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.

  • Market News | Trader Talk | Trade Ideas | Apr 18, 2015, 10:55 AM

    Earnings Next Week - 4/20 - 4/24

    Earnings Next Week - 4/20 - 4/24

    The calendar is heavy next week and I do apologize for not posting this a little earlier.  Luckily the majority of companies reporting next week release their numbers on Wednesday or Thursday so there are plenty of opportunities to place a short term option trade based on your outlook for an earnings reaction. As always this list represents three years of earnings reaction history, except when italicized, which indicates there is less than three years of data to work with.  Max is the biggest[...]

  • Market News | Trader Talk | Education | Apr 14, 2015, 2:30 PM

    New Index Option Trading Opportunities at CBOE

    New Index Option Trading Opportunities at CBOE

    Next week, specifically Tuesday April 21st, CBOE will roll out option trading on two indexes calculated by MSCI. The MSCI EAFE (Europe, Australasia, and Far East) and MSCI Emerging Markets (EEM) Index will be the first two of several index option markets based on the MSCI family of indexes that will have listed options available for trading at CBOE. These two new markets will give money managers an efficient method for managing risk exposure to equity markets outside the United States. There will[...]

  • Market News | VIX | Trader Talk | Futures | Apr 12, 2015, 9:13 AM

    The Week in VIX - 4/6 - 4/10

    The Week in VIX - 4/6 - 4/10

    The S&P 500 put up a nice week and VIX came under pressure closing Friday at the low for 2015. Take it how you want, either that there is nothing to worry about for the markets or there is too much complacency and we are ‘doomed’ (my favorite Charlie Brown word) to experience a pullback in 2015. Either way, if you are concerned about a market correction this year, there appears to be a sale on SPX options. VIX option volume was well over 1,000,000 contracts with one big trade attributing[...]

  • Market News | VIX | Trader Talk | Strategy | Apr 11, 2015, 10:14 AM

    The Week in Volatility Indexes and ETPs - 4/6 - 4/10

    The Week in Volatility Indexes and ETPs - 4/6 - 4/10

    Last week the S&P 500 was strong and volatility indexes were weak. I have been focusing on where the VXST – VIX – VXV – VXMT term structure curve has been in 2015 compared to the averages last year. For the first time in a while VXV dipped below the 2014 average with only 6 month SPX implied volatility still higher than the 2014 average so there may still be a little long term concern about the equity markets looming. Over the near term VXST under 10 and VIX back to the tweens[...]

  • Market News | Trader Talk | Apr 10, 2015, 9:15 AM

    Block Trade Analysis - TWTR from 4/9/2015

    Block Trade Analysis - TWTR from 4/9/2015

    Earlier this week I was asked about option volume in shares of Twitter (TWTR) so the stock is sort of on my radar screen these days. Looking over block trading data from yesterday I came across the following trades that were done in two blocks of 15,000 late Thursday – Sell 30,000 TWTR Apr 17th 47 Puts at 0.05 Buy 30,000 TWTR Apr 17th 47 Calls at 5.10 Buy 30,000 TWTR May 15th 47 Puts at 1.48 Sell 30,000 TWTR May 15th 47 Calls at 6.55 Net Credit = 0.02 Since there are some TWTR rumors flying[...]

  • Market News | Trader Talk | Apr 8, 2015, 4:08 PM

    Earnings Next Week - 4/13 - 4/17

    Earnings Next Week - 4/13 - 4/17

    Things start to get a bit busier with about 20 companies with short dated options reporting earnings.  Three years of price reaction history is in the table below -  

  • Market News | Trader Talk | Apr 2, 2015, 9:11 AM

    Earnings Next Week - 4/6 - 4/10

    Earnings Next Week - 4/6 - 4/10

    Alcoa reports next week and even though the stock was booted from the Dow Jones Industrial Average a few quarters ago traditionalists (old guys like me) still consider AA earnings the beginning of earnings season.  The calendar is light next week, but hold on to your hat, things are going to get busy soon. For newbies, the table below summarizes the last 12 quarters of stock price reactions to earnings reports with biggest rally, drop, average move, and what happened last quarter.

  • VIX | Strategy | Mar 24, 2015, 9:05 AM

    SPX Weekly Bear Call Spread Analysis

    SPX Weekly Bear Call Spread Analysis

    I’ve seen several trades using RUT options to initiate out of the money credit spreads as of late. However, I just came across a pretty interesting one using SPX options. There was a seller of SPX Mar 27th 2140 Calls at 0.35 who also purchased the SPX Mar 27th 2150 Calls at 0.15 for a net credit of 0.20. As long as the S&P 500 is not over 2140 on the close this coming Friday the credit of 0.20 will result in a profit. The payoff diagram below shows the risk – reward of this trade[...]

  • Market News | Trader Talk | Mar 23, 2015, 5:27 PM

    Earnings This Week - 3/23 - 3/27

    Earnings This Week - 3/23 - 3/27

    A more appropriate title for this blog would be "Earnings Later This Week" as there are only four stocks with short dated options reporting earnings this week and they all report either Thursday or Friday.    The list below depicts three years of earnings history with the biggest move higher, lower, average move, and what the stock did last quarter shown for each stock.

  • Market News | Trader Talk | Mar 22, 2015, 4:29 PM

    The Week in Small Cap Stocks - 3/16 - 3/20

    The Week in Small Cap Stocks - 3/16 - 3/20

    Small cap stocks widened the lead against large cap stocks for 2015 as the Russell 2000 was up 2.78% while the Russell 1000 advanced by 1.95% last week. That places the Russell 2000 up 5.12% while the Russell 1000 is now up 2.96% for 2015. The volatility markets diverged a bit from the small cap outperforming large cap stocks as the large cap focused VIX lost 18.63% while the CBOE Russell 2000 Volatility Index (RVX) was down 16.48% for the week. Despite this the RVX / VIX spread remains a low levels[...]

  • VIX | Trader Talk | Futures | Mar 22, 2015, 8:56 AM

    The Week in VIX - 3/16 - 3/20

    The Week in VIX - 3/16 - 3/20

    Last week VIX experienced the second biggest week over week percentage drop for 2015. The largest move lower occurred the week before the three day Martin Luther King holiday weekend so that one may need to be given an asterisk.   However, VIX going back to the tweens last week should not be ignored as an indication of a new round of equity market complacency sinks in. Someone needs to tell that to the April VIX futures which remain at a pretty high premium (over 3 points) relative to the[...]

  • Market News | VIX | Trader Talk | Strategy | Mar 21, 2015, 2:48 PM

    The Week in Volatility Indexes and ETPs - 3/16 - 3/20

    The Week in Volatility Indexes and ETPs - 3/16 - 3/20

    I’m repeating the alteration I did last week to the term structure chart below. Instead of a week over week comparison I show the closing levels for VXST, VIX, VXV, and VXMT relative to the average levels in 2014. Note that near term volatility has thrown in the towel, but concern about a potential downturn for the equity market persists in the three and six month time frames.  Longer dated volatility is still elevated, despite dropping last week in sync with VXST and VIX. A 2.66% rally[...]

  • Market News | Trader Talk | Mar 19, 2015, 11:32 AM

    Block Trade Analysis - Emerging Market Bull Put Spread

    Block Trade Analysis - Emerging Market Bull Put Spread

    Early yesterday, long before Janet Yellen shared her insights with the world, there was a block trade I came across with a bullish outlook for Emerging Markets. About 5 minutes after the opening bell rang there was a large seller of the EEM Apr 17th 39 Puts at 0.79 who purchased a similar number of EEM Apr 17th 37 Puts at 0.26 for a net credit of 0.51. At the time of the trade EEM was trading around 39.10, but moved higher in sync with the equity market rally that occurred after the FOMC announcement[...]

  • Trader Talk | Mar 16, 2015, 7:38 PM

    Earnings This Week - 3/17 - 3/20

    Earnings This Week - 3/17 - 3/20

    Apologies all around for the lateness of this post, but better late than never.  Only a handful of stocks with short dated options report this week.  As always the histories represent three years of the biggest up move, biggest drop, average move, and the stock price reaction to earnings last quarter.

  • Market News | VIX | Trader Talk | Futures | Mar 15, 2015, 8:15 AM

    The Week in Small Caps - 3/9 - 3/13

    The Week in Small Caps - 3/9 - 3/13

    Small cap stocks continue to shine relative to large caps. The Russell 2000 was up 1.2% last week while the S&P 500 actually lost value. The perceived risk for investing in large cap stocks rose last week with VIX climbing over 5%. It was a different story for the CBOE Russell 2000 Volatility Index (RVX) which was higher, but only by 0.62%. Also, the front three month futures contracts actually lost value last week. The wide spread that was common between RVX and VIX for most of 2014 has not[...]