Education Archives - Cboe Blogs

  • VIX | Education | Dec 29, 2014, 7:03 PM

    Homeowner's Insurance, VIX, and the Hurricane Analogy

    Homeowner's Insurance, VIX, and the Hurricane Analogy

    When we introduce aspiring option traders to the various pricing factors that determine the value of an option contract we often use an insurance analogy to describe implied volatility. The short version of the story is that implied volatility is the pricing factor that is closely associated with the risk of price movement in the underlying market.  We expand on this idea using the idea of the cost of homeowner’s insurance as a hurricane is bearing down on south Florida. If a homeowner[...]

  • VIX | Trader Talk | Education | Futures | Dec 16, 2014, 10:00 AM

    VIX December Settlement Reminder: Wednesday 12.17

    VIX December Settlement Reminder: Wednesday 12.17

    Settlement Reminder: Today, Tuesday December 16th is the last trading day for December in the following: VX, VM, VXEM, OV, VN, VXEW, VXST and GV futures and options. These contracts settle tomorrow, Wednesday morning, December 17th. We will post the settlement values when they are released tomorrow morning.

  • Technical Analysis & Charts | VIX | Education | Futures | Dec 15, 2014, 5:00 PM

    Capitulation Or Acceleration? - Weekly Market Outlook

    Capitulation Or Acceleration? - Weekly Market Outlook

    Stocks toyed with the idea two weeks ago, but pulled the trigger last week.  What's that?  A significant stumble.  After the bullish momentum slowed the first full week back after Thanksgiving, it reversed - in spades.  The S&P 500's (SPY) (SPX) 3.5% pullback last week was actually the worst single calendar-week performance since August of 2011. Ironically, the sheer size of the selloff may also be the best thing going for the market this week, as it may inspire a short-term[...]

  • Weekly Market Commentary 12.12.14

    Weekly Market Commentary 12.12.14

    Various indicators have been turning bearish since mid-November.  But until this week, $SPX itself had not broken down, and since price is "king," that was quite important.  However, now $SPX has broken down, as it has fallen below support at 2050.  This completes a bearish pattern, and a full-fledged correction is underway. This could be sharp and short-lived, and since it is taking place late in the calendar year (when seasonal bullishness occurs), that is probably the[...]

  • Market News | VIX | Trader Talk | Education | Dec 11, 2014, 1:55 PM

    Weekly Weekly's Option Report 12.11.14

    Weekly Weekly's Option Report 12.11.14

    // Volatility is shaking up the market and traders are loving the fast-pace of trades in the Weekly's.  I'm Angela Miles. Today I am covering Weekly options expiring this Friday.  Next Friday is a traditional options expiration. I'm starting with trades in the SPX. It's a big volume day for SPX (S&P 500 Index) options contracts as the market responds to better-than-expect news on retail sales. One[...]

  • Trader Talk | Education | Dec 9, 2014, 10:00 AM

    Index & ETF LEAPS To Be Added for 2017

    Index & ETF LEAPS To Be Added for 2017

    On Wednesday, December 24, 2014, trading begins for December 2017 LEAPS® in the below Index and exchange-traded fund (ETF) option products: DJX (Dow Jones Industrial Average) MNX (Mini-NASDAQ 100 Index) NDX (NASDAQ 100 Index) OEF (iShares on the S&P 100 Index Fund) OEX (S&P 100 Index with American Exercise) RUT (Russell 2000 Index)** SPX (S&P 500 Index) SPY (SPDR S&P 500 ETF Trust)** XEO (S&P 100 Index with European Exercise) ** Note: RUT and SPY are the only products identified[...]

  • VIX | Education | Strategy | Trade Ideas | Dec 8, 2014, 4:00 PM

    Skipping Around: Of Jobs, Oil and Markets

    Skipping Around:  Of Jobs, Oil and Markets

    Today, we'll take a look at how jobs, oil and market volatility are playing a role in the market environment. A Solid Jobs Report:  But You Can't Please Everyone Last week's job number took many by surprise.  What a great report it was, 321K jobs created based on the latest survey, previous reports revised upward.  Yet, all I heard were complaints - the jobs created were temporary, not high-paying career type positions and that this will turn tail in a couple of months.  I disagree[...]

  • Market News | Technical Analysis & Charts | VIX | Education | Dec 8, 2014, 10:22 AM

    Can The Nasdaq Comp & Russell 2k Give The Next Boost? - Weekly Market Outlook

    Can The Nasdaq Comp & Russell 2k Give The Next Boost? - Weekly Market Outlook

    Though the market may have gotten off  to a bad start with Monday's 0.7% stumble, the bulls took charge again the very next day to hammer out a gain for the week.  Granted, it was less than a 0.4% gain when all was said and done, but a gain is a gain. On the other hand, it didn't take long after last week's turnaround from Monday's dip for the lethargy to set in again (some of which is likely due to the winter holiday season).  Once again, the S&P 500 (SPX) (SPY) is bumping around new-high[...]

  • Fill 'Er Up... No, Just Check the Oil

    Fill 'Er Up... No, Just Check the Oil

    Last week I did something I haven’t done for 5 years; I filled my gas tank for under $3 gallon. This got me to thinking about ways to lock in current prices without pumping and storing hundreds of gallons of explosive liquids in my garage. We know the cliché, “there’s an app for that!” the same can be said for ETFs, “there’s an ETF for that!”. Doing a quick search for Exchange Traded Fund and “unleaded fuel” I found the UGA the United States[...]

  • Market News | Trader Talk | Education | Futures | Strategy | Dec 2, 2014, 3:15 PM

    Performance Divergence Among Asian ETFs

    Performance Divergence Among Asian ETFs

    One of the nice things about ETFs is the broad diversity they offer in terms of exposure to a vast variety of stock sectors within the US -- but they also have exposure to a growing number of international countries (and in some cases, multiple choices within a single country or region), commodities, currencies, volatility, bonds, etc.  All of which can be traded in a single brokerage account (or brokerage retirement account).  In general, we tend to look for outperforming and underperforming[...]

  • Trader Talk | Education | Dec 2, 2014, 1:15 PM

    Risk Management in Trading Trumps All

    Risk Management in Trading Trumps All

    During the recent period of high volatility many of my client portfolios took a ride up and then down then back up again, which may be of some concern.  I received a phone call from of them (of which I rarely do) and she asked if I could just 'sell stuff before the market goes down and buy stuff right before it goes up'.  I certainly wish it were that easy!  Yet, my job is to make money for clients regardless of the direction, and with options my timing has to be nearly perfect. If[...]

  • Market News | Technical Analysis & Charts | VIX | Education | Dec 1, 2014, 7:15 PM

    Grinding Higher Economy & Stocks - Weekly Market Outlook

    Grinding Higher Economy & Stocks - Weekly Market Outlook

    As is usually the case, Thanksgiving week proved to be a rather tepid one for stocks, with most of the trading crowd choosing to check out around the middle of the week.  Volume for last week as about half the norm. Nevertheless, where we left off on Friday is where we'll restart things on Monday, so it's still worth figuring out where we are and where we're likely to go from here for the broad stock market. We'll do exactly that below and look at one interesting sector long-term setup,[...]

  • Market News | VIX | Trader Talk | Education | Futures | Dec 1, 2014, 3:35 PM

    Free Webcast and a Cyber Monday Deal

    Free Webcast and a Cyber Monday Deal

    Tomorrow Mark Sebastian and I will be hosting a webcast at 3:30 pm Chicago time to discuss our recent paper on leveraging buywrite strategies along with a discussion of preliminary results for a leveraging SPX put selling strategies. There’s still time to register – www.cboe.com/webcasts CBOE is on the “Cyber-Monday” bandwagon offering deeply discounted online access to many of our upcoming classes. Mark Sebastian and I will be giving on of these discounted classes a week[...]