Education Archives - Cboe Blogs

  • Market News | Education | Jul 16, 2015, 11:10 AM

    Agenda for RMC Europe, CBOE Presents 35 Speakers

    Agenda for RMC Europe, CBOE Presents 35 Speakers

    The Fourth Annual CBOE Risk Management Conference Europe will occur on September 28 - 30, 2015, at the InterContinental Hotel in beautiful Geneva, Switzerland. This week the Agenda and List of 35 Speakers for RMC Europe were published at www.cboermceurope.com.  Hosted by the CBOE, RMC is an educational forum dedicated to exploring the latest products, trading strategies and tactics used to manage risk exposure and enhance yields. RMC brings together top traders, strategists and researchers,[...]

  • Education | Strategy | Trade Ideas | Jul 15, 2015, 4:01 PM

    Trade Analysis - Selling $SVXY Puts

    Trade Analysis - Selling $SVXY Puts

    Editors note - we would like to welcome Meredith Kelley Zidek as a new contributor to the CBOE Options Hub.  Meredith is a private investor whose interests include equities, options, and commodities.  She began trading equities in 2007, and since then has cultivated interests in corn, energy, and most recently, index and equity options. Almost all of her trading, which can be seen on grapestrades.blogspot.com, involves short options on volatility-related instruments.  She studies the[...]

  • Market News | Education | Jul 14, 2015, 1:25 PM

    Comparing S&P 500 and MSCI EAFE Performance

    Comparing S&P 500 and MSCI EAFE Performance

    CBOE launched option trading on the MSCI EAFE (MXEA) index a couple of months ago. MXEA represents the performance of developed equity markets outside of the United States. There are over 900 stocks contributing to the index that cover over 20 different developed countries. As a former spread trader I always like to take a look at the performance of similar markets. Today I’m going to cover the relationship between MXEA and the S&P 500 (SPX). We have data going back to January 2000 so the[...]

  • Market News | VIX | Trader Talk | Education | Futures | Jul 11, 2015, 12:37 PM

    The Week in Volatility Indexes and ETPs - 7/6 - 7/10

    The Week in Volatility Indexes and ETPs - 7/6 - 7/10

    From the pre-Independence day July 2nd close to this past Friday VXST was down 0.73, VIX was up by 0.04, VXV was 0.05 higher and VXMT finished 0.28 higher. VXST is sort of an anomaly as there is a 3-day weekend impact that pushes the index lower. As the week over week change does no justice in showing the actual price action from last week I included the Thursday closing curve to show that last week was anything but boring. Note on the table below both VXX (and the similar funds) and SVXY (plus[...]

  • Market News | VIX | Trader Talk | Education | Jun 28, 2015, 10:59 AM

    The Week in Russell 2000 Trading - 6/22 - 6/26

    The Week in Russell 2000 Trading - 6/22 - 6/26

    Both indexes were lower last week, but the Russell 2000 (RUT) slightly outperformed the Russell 1000 (RUI) and continued to maintain a wide performance gap for 2015. The chart below indexes both the RUT and RUI to 100 as of the last day of 2014 to get an apples to apples visual of their respective performance. As of Friday RUT was up 6.23% while RUI has gained 2.58% this year. The CBOE Russell 2000 Volatility Index (RVX) was down 0.05 for the week finishing at 16.18 while the CBOE Volatility[...]

  • Market News | VIX | Trader Talk | Education | Trade Ideas | Jun 11, 2015, 2:00 PM

    The Big $VIX Trade - Part 3

    The Big $VIX Trade - Part 3

    The title of this blog refers to three parts and this is because we just had the third trade in the ongoing saga of a large 1 x 2 call spread in VIX options come into the VIX option pit yesterday.  There is actually another piece to the puzzle as when the first trade was initiated part of the transaction involved a large sale of call options and that position may still be open.  I do my best to keep blogs short, but I’m going to run through all three transactions individually and[...]

  • Education | Jun 11, 2015, 9:52 AM

    Options Trading Strategies: Low Fear Levels Make for Cheap Option Protection

    Options Trading Strategies:  Low Fear Levels Make for Cheap Option Protection

    Summer trading usually ushers in a time a low volatility and often very little interest.  Markets tend to make sharp and jagged moves as liquidity is thin.  At this time with markets at/near all time highs and nobody truly wants to get off the train, it makes for some difficulty but often some opportunities arise when others are looking the other way.  Paraphrasing Robert Frost, 'The road less traveled makes all the difference'. We often see some sort of 'summer rally' occur with alacrity,[...]

  • Education | Jun 9, 2015, 11:47 AM

    Will Stocks from Mainland China Be Added to the MSCI Emerging Markets Index?

    Will Stocks from Mainland China Be Added to the MSCI Emerging Markets Index?

    A key topic for global investors today is whether Chinese A-Shares will be included in the popular MSCI Emerging Markets Index. Estimates suggest that about $1.7 trillion in assets track the popular index. CBOE offers a number of volatility and options products to help investors gauge and manage their global equity exposure. Last month MSCI Inc. issued a press release with an announcement that it - “…  will release on June 9, 2015, shortly after 11:00 p.m. Central European Summer[...]

  • The Fed Has Already Ushered in a New Fed Policy

    The Fed Has Already Ushered in a New Fed Policy

    Fed policy dictates money flows into most markets, including stocks, bonds, commodities and even currencies.  As the leading central banker, the Committee sets policy as it sees fit for the US economy yet we often see other nations' central banks pivot off the Fed.  That often happens at a slower pace as countries are in an 'I'll wait and see how it works' mode.  When the Fed went to a ZIRP (zero interest rate policy) in 2008/09 many other central banks aggressively followed and cut[...]

  • Technical Analysis & Charts | VIX | Trader Talk | Education | Jun 1, 2015, 1:55 PM

    Halfway To A Textbook Recession - Weekly Market Outlook

    Halfway To A Textbook Recession - Weekly Market Outlook

    After three straight weeks of bullish progress, the weight of those gains finally proved to be too much. The prod was a surprisingly weak revised reading on Q1's GDP growth. Rather than growing at a 0.2% clip as first thought, the second (of three) updates on the nation's overall economic activity rolled in at -0.7%. That was enough to send the S&P 500 (SPX) (SPY) down 0.63% on Friday, bringing the weekly loss to 0.87%. And yet, the market has yet to move past the point of no return and start[...]

  • Education | Strategy | May 27, 2015, 5:00 PM

    Debit Spreads and Credit Spreads - Similar.

    Debit Spreads and Credit Spreads - Similar.

    (Editors Note. We would like to welcome Dan Keegan as a contributor to the CBOE.  Dan is a well known and experienced trader.  Dan started as a runner at the CBOE in 1978, moving up to act as a Floor Broker for 5 years and then a Market Maker for 17 years.  He does mentoring for investors and sends out a weekly newsletter to subscribers.  His web-site is optionauthority.com. Welcome Dan!) Selling credit spreads is a very popular starting point for many retail options traders.[...]

  • VIX | Trader Talk | Education | Futures | May 24, 2015, 12:32 PM

    The Week in Volatility Indexes and ETPs - 5/18 - 5/22

    The Week in Volatility Indexes and ETPs - 5/18 - 5/22

    The S&P 500 moved up a little last week and the volatility curve moved lower. On the shorter dated end of the volatility term structure chart, there was the three day weekend effect which helped push VXST and VIX a tad bit lower than would be expected in front of a normal two day weekend. Just for the heck of it, I took a look at the curve 52 weeks ago and added it to the diagram below. I expected the 2015 pre-Memorial Day weekend curve to be higher than the 2014 version, but was surprised at[...]

  • Market News | VIX | Education | May 21, 2015, 11:30 AM

    CBOE, C2 & CFE Memorial Day Holiday Trading Schedule

    CBOE, C2 & CFE Memorial Day Holiday Trading Schedule

    We have another long weekend coming up.  Next Monday, May 25th, is Memorial Day in the U.S. Tomorrow, Friday May 22st, CBOE, C2 and CFE  will have regular trading hours for all products. On Sunday evening May 24th, CFE opens its extended trading session at 5:00pm CDT for VIX (VX) Futures and VXT, and will close at 10:30am Monday May 25th. Monday May 25th, CBOE and C2 are closed for business, so there will be no Stock, ETF or Index option trading on that date.  Regular trading will[...]

  • Market News | Education | May 20, 2015, 10:21 AM

    Shift In TYVIX Term Structure

    Shift In TYVIX Term Structure

    CBOE began publishing the term structure of TYVIX on April 24, 2015, providing the market with estimates of expected Treasury volatility through the first three expirations of CME OZN options (options on 10-Year Treasury note futures). The TYVIX term structure provides a unique view of the market’s expectations of future Treasury volatility.  CBOE ticker symbols for the three volatilities are TYVIX1, TYVIX2 and TYVIX3. The chart below shows expected volatilities to May 27, June 24, and[...]

  • Trader Talk | Education | May 18, 2015, 2:00 PM

    So Much To Worry About - Really?

    So Much To Worry About - Really?

    Are there no shortage if things market players need to worry about?  It's amazing how long that 'wall of worry' has been up.  Yet, the market doesn't seem to be showing it, in fact we are seeing high complacency exist, which may not be a good thing over the long haul.  But I have to believe the mountain of concern in trading markets is way overblown, and the market shows it'll continue to overcome cautious behavior.  Ideal for a market to rally further than anyone expects. We[...]