Options Strategy ‘Put’ In Perspective
Traders in the S&P 500 Index option pit at CBOE in June. Photo: Getty Images
Pension funds are increasingly beginning to use the CBOE S&P 500 PutWrite Index (PUT) as an efficient means to garner income while providing a “cushion” from volatility during market downturns. The PUT strategy is designed to sell a sequence of one-month, at-the-money, S&P 500 Index puts and invest cash at one- and three-month Treasury Bill rates.
“In Scramble for Yield, Pension Funds Will Try Almost Anything” – Ben Eisen and Aaron Kuriloff, The Wall Street Journal
For more information on the CBOE S&P 500 PutWrite Index, visit www.cboe.com/PUT.
WHITE PAPER: “An Analysis of Index Option Writing With Monthly and Weekly Rollover”
White Paper Link: http://bit.ly/2cfLjIN
VIX FIX: Volatility Making Moves
Fed Day came and went. Fed Chair Janet Yellen hinted that a raise in interest rates “has strengthened” in recent months, with a potential hike coming as soon as September. However, it was further comments later in the day from some of her colleagues about additional future rate hikes that created a strong reaction from the market. The VIX Index, which had dipped to around 12 in the morning, spiked to near 15 in the afternoon. The next FOMC meeting is September 20-21. Stay tuned.
“Capstone Bases Bets on Volatility” – Michael Shari, Barron’s
“How Yield Chasers Could Be Pushing Down Volatility” – Jon Sindreu, Wall Street Journal
“Volatility Index has one of its Biggest One-Day Gains Since Brexit” – Fred Imbert, CNBC
“Buy Volatility Ahead of a Jam-Packed ‘Policy Month,’ Says BAML” – Luke Kawa and Blaise Robinson, Bloomberg News
“Focus on VIX Futures Shorts Hides the Real Story” – Saqib Iqbal Ahmed, Reuters
“Stocks: Another Sign the Market is Way Too Quiet” – Ben Levisohn, Barron’s
“It Really is Very Quiet” – David Keohane, Financial Times
“Market’s Tight Range Signal Sharp Move” – Michael Kahn, Barron’s
“Dow Jones Industrial Average Falls; VIX Stages Biggest Jump Since Brexit” – Josh Selway, Schaeffer’s Investment Research
“The Market is About to Get a Serious ‘Shock’” – Bob Bryan, Business Insider
“How to Hedge Against a Potential VIX Pop” – Todd Salamone, Schaeffer’s Investment Research
“VIX Shorts Near Extremes: Time to Protect Your Investments?” – Michael Lebowitz, See It Market.com
“Market Anticipating More Volatility”
Air Date: 8/26/16