• Market News | Trader Talk | Trade Ideas | Aug 20, 2015, 10:54 AM

    Earnings Next Week - 8/24 - 8/28

    Earnings Next Week - 8/24 - 8/28

    Things are starting to slow down with respect to the earnings calendar, but there are still plenty of trading opportunities next week.  As always the numbers below summarize reactions to earnings over the last 12 quarters with the exception of WDAY which only has 11 quarters of history to work with.

  • Market News | Aug 18, 2015, 4:52 PM

    Implied Volatility for the FXI China ETF August Options Jumped 20% the Past Two Days

    Implied Volatility for the FXI China ETF August Options Jumped 20% the Past Two Days

    August 18 – A report today at http://money.cnn.com noted that – “The bears have returned in China. The Shanghai Composite shed 6.2% on Tuesday, once again bringing the key index below the 3,800 point mark. …Tuesday's slump was the sharpest decline since July 27.” RISE IN IMPLIED VOLATILITY FOR THE AUGUST FXI OPTIONS A key issue for options investors is - how does the volatility in the Chinese stock markets impact the prices and implied volatility of exchange-listed options[...]

  • Market News | Aug 18, 2015, 11:46 AM

    2011 Debt Downgrade:  The Economic Collapse that Wasn't

    2011 Debt Downgrade:  The Economic Collapse that Wasn't

    Remember that shocking moment four years ago when ratings agencies had the gall to downgrade the US debt rating from AAA to AA? It felt like the “shot heard round the world” as other countries sat up and took notice. The reason for the downgrade was more political than anything else, of course. The debt ceiling crisis was blamed, and so was the lack of a plan by Congress and the President to deal with the burgeoning debt. The ratings agencies weren’t buying another[...]

  • Market News | Aug 17, 2015, 10:51 AM

    Healthy Correction? - Weekly Market Outlook

    Healthy Correction? - Weekly Market Outlook

    Stocks may have made a gain last week, but it was a hard-fought victory, and may have exposed just how vulnerable the market is right now. And, this week's trading will start out where last week's left off... within easy reach of some critical support levels, and in the shadow of still-waning momentum. We'll discuss it all - and show you - below, right after a quick rundown of last week's and this week's major economic announcements. Economic Data Last week was a rather busy one in terms of economic[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Aug 16, 2015, 5:45 AM

    Last Week in Russell 2000 Trading - 8/10 - 8/14

    Last Week in Russell 2000 Trading - 8/10 - 8/14

    Large cap stocks eked out a win last week with the Russell 1000 (RUI) rising 0.69% versus a 0.48% gain for the Russell 2000 (RUT). The chart below indexes the performance for RUI and RUT to 100 at the beginning of 2015 for an apples to apples comparison. Despite RUT and RUI basically performing in line with each other, large cap risk, as indicated by index option pricing, dropped a bit relative to small cap risk. The chart below displays the percent premium of the CBOE Russell 2000 Volatility[...]

  • Market News | Aug 15, 2015, 10:42 AM

    The Week in VIX - 8/10 - 8/14

    The Week in VIX - 8/10 - 8/14

    The S&P 500 rose slightly last week and the VIX curve was dramatically unchanged. Unchanged is an exaggeration, but in the four years that I have been posting blogs about VIX, this is the smallest week over week change I can remember. Something I have been watching for some time is the futures pricing relative to spot VIX the Friday before settlement. The spread, when very little is going on, is usually about a point of premium in the soon to expire VIX future relative to the index.[...]

  • Market News | VIX | Trader Talk | Futures | Aug 15, 2015, 8:37 AM

    The Week in Volatility Indexes and ETPs - 8/10 - 8/14

    The Week in Volatility Indexes and ETPs - 8/10 - 8/14

    Three out of four volatility indexes calculated using S&P 500 Index options to determine a consistent measure of implied volatility were lower last week. For all of 2015 the father dated volatility indexes have been elevated relative to VXST and VIX. We are now approaching a time where the potential for a rate hike is closing in. That may be the reason VXV held up last week while the other three indexes dropped. The stock market had a rocky ride, but finished the week higher. Everyone’s[...]

  • Market News | VIX | Blogging Options | Trader Talk | Aug 14, 2015, 4:00 PM

    The Weekly Options News Roundup – 8/14/2015

    The Weekly Options News Roundup – 8/14/2015

    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. VIX Weeklys All The Buzz After the launch of VIX weekly futures contracts in July, investors won’t have long to wait until VIX Weeklys options are launched on October 8.  These contracts offer market participants a more precise hedging tool around event-driven trading. “CBOE to Launch Weekly VIX Options[...]

  • Market News | Trader Talk | Aug 14, 2015, 2:28 PM

    A Rocky Week for the Russell 2000!

    A Rocky Week for the Russell 2000!

    The Russell 2000 similar to the broader market, whipped around this week. The Index closed last night (Thursday)  around the low of the day - 1,204.74. Early today (Friday) RUT is barely budging at 1,205, but the options are really on the move. The CBOE RVX, which measures implied volatility going 30 days out, also has an anxious feel this week. The RVX Index topped 21 earlier this week, closed last night at 18.54 and today is 18.62 as uncertainty builds about what's next for RUT and[...]

  • Market News | Trader Talk | Trade Ideas | Aug 13, 2015, 8:32 AM

    Earnings Next Week - 8/17 - 8/21

    Earnings Next Week - 8/17 - 8/21

    Things are starting to slow down with respect to the earnings calendar, but there are still plenty of trading opportunities next week.  As always the numbers below summarize reactions to earnings over the last 12 quarters.

  • Market News | Strategy | Aug 11, 2015, 12:21 PM

    The Bond Market: The Tail that is Wagging the Dog

    The Bond Market:  The Tail that is Wagging the Dog

    A study done in 2011 showed the global bond market is nearly triple the size of global equities.  I am quite sure it is even bigger today, but according to McKinsey, in 2010 there were 212 trillion in capital stock and bonds made up 75% of that number.  Hence, the enormous size of the bond market gives heed to investors looking for safety and income, but are ultra-sensitive to changes in interest rates.  We see rates increase when inflation rises, but they decline or stay low when[...]

  • Market News | Aug 10, 2015, 10:56 AM

    On The Fence - Weekly Market Outlook

    On The Fence - Weekly Market Outlook

    Once again, stocks managed to end the trading week on the fence, pressured lower by bearish momentum, but perking up at a very important support line when push came to shove on Friday. How we begin the new week is uncertain, but in the current market environment even the first move out of the gate isn't necessarily an indication of the trend's true direction. We'll sort it all it below, right after a brief run-down of last week's and this week's major economic news, the biggest of which was obviously[...]

  • Market News | VIX | Trader Talk | Futures | Aug 9, 2015, 5:49 PM

    Barron's Striking Price Column Highlights VIX Weeklys

    Barron's Striking Price Column Highlights VIX Weeklys

    This past weekend Steven Sears committed the whole Striking Price column in Barron’s to VIX Weeklys. I would strongly suggest checking out the full column, as well as reading it every weekend as it is a great way to learn more about options. Some highlights include – Weekly VIX futures contracts were introduced July 23th and the options are expected to begin trading on October 8th The shorter dated VIX futures are expected (and already have been) to track spot VIX more closely[...]

  • Market News | Aug 9, 2015, 11:04 AM

    The Week in Russell 2000 Trading - 8/3 - 8/7

    The Week in Russell 2000 Trading - 8/3 - 8/7

    The Russell 2000 (RUT) was down 2.57% last week, over twice the drop that occurred in the large cap focused Russell 1000 (RUI). This puts large cap stock performance solidly in the lead relative to small caps in 2015. For the year RUT is now up (a strong word for this) 0.18% while RUI is up 1.25%. We saw a strong move in the relationship between small cap and large cap volatility last week. Probably the best way to measure this is to compare the CBOE Russell 2000 Volatility Index (RVX) with VIX[...]

  • Market News | VIX | Trader Talk | Aug 8, 2015, 2:06 PM

    The Week in Volatility Indexes and ETPs - 8/3 - 8/7

    The Week in Volatility Indexes and ETPs - 8/3 - 8/7

    The over 1% drop in the stock market did not get traders too worried as VIX remains well under 14 and the VXST – VIX – VXV – VXMT curve maintained a distinct ‘normal looking’ curve. In 30 days we will be in early September, which is a time of year that often puts traders more on edge.   VIX did rise over 10% last week in response to the S&P losing 1.25%. As of Friday VXX was about 1/3rd August VIX futures and 2/3rds September VIX. Since the August contract[...]