Strategy Archives - Cboe Blogs

  • Education | Strategy | Feb 9, 2015, 2:34 PM

    New White Paper Explores a Leveraged Approach Applying the CBOE S&P 500 PutWrite Index

    New White Paper Explores a Leveraged Approach Applying the CBOE S&P 500 PutWrite Index

    As a follow up to a BXY white paper we produced a few months ago, Mark Sebastian, Hannah Chody, and I just completed “A Leveraged Portfolio Management Approach Applying The CBOE S&P 500 PutWrite Index”. Highlights include – An analysis of PUT returns versus the total return for the S&P 500 over the last 26 years Examinations of how leveraging PUT returns can result in superior absolute and risk adjusted returns A demonstration of how to implement a leveraged PUT strategy The[...]

  • Trader Talk | Education | Strategy | Trade Ideas | Jan 23, 2015, 2:38 PM

    AAPL Earnings Play

    AAPL Earnings Play

    I am looking at an Iron Condor as a potential trade to play AAPL earnings next week. Trade: Sell 1 January 120 Call and Buy 1 January 123 Call. Sell 1 January 104 Put and Buy 1 January 101 Put. This is the January 30 Expiration. The credit I am looking for is around $60 per every one contract Iron Condor I do (excludes commission). Analysis: The credit for this Iron Condor is $60 and the Risk or Margin is $240 per every one contract I do. The yield is about 25% excluding commissions if I collect[...]

  • Trader Talk | Education | Strategy | Trade Ideas | Jan 20, 2015, 1:45 PM

    NFLX Earnings Trade Idea

    NFLX Earnings Trade Idea

    Netflix, Inc. [Nasdaq: NFLX, $342, up $4.66] is scheduled to release its fourth quarter earnings report today following the close of the market session. Consensus analyst estimates are forecasting earnings per share of $0.45 on overall revenues of $1.48 billion. The same quarter one year prior (Q4 2013) saw EPS of $0.66 on $1.18 billion in revenue. NFLX shares are off by a modest 0.8% in 2015, but the stock has been trading in a bearish pattern since last September with sideways price action since[...]

  • Market News | Strategy | Trade Ideas | Jan 14, 2015, 9:15 PM

    Next Week in Weeklys - 1/20 - 1/23

    Next Week in Weeklys - 1/20 - 1/23

    Next week is a holiday shortened week as noted in the blog that appears just before this one.  Despite it being a short week, there's plenty of companies with short dated options reporting earnings next week.  Things get started on Tuesday morning with numbers from Baker Hughes (BHI) and Halliburton (HAL) which should be interesting since the oil market has been in the news lately.  The week finishes up with McDonalds (MCD) and General Electric (GE) reporting before the open Friday[...]

  • Strategy | Jan 6, 2015, 1:15 PM

    Back to the Future: Play Oil with USO ETF Options

    Back to the Future: Play Oil with USO ETF Options

    Crude oil’s precipitous drop from it’s June highs has yet to show signs of abetting, with U.S. Oil benchmark West Texas Intermediate (WTI) down over 3% again today following Monday’s downside move. Now trading below $50, oil has moved to a new five and half year low, a move estimated to save the average American over $1400 annually and bolster consumer discretionary spending. Continued strength in the USD and OPEC’s refusal to cut production would lead me to believe oil has[...]

  • Market News | Trader Talk | Strategy | Dec 23, 2014, 11:30 PM

    Trader Looking for a Better 2015 for Emerging Markets

    Trader Looking for a Better 2015 for Emerging Markets

    At least one trader is looking for 2015 to be a green year for emerging markets. In trader-speak a green year means higher levels. Earlier this week, when the iShares MSCI Emerging Markets ETF (EEM) was trading around 39.30 there was a buyer for a very long dated call spread. Looking to December of 2015 and EEM being at or above 41.50 a buyer came into the market purchasing 50,000 EEM Dec 2015 38.50 Calls at 3.85 and selling 50,000 EEM Dec 2015 41.50 Calls for 2.30 and a net cost of 1.55. As seen[...]

  • Market News | VIX | Trader Talk | Strategy | Dec 23, 2014, 8:33 PM

    Trade Looking for Lower VIX into 2015

    Trade Looking for Lower VIX into 2015

    December VIX settlement was last week and traders are starting to look to next year. Late Monday afternoon one of these traders took a position looking for VIX to return to the low teens in early 2015.   With VIX around 15.70 and the January VIX future at a 0.75 premium to the index at 16.45 a trader came in and bought a Jan VIX 14 / 15 Put Spread. The specific trade was a purchase of 4500 of the VIX Jan 15 Puts at 0.95 and sale of 4500 VIX Jan 14 Puts at 0.46 and a net cost of 0.49. The[...]

  • 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 | 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[...]