Market News Archives - Cboe Blogs

  • Market News | VIX | Trader Talk | Futures | Sep 5, 2015, 3:44 PM

    The Week in VIX - 8/31 - 9/4

    The Week in VIX - 8/31 - 9/4

    On the traditional VIX curve we saw a pretty dramatic shift of the upside across the board.  The exception was spot VIX, but we have to attribute the smaller move to the three day weekend effect that causes VIX to close a little lower than if we were approaching a 2 day weekend.  A couple of things catch my eye on the term structure chart below. First, the price difference between September and October has me scratching my head.  On Friday we kept hearing how the employment number[...]

  • Market News | VIX | Trader Talk | Education | Futures | Trade Ideas | Sep 5, 2015, 11:00 AM

    The Week in Volatility Indexes and ETPs - 8/31 - 9/4

    The Week in Volatility Indexes and ETPs - 8/31 - 9/4

    The S&P 500 lost 3.4% last week which I guess is becoming commonplace these days.  Do note on the curve below that VXST closed a tad lower on a week over week basis.  We attribute this to the long weekend we are currently experiencing and I’ll address that a little more in a minute. Both VXST and VIX experience a little bit of a headwind going into long weekends.  This can be attributed to the calculations of both being based on calendar days and not trading days. [...]

  • Market News | Education | Sep 4, 2015, 12:17 PM

    TYVIX Weekly Review: VIX Futures in Backwardation

    TYVIX Weekly Review: VIX Futures in Backwardation

    A New Volatility Regime of Generally Higher Values than a Year Ago With the Chinese stock market on holiday (the Shanghai and Hong Kong markets were closed Thursday and Friday in remembrance of the 70th anniversary of World War II), volatility has stabilized.  However, amid persisting uncertainty about the world economy, it is a new regime. Values are significantly higher than a year ago, especially for equities. Figure 1. Weekly Update on Volatility Levels VIX Futures in Backwardation Stock[...]

  • Market News | Sep 4, 2015, 12:08 PM

    The Weekly Options News Roundup

    The Weekly Options News Roundup

    The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX and volatility-related articles from print, broadcast and online and social media outlets. Long Live Volatility Traders are hopping on the VIX roller coaster, taking advantage of the recent volatility in the market. But is volatility here to stay? “VIX to Investors: Fade the Decline,” Steve Sears, Barron’s http://on.barrons.com/1JKfBae “Options Premium Sellers Make Hay While Volatility[...]

  • Market News | Sep 4, 2015, 11:36 AM

    China Growth and Market Structural Integrity Top List of Fear Poll Concern

    China Growth and Market Structural Integrity Top List of Fear Poll Concern

    After a hiatus of almost a year (the October 2014 pullback, to be exact), I have reprised the VIX and More Fear Poll in an attempt to get some insight into which issues have been responsible for bring fear back into the investing equation and in so triggering the highest VIX spike (53.29) outside of the 2008-09 financial crisis and the #5 and #6 one-day VIX spikes ever on consecutive days. In the chart below, I have summarized the top ten responses from almost 400 voters, covering 40 countries over[...]

  • Market News | Sep 4, 2015, 10:25 AM

    Weekly Stock Market Commentary - Intermediate-term Outlook Remains Bearish - 9.4.15

    Weekly Stock Market Commentary - Intermediate-term Outlook Remains Bearish - 9.4.15

    Some of the intermediate-term indicators seem ready to capitulate and issue buys, but the overall picture is far from "all clear" at this point. Despite recurring volatility, $SPX has traded in a new range in the last couple of weeks -- 1870 to 1990. There has been a lot of talk in the media about a "retest" of the lows, where amateur technicians are saying that the market "almost always" retests the lows of a sharp selloff. In fact, with so many people looking for a[...]

  • Market News | Trader Talk | Strategy | Sep 3, 2015, 3:57 PM

    Earnings Next Week - 9/8 - 9/11

    Earnings Next Week - 9/8 - 9/11

    Next week is a holiday shortened week and sort of between earnings seasons as well, but we do have two companies with Weeklys available reporting.  Probably the most exciting name is LULU.  Also note this history PANW is less than the standard 12 quarters as the company has only been around long enough to report 11 times.  

  • Market News | VIX | Trader Talk | Education | Sep 3, 2015, 3:17 PM

    Block Trade - RUT Bull Put Spread That's More Like Just Shorting a Put

    Block Trade - RUT Bull Put Spread That's More Like Just Shorting a Put

    Before getting to the trade, indulge me for a second while I show the value of selling puts in a broad based market index... The CBOE S&P 500 PutWrite Index (PUT) is an excellent depiction of the benefits of selling puts.  The chart below shows the performance of PUT versus the total return for the S&P 500 from January 1990 through the end of August 2015.  Both returns are displayed assuming $100 was invested at the beginning of 1990.  Note over time PUT outperforms[...]

  • Market News | VIX | Trader Talk | Futures | Sep 1, 2015, 4:04 PM

    May the Next Voice You Hear Be Your Own

    May the Next Voice You Hear Be Your Own

    Con·trar·i·an Noun A person who takes an opposing view. One who rejects the majority opinion as in economic matters. What an emotional business this is. The uneasy market sell-off continued today with option implied volatility climbing higher. Radio and TV experts have no problem pumping fear into the average investor’s head. Fright sells. RIP Wes Craven. New traders make the big mistake of watching and listening for every clue to help them place the perfect trade. Only to fill[...]

  • Market News | Aug 31, 2015, 12:06 PM

    Volatility, Economy & The Fed - Weekly Market Outlook

    Volatility, Economy & The Fed - Weekly Market Outlook

    What a wild week! Perhaps the wildest we've seen in years, with a 5.3% plunge over the course of the first two days of last week more than wiped away by the 6.4% rebound seen over the course of the last three. We're still in the hole by more than 5% since the pullback started two weeks ago, but given the swings we're clearly capable of making now, that gap could be closed in just a couple of days. On the other hand, volatility is a two-way street - we could just as easily be seeing new multi-month[...]

  • Market News | VIX | Trader Talk | Futures | Aug 30, 2015, 11:41 AM

    The History of VIX Contango and Backwardation

    The History of VIX Contango and Backwardation

    This morning (Sunday) I got a request from Eric Thompson at Thompson Capital Management to look into streaks of backwardation in VIX.  There are different ways to measure backwardation.  You will hear pundits say we are in backwardation whenever VIX closes higher than the front month future.  Most market participants like to look to the relationship between the first and second month future since that relationship has a direct impact on the volatility oriented exchange traded products[...]

  • Market News | VIX | Trader Talk | Futures | Aug 30, 2015, 9:40 AM

    The Week in Russell 2000 Trading - 8/24 - 8/28

    The Week in Russell 2000 Trading - 8/24 - 8/28

    Once a month I leave CBOE for a couple of days and turn into a student attending a residency at Oklahoma State.  I do my very best to leave the markets behind and focus on my studies.  I did a pretty good job of tuning out what was going on toward the end of the week.  This resulted in me being surprised that the Russell 1000 (RUI) gained almost 1% on a week over week basis with the Russell 2000 rising just over a half of a percent.  Both are lower on the year, with large[...]

  • Market News | VIX | Trader Talk | Futures | Strategy | Trade Ideas | Aug 29, 2015, 1:19 PM

    The Week in VIX - 8/24 - 8/28

    The Week in VIX - 8/24 - 8/28

    I’m depending on my aging mental capacity in lieu of spending the time to go through the last four years of VIX recap blogs for the following statement.  I have no recollection of a shift in the VIX term structure curve that replicates what shows up below.  VIX lost value on the week, while all the futures contracts moved higher.  Last Friday, spot VIX ran up quickly at the end of the day, but the futures remained at lower levels.  To get back to a more ‘normal’[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Aug 29, 2015, 7:55 AM

    The Week in Volatility Indexes and ETPs - 8/24 - 8/28

    The Week in Volatility Indexes and ETPs - 8/24 - 8/28

    Under no circumstances does the week over week change in the VXST – VIX – VXV – VXMT curve tell the story of last week.  There’s something worth noting, but last week is not done any justice at all if a line showing Monday closing prices is not included, therefore it is. What strikes me as noteworthy about the week over week change in something that is very subtle on the term structure chart that appears above.  Note that VXV and VXMT actually rose last[...]

  • Market News | Aug 28, 2015, 3:30 PM

    Weekly Stock Market Commentary: Intermediate-Term Indicators Remain Negative

    Weekly Stock Market Commentary: Intermediate-Term Indicators Remain Negative

    The relative calm of the stock market trading in a range for six months was shattered in recent days. As recently as August 18th, all was calm. But beginning with a sharp 17-point drop in $SPX on the 19th, the rout was on. The support area at 1980-2000 was blown away, but it may offer some resistance on the way back up. There should also be major resistance at the 2040 level. Meanwhile, Monday's lows at 1870 represents support. If that is violated, last October's lows at 1820 are the next support[...]