Analysis - Long Dated USO Put Spread

    Block Trade Analysis - Long Dated USO Put Spread

    When I arrived in NY Thursday late Thursday night I ended up with a cab driver who sounded just like Joe Pesci. In fact when he started talking to me I thought it was coming from the video screen in the back seat so I leaned forward to mute the noise. However, the noise never ended… He asked what I do for a living and when options came up his very excited response was, “I want to buy oil options, it’s going to move and I want to know how to make some money when it starts to go back[...]

  • Market News | Trader Talk | Mar 12, 2015, 5:57 PM

    Block Trade Analysis - OTM Russell 2000 Bear Call Spread

    Block Trade Analysis - OTM Russell 2000 Bear Call Spread

    The recently blocks I’ve written up in the Russell 2000 tended to be trades in short dated out of the money put options. Despite being on the put side of the equation these big trades were bullish spreads. Typically the Russell 2000 would need to drop several percentage points for those trades to turn sour. Well today it appears someone turned the tables and decided to go with an out of the money bear call spread. Over 64,000 RUT Mar 20th 1280 and 1290 Calls traded today and the best I can[...]

  • Technical Analysis & Charts | Trader Talk | Strategy | Mar 11, 2015, 11:28 AM

    Comparing SPX and MSCI Price Action

    Comparing SPX and MSCI Price Action

    Today CBOE set the date (pending regulatory approval) for the launch of trading of the MSCI EAFE (EAFE) and MSCI Emerging Markets (EEM) index options. Recently I was at a conference where an individual trader told me all he trades is SPX.   He said he loves (his words not mine) the cash settlement feature of SPX options. He went on to say he’d been looking around for another index option market to trade and said he felt EAFE and EEM were going to give him that[...]

  • Market News | VIX | Trader Talk | Mar 8, 2015, 1:09 PM

    The Week in Small Cap Stocks and Volatility - 3/2 - 3/6

    The Week in Small Cap Stocks and Volatility - 3/2 - 3/6

    With the sell off on Friday, the Russell 2000 was down 1.29% while the Russell 1000 lost 1.51% last week. Small cap stocks underperformed large caps in 2014 and many have expected this to carry over into 2015. However, so far the Russell 2000 has held its own and is up 1.06% for the year which is basically in line with the performance of the Russell 1000. In the volatility space the CBOE Russell 2000 Volatility Index was higher gaining just over 7%. RVX is often considered a measure of small cap[...]

  • Market News | VIX | Trader Talk | Futures | Mar 8, 2015, 10:02 AM

    The Week in VIX - 3/2 - 3/6

    The Week in VIX - 3/2 - 3/6

    VIX moved up to a much greater extent than the front month futures this past week. This is a direct function of the extra risk premium that was priced into near dated VIX futures going into the always treacherous week with the Wednesday ADP number and official unemployment reading that comes out before the equity market opened on Friday. This is not the first time I have pointed this out, but it is definitely worth noting. Check the curve and specifically take a look at April which appears to be[...]

  • Education | Futures | Trade Ideas | Mar 7, 2015, 3:34 PM

    Cross-Asset Volatility Discussion at CBOE Risk Management Conference

    Cross-Asset Volatility Discussion at CBOE Risk Management Conference

    One of the final presentations given at the 31st Annual CBOE Risk Management Conference this year was an in depth discussion of volatility across asset classes.   Brandon Bates, Portfolio Manager at BlackRock and Benjamin Bowler, Co-Head of Global Equity Derivatives Research at Bank of America Merrill Lynch co-presented the session titled Leveraging Cross-Asset Volatility Dynamics in Forecasting and Trading. With the emergence of volatility as an asset class it appears that volatility across[...]

  • Market News | VIX | Trader Talk | Futures | Mar 7, 2015, 12:12 PM

    The Week in VIX Indexes and ETPs - 3/2 - 3/6

    The Week in VIX Indexes and ETPs - 3/2 - 3/6

    On Friday I was a bit distracted by trying to keep up with what was going on in Carlsbad at the CBOE Risk Management Conference while simultaneously attending the monthly residency in Oklahoma for an academic program I’m immersed in.   This morning (Saturday) I just got around to looking at the market action on Friday. I was already aware that the VIX term structure did not go into backwardation on Friday as I could see that at www.cfe.cboe.com. What surprised me is the shape of the[...]

  • VIX | Trader Talk | Education | Mar 6, 2015, 2:00 PM

    Correlation Between Stocks and Sectors Discussion at RMC

    Correlation Between Stocks and Sectors Discussion at RMC

    Jason Goldberg, Portfolio Manager at PIMCO and Marko Kolanovic, Global Head of Quantitative and Derivatives Strategy from JP Morgan teamed up this morning atCBOE's Risk Management Conference (RMC) in Carlsbad, CA for a presentation billed as Correlation Between Stocks and Between Sectors. This presentation was a combination of educational and informative, discussing what traders can learn from trading in correlation and dispersion along with analysis of recent correlations across different markets. Jason[...]

  • Trader Talk | Education | Strategy | Mar 4, 2015, 5:30 PM

    Presentation on Backtesting Strategies at RMC Today

    Presentation on Backtesting Strategies at RMC Today

    This afternoon at the CBOE Risk Management Conference in Carlsbad, CA Amna Qaiser, Portfolio Manager from Goldman Sachs Asset Management and Olivier Sarfati, Head of US Trading Strategies from Citigroup teamed up to discuss backtesting strategies. Backtesting has always been a difficult subject for portfolio managers and traders as backtested results do not always work as well as hoped when the strategy goes live. Qaiser’s part of this session discussed potential pitfalls but also laid out[...]

  • Market News | VIX | Trader Talk | Futures | Mar 1, 2015, 10:07 AM

    The Week in VIX - 2/23 - 2/27

    The Week in VIX - 2/23 - 2/27

    The S&P 500 hardly budged on a week over week basis and VIX drifted lower. The March future drifted lower basically in sync with the index, but is still at a health premium relative to the index. I’m attributing that to the pending employment numbers coming out next week. I need to do a study and see what happens with that spread on the weeks that we get the employment report. I wouldn’t be surprised to see the gap narrow post-employment as there is often no pending market moving[...]

  • VIX | Trader Talk | Education | Futures | Feb 28, 2015, 7:47 AM

    The Week in Volatility Indexes and ETPs - 2/23 - 2/27

    The Week in Volatility Indexes and ETPs - 2/23 - 2/27

    Last week was fairly quiet despite the second revision of GDP coming in a little light. We may see a little more volatility action in the coming week as on Wednesday the ADP Employment Change report is released Wednesday before the open and then the government version of the employment report coming on Friday. Both of these reports are significant as they are a first look at economic activity for February. Despite the S&P 500 losing a little value last week, with Friday to blame, the VXST –[...]

  • Trader Talk | Trade Ideas | Feb 25, 2015, 2:22 PM

    Earnings Next Week - 3/2 - 3/6

    Earnings Next Week - 3/2 - 3/6

    Just completed and presented for your information - earnings history for the stock with Weeklys available reporting next week.  Histories represent 3 years or 12 quarters unless italicized which indicates less than 3 years of data is available -  

  • Market News | Trader Talk | Strategy | Feb 25, 2015, 10:00 AM

    Combining CBOE and MSCI Gives Investors the World

    Combining CBOE and MSCI Gives Investors the World

    In a few weeks CBOE will begin listing options on two of the widely followed MSCI Indexes. This addition of cash settled index options on the MSCI EAFE and MSCI Emerging Market Indexes will result in investors being able to gain exposure to just about every investible market in the world by trading at CBOE. After such a bold statement, an explanation is definitely in order. Before discussing the world I’ll address the United States. On a notional basis the S&P 500 (SPX) Index option market[...]