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 | 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[...]

  • 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[...]