Education Archives - Cboe Blogs

  • Market News | VIX | Education | Jan 8, 2016, 4:45 PM

    2016 Stock Market Forecast & 2015 Market Review

    2016 Stock Market Forecast & 2015 Market Review

    Usually we make this the topic of a longer article at year-end, but frankly we are not holding positions for anywhere near a year, so this is just a mental exercise – not having a lot to do with our style of trading. Besides, last year the big thing was that years ending in “5" are extremely bullish.  Well, this one wasn’t, which just shows that seasonals don’t always work.  Of course, with this one you have to wait another ten years to see how the next signal[...]

  • Market News | VIX | Education | Futures | Jan 8, 2016, 2:40 PM

    It’s Déjà VIX All Over Again

    It’s Déjà VIX All Over Again

    The same up-and-down vibes that marked the end of 2015 lifted volatility in the first week of 2016. The Shanghai stock market plunged on Monday. Oil prices were on a downward trend all through the week, and on Friday the U.S. Labor Department reported an additional 292,000 nonfarm payroll jobs were added in December. On Thursday, the economic malaise in China pushed the CBOE Volatility Index (VIX) to a weekly high of 25.86, 42 percent higher than at the close of 2015. The upbeat job report on Friday[...]

  • Market News | VIX | Education | Jan 6, 2016, 10:29 AM

    CBOE RMC Early Bird Pricing Ends Friday

    CBOE RMC Early Bird Pricing Ends Friday

    On what is supposed to be the coldest day of this winter in Chicago I’m booking a flight to South Florida for late next month.  Bonita Springs is the home for the 2016 CBOE Risk Management Conference where I know the weather will be more agreeable than what I experienced on my walk from the train this morning in Chicago. CBOE now hosts three versions of the Risk Management Conference annually, each with a geographic focus (US, Europe and Asia).   The one in the United States[...]

  • Market News | Technical Analysis & Charts | VIX | Education | Jan 4, 2016, 2:11 PM

    Eight Charts to Recap 2015 – CNDR Index Rose 10.4%

    Eight Charts to Recap 2015 – CNDR Index Rose 10.4%

    End-of-the-year headlines noted “A Roller Coaster Year Ends with U.S. Markets Mostly Down” (New York Times) and “U.S. Stocks Post Worst Annual Losses Since 2008” (The Wall Street Journal). In this new year on Jan. 4, wsj.com noted “Weaker-than-expected manufacturing data and a falling currency triggered a 7% fall in mainland Chinese stocks that led authorities to halt trading there before the end of the session.” After reading these types of news stories, an inquisitive[...]

  • Technical Analysis & Charts | Education | Strategy | Jan 4, 2016, 9:39 AM

    Weekly Market Outlook - New Year, New Chart Problems

    Weekly Market Outlook - New Year, New Chart Problems

    When push came to shove as the end of the shortened trading week (and last week of the year), the bears were doing most of the shoving. Namely, thanks to Friday's last-minute selling, the S&P 500 (SPX) (SPY) finished the week down 0.8%. That translates into a small loss of 0.7% for all of 2015. Will 2016 be any different? That remains to be seen, but we certainly didn't end 2015 on a high note. The good news is, there's little correlation between the market's tone at the end of one year[...]

  • Education | Strategy | Jan 4, 2016, 9:23 AM

    Doing a Post Mortem on the Past Year

    Doing a Post Mortem on the Past Year

    With the beginning of the year upon us, it is a time to reflect on what worked and get an understanding of how to fix what didn't work.  Let's face it, the market moves of 2015 were sharp, jagged and made our heads spin.  While we can look for explanations for why the markets made their moves, that may only just explain a little.  What really needs to happen is to see how we reacted, performed and find solutions to be better in the year ahead.  What do I do?  I do an analysis[...]

  • Market News | VIX | Trader Talk | Education | Futures | Jan 3, 2016, 9:24 AM

    Five Volatility Market Takeaways from 2015

    Five Volatility Market Takeaways from 2015

    2015 is behind us and the S&P 500 dropped (more than a rounding error) for the first time since 2008.  If you want to put a positive spin on the year you can say with dividends the S&P 500 was higher.  It was a fun year to be a market participant as we experienced some things that could be considered new or at least different relative to recent market history.  Since everyone loves lists, or gets easily sucked into them, here are five takeaways from the volatility markets in[...]

  • Market News | Education | Futures | Strategy | Dec 31, 2015, 10:02 AM

    A Look Backward and Forward: CBOE VIX Indexes in 2015 and 2016

    A Look Backward and Forward: CBOE VIX Indexes in 2015 and 2016

    2015 Retrospective: There was no shortage of financial crises or investor alarm over central bank monetary policies, OPEC’s oil policy, and the generally anemic state of the global economy in 2015. Each CBOE VIX Index recorded the level of stress in its underlying sector. As the graphs below illustrate, different triggers struck panic across markets. VIX Index, Volatility Gauge for U.S. Equity Market: The uptrend in expected volatility of the U.S. equity market continued in 2015. The peak[...]

  • Technical Analysis & Charts | Education | Strategy | Dec 22, 2015, 2:35 PM

    2015 Year in Review with Kevin Davitt of the CBOE Options Institute

    2015 Year in Review with Kevin Davitt of the CBOE Options Institute

    Mark your calendars – this is not to be missed! A look back at the year that was in the markets with a little bit of everything. Fundamentals, technical/volatility analysis, options strategy, geopolitics, ideas for 2016 and more. Please join us Tuesday 12/29 at 3:30 PM CST time for this informative and free Webcast. Kevin is a Senior Instructor at the Options Institute. He traded equity and index options on the CBOE and PHLX floor for 8 years. He also has extensive experience[...]

  • Education | Strategy | Dec 22, 2015, 10:52 AM

    Did the Fed Rate Hike Remove Uncertainty?

    Did the Fed Rate Hike Remove Uncertainty?

    If you believe that first move following the first Fed rate hike in nine years, then you believe the market was relieved exhaling.  In a perverse way, the market seemed to be applauding tightening of policy, which is counter to what we have seen for years.  Sure, the near zero interest rate policy (ZIRP) is still in effect, but the irrational behavior is quite remarkable.  While the overall monetary policy is accommodative, a removal of access via higher rates is hawkish behavior -[...]

  • Education | Dec 21, 2015, 12:54 PM

    Weekly Market Outlook - Reasons For Caution Here

    Weekly Market Outlook - Reasons For Caution Here

    Talk about a 180-degree turnaround! Traders were bullish leading up to last Wednesday's big news, and remained a little bullish for the last part of that session. With a night to sleep on it though, they changed their minds. Thursday as bearish and Friday was even more so, turning what started out as a great rebound effort into a weekly loss as well as a break below several key support levels. If a Santa Claus rally is in the cards, the bulls are going to have to start with a lot of damage control. We'll[...]

  • Market News | VIX | Trader Talk | Education | Strategy | Trade Ideas | Dec 20, 2015, 3:30 PM

    Weekly Review - Russell 2000 Options and Volatility - 12/14 - 12/18

    Weekly Review - Russell 2000 Options and Volatility - 12/14 - 12/18

    Small cap stocks continue to languish relative to large cap stocks for 2015.  The Russell 2000 (RUT) was down 0.23% while the Russell 1000 (RUI) lost 0.35% last week.  RUT is down 6.95% for 2015 while the large cap oriented RUI is down only 2.94%.  It’s going to take a small miracle for RUT to close the gap over the next two holiday shortened weeks. The CBOE Russell 2000 Volatility Index (RVX) rebounded relative to VIX last week but finished very close to parity. [...]

  • Market News | VIX | Trader Talk | Education | Futures | Trade Ideas | Dec 20, 2015, 10:44 AM

    Weekly Review - VIX Futures and Options - 12/14 - 12/18

    Weekly Review - VIX Futures and Options - 12/14 - 12/18

    VIX gave up 15% last week, despite the S&P 500 losing a little and this index trading in a range of greater than 80 points for the second consecutive week.  Consensus thinking is that with the Fed finally hiking rates a little uncertainty came out of the markets.  Of course Janet Yellen’s press conference was still in full swing when market pundits started discussing when the next potential rate hike may occur. The curve depicting the short dated VIX futures contracts[...]

  • VIX | Trader Talk | Education | Futures | Trade Ideas | Dec 19, 2015, 9:46 AM

    Weekly Review - Volatility Indexes and ETPs - 12/14 - 12/18

    Weekly Review - Volatility Indexes and ETPs - 12/14 - 12/18

    Finally, the Fed raised rates.  I’m reading Ben Bernanke’s book and it is interesting that this was being debated when he was still the chairman.  The equity market loved it and then hated it with the result being a roller coaster of a week.  The VXST – VIX – VXV – VXMT curve was on heightened alert this time last week and returned to normal to end the week.  It is rare, but we seem to have experienced an earnings like volatility crush in SPX volatility[...]

  • Education | Dec 14, 2015, 3:12 PM

    CBOE Options Institute at SGX Opens in Singapore

    CBOE Options Institute at SGX Opens in Singapore

    Last week I was in Singapore for the launch of the CBOE Options Institute at SGX.  Option trading is spreading around the globe and our partnership with SGX is a sign that more traders and investors outside the United States want to learn about using options as effective speculative and risk management tools. Our first class took place at the SGX Academy where classes on futures and stock trading have been held for years.   We had well over 150 students show up last Wednesday for a[...]