Education Archives - CBOE Blogs

  • Education | Aug 7, 2017, 8:47 AM

    Take The Markets Seriously, Even When Others Won't

    There is a buzz around markets these days, many are in complete disbelief or denial that the bull market continues to rage on.  The length of this run is now about nine years, and we have barely had any correction.  That is not to say we won't have one coming, and certainly with the bias toward short volatility (skew, tail risk), short SPX puts, and other more esoteric products - there will likely be an unwind that will feel monumental.  There may be no getting around it, and it[...]

  • Education | Strategy | Jan 30, 2017, 3:38 PM

    Trading to Win? Break Those Bad Habits

    We are all creatures of habit, and with so much going around us in our lives at the speed of light we tend to fall into some set routines. That is often the case for us as option traders, and while some routines are efficient and allow us to make quick decisions, others can be quite harmful and cause some dangerous missteps.  Many of us are unaware of these habits, they become instinctual.  When that occurs the bad habits become tough to break. Our habitual characteristics are different[...]

  • Education | Jan 9, 2017, 10:57 AM

    Master the Four Fears of Trading - Part 2

    Last week we discussed two of the four fears of trading, specifically the 'fear of missing out' and the 'fear of loss', today we'll discuss the 'fear of being wrong' and the 'fear of letting a gain turn into a loss'.  Famed trader psychologist Mark Douglas talked about these fears in his stellar book 'Trading in the Zone'.  As traders and investors we all become gripped by the violent reactions of our own emotions. There is nobody who is immune to emotional responses to changes in wealth. [...]

  • VIX | Education | Jan 8, 2017, 4:00 PM

    The Weekly Options News Roundup – 1/8/2017

    The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX Index and volatility-related articles from print, broadcast, online and social media outlets. New Year, New Outlook   The beginning of a new year is an ideal time for investors to assess the state of their portfolios. Besides eating better, joining the health club and cleaning out the closet, here are some resolutions options investors may want to add to their list in 2017. “7 New Year’s[...]

  • Market News | Education | Jan 3, 2017, 10:23 AM

    Getting Past The Four Fears of Trading - Part 1

    As we embark on a new year, we can learn from the past to help us bolster our efforts into the future.  Change is always good, but there are some things very tough to alter - our emotions.  Try as we may to check our emotions at the door, as traders/investors there is often too much going on to just be emotionless.  When money is on the line we suffer from the emotional responses of fear and greed.  We are ALL wired this way and find ourselves somewhere on the spectrum - there[...]

  • Market News | Education | Strategy | Dec 19, 2016, 9:33 AM

    Learn Trading in Different Dimensions

    As traders and investors, we often see outcomes through the prism of win or lose. We will all have both over time, trading is not a game of perfect.The goal of course is to win more than you lose. Some measure their success where they make it into the win/loss column, and while it's true we can only grow our accounts with more wins than losses, to me it's not the only measure of success. But one of the toughest emotions to overcome is a bias toward direction, when what really needs to be examined[...]

  • VIX | Trader Talk | Education | Trade Ideas | Dec 1, 2016, 2:59 AM

    Volatility Panel Discussion at CBOE RMC

    The final session at the 2nd Annual CBOE RMC Asia featured a panel discussion hosted by Steven Sears from Barrons.  The participants were: David Dredge from City Financial Investment Company Pte Ltd Richard Johnston from Albourne Partners (Asia) Limited Benoit Meulot from Nine Masts Capital Limited Laurent Poirot from GF Asset Management Some highlighted quotes from the panel – “For long volatility strategies you have to have some sort of management plan” “There is[...]

  • VIX | Trader Talk | Education | Strategy | Trade Ideas | Dec 1, 2016, 2:47 AM

    Long Volatility Discussion at CBOE RMC

    Govert Heijboer from True Partner Advisor and James Murray from NSW Treasury Corporation split the duties for a discussion titled Implementing Long Volatility Exposures for Hedging and Alpha today in Hong Kong. Murray led off by discussing risk management and the objectives of long volatility risk management strategies.  He noted that there is no free lunch when getting long volatility exposure and strategies are a trade-off between convexity, timing, basis and time decay.  A final thought[...]

  • VIX | Trader Talk | Education | Trade Ideas | Dec 1, 2016, 12:02 AM

    Short Volatility Strategies Discussed at CBOE RMC

    Tanuj Dutt, CFA from Nikko Asset Management and Selim Piot from Barclays Capital teamed up to deliver a session on Implementing Short Volatility Strategies at the 2nd Annual CBOE RMC in Hong Kong today. Piot led things off by discussing how short volatility strategies may be implemented.  He noted the diversification benefits of substituting a part of equity risk with short volatility exposure and followed that thought stating that a portfolio of short volatility across regions and different[...]

  • VIX | Trader Talk | Education | Trade Ideas | Nov 30, 2016, 11:32 PM

    Discussion of Market Dislocations at RMC Asia

    The keynote speaker this morning for the 2nd Annual Risk Management Conference Asia was Rebecca Cheong who is Head of Americas Equity Derivatives Strategy for UBS Securities.  She also grew up in Hong Kong so this was a special treat for her as well as the attendees. Rebecca’s presentation was titled Cross-Asset Dislocations and Market Signal.  She started out discussing the difference between a true Cross-Asset Dislocation and a Temporary Dislocation.  A Temporary Dislocation[...]

  • Market News | Education | Strategy | Trade Ideas | Nov 30, 2016, 1:12 AM

    Wide Variety of CBOE Benchmark Indexes Discussed at RMC

    Matt Moran and Bruce Traan, both from CBOE, delivered the second session at this year’s CBOE Risk Management Conference in Hong Kong.  Bruce kicked things off with a discussion titled “New Developments in Options and Volatility-Based Benchmarks”.  Matt followed with “Options and Volatility Based Benchmark Indexes”. Bruce noted that demand for passive investing is growing and smart-beta is the fastest growing segment of passive investing.  He highlighted[...]

  • Trader Talk | Education | Strategy | Trade Ideas | Nov 29, 2016, 11:49 PM

    Dan Passarelli Discusses Getting a Volatility Edge

    The first presentation at the 2nd Annual Asian version of CBOE’s Risk Management Conference featured an informative tutorial from Dan Passarelli of Market Taker Mentoring.  Dan’s talk was titled Directional Options Strategies and Trade Management. He kicked things off with a quick review of the option greeks and then dove into directional strategies.  He emphasized that trades can start with a directional outlook, but there are other factors that come into play with respect[...]

  • Trader Talk | Education | Oct 5, 2016, 7:02 AM

    59 Years Ago the Russians Won the Space Race - Why Being First is Not Being Best

    Fifty-nine years ago today everyone in the United States was a bit freaked out.  It had nothing to do with the stock market or economy.  It was due to something unseen that was floating over our heads.  The Russians had launched Sputnik, the first artificial satellite to orbit earth.  The Russians had beaten the United States to being the first in space.  The reaction in the US was a combination of fear (does this mean we are behind the Russians militarily as well?) to let’s[...]

  • Market News | Education | Strategy | Election & VIX | Sep 30, 2016, 2:28 PM

    More SPXW and VIX “Election Spread” Expiration Dates for Targeted Strategies

    As the November 8 date for the U.S. Presidential election approaches, I have heard quite a bit of interest from investors in the use of SPX and VIX options and VIX futures with various expirations over the next six weeks.  Added expiration dates provide investors with the opportunity to implement more targeted buying, selling, hedging and spreading strategies. As shown in the two tables below, a September 28 CBOE Circular, and on, by the end of next week there will be SPXW option expirations[...]

  • Market News | Education | Sep 28, 2016, 4:25 AM

    New Paper by Fund Evaluation Group Analyzes CBOE Russell Benchmark Index Suite with Strong Performance by PUTR Index

    This week a new paper by Fund Evaluation Group (FEG) --  Evaluating Options For Enhanced Risk-Adjusted Returns: CBOE Russell 2000 Option Benchmark Suite and Case Studies on Fund Use of Options (2016) - was released and presented at the Fifth Annual CBOE Risk Management Conference (RMC) Europe. A link to the new 18-page paper is at, and below in this blog are 6 of the 30 exhibits in the paper. DESCRIPTIONS OF INDEXES ANALYZED PUTR INDEX HAD HIGHEST GROWTH PUTR[...]