Trade Ideas Archives - Cboe Blogs

  • Market News | VIX | Trader Talk | Trade Ideas | Nov 28, 2015, 11:59 PM

    Weekly Review - Volatility Indexes and ETPs - 11/23 - 11/27

    Weekly Review - Volatility Indexes and ETPs - 11/23 - 11/27

    Very quiet holiday week.  There really isn’t much else to say, but it is interesting that VIX remains over 15.00.  I’m also attributing the rise in VXST to getting a holiday shortened week behind us.  Man I’m glad it’s not my job to fill up a business network with programming which must have been a heck of a challenge last week, especially on Friday. The funds were quiet as well, but you have to snicker when a 2.7% change (see VXX below) is considered[...]

  • Market News | Trader Talk | Trade Ideas | Nov 28, 2015, 6:40 PM

    New Barron's Article and RMC Presentation on Funds' Use of Options

    New Barron's Article and RMC Presentation on Funds' Use of Options

    Use of options by funds has grown tremendously since the 2002 introduction of the first major benchmark for options-based performance - the CBOE S&P 500 BuyWrite Index (BXM). Below are some recent developments and updates re fund use of options that will be covered at the First Annual CBOE Risk Management Asia Conference, which launches on Nov. 30 in Hong Kong. 1. BARRON'S. On page M9 of the Nov. 30 issue of Barron's, Amey Stone devotes the entire column to a review of covered call funds, and[...]

  • Market News | VIX | Trader Talk | Strategy | Trade Ideas | Nov 22, 2015, 2:13 PM

    The Week in Russell 2000 Trading - 11/16 - 11/20

    The Week in Russell 2000 Trading - 11/16 - 11/20

    Large caps ruled the week with the Russell 1000 (RUI) gaining over 3%.  Small cap stocks were no slouches, but the Russell 2000 did lag the Russell 1000 gaining 2.5%.  For the year RUI is up 1.21% and RUT is down 2.45%.  However, at the end of this blog I’ll note some statistics that show RUT still has a shot at victory in 2015. Both the CBOE Russell 2000 Volatility Index (RVX) and VIX were lower last week based on the rally in the equity markets.  RVX dropped[...]

  • VIX | Trader Talk | Education | Futures | Trade Ideas | Nov 21, 2015, 1:37 PM

    The Week in VIX - 11/16 - 11/20

    The Week in VIX - 11/16 - 11/20

    The VIX term structure returned to normal from slight backwardation last week as the S&P 500 rose over 3%.  Two years ago a 3% move in the S&P 500 probably would have resulted in VIX under 12.00, but these are different times and with a rate hike looming down to the mid 15’s is the best we can expect. The short dated term structure ended the week in slight contango which has been the norm when VIX drops since the futures were launched back in July.  The curve[...]

  • The "Data Dependent" Fed Continues to Consider the Data

    The "Data Dependent" Fed Continues to Consider the Data

    This afternoon the minutes from the most recent Federal Reserve Open Market Committee (FOMC) meeting were released. Yesterday the market digested the October CPI (inflation) data. Next week, GDP (Tuesday) and Durable Goods (Wednesday) will be relatively important. Without question, the upcoming Unemployment Report (Non-Farm Payrolls) on 12/4 will be the most influential piece of economic data before the December Fed Meeting where most market participants anticipate the Fed will raise interest rates[...]

  • Market News | VIX | Trader Talk | Strategy | Trade Ideas | Nov 17, 2015, 3:15 PM

    Block Trade Analysis - VIX Weeklys Option Trades

    Block Trade Analysis - VIX Weeklys Option Trades

    Tomorrow is November VIX settlement, but that hasn’t stopped some short term VIX traders from putting on new positions, in fact it may have encouraged them to do some trading. I ventured down to the trader floor late today to see what may be going on in the VIX Weeklys options set to settle on the open next Tuesday.  For those that know VIX well, you know that VIX futures and options normally settle on a Wednesday, 30 days before an expiration Friday.  However, December 25th is a[...]

  • Market News | Trader Talk | Trade Ideas | Nov 15, 2015, 5:50 PM

    The Week in Russell 2000 Trading - 11/9 - 11/13

    The Week in Russell 2000 Trading - 11/9 - 11/13

    The tough week for stocks was harder on small caps than large caps as the Russell 2000 (RUT) was down 4.43% and the Russell 1000 (RUI) dropped 3.63%.  RUT has a lot of work to do to catch up with RUI as the gap is at almost 3% between RUI (down 1.92%) and RUT (down 4.83% for the year). We tend to see VIX rise relative to the CBOE Russell 2000 Index (RVX) in times of turmoil.  That happened in August to the point of historically extreme relative RVX – VIX levels. [...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Nov 15, 2015, 10:40 AM

    The Week in VIX - 11/9 - 11/13

    The Week in VIX - 11/9 - 11/13

    VIX managed a finish over 20 as Friday’s market action raised the level of concern among market participants.  You have to wonder if Friday August 21st and the follow through on the 24th is still fresh in trader’s minds. The short term curve flattened out which seems to be the norm when VIX move higher, since VIX Weeklys are relatively new. Mid-day on Friday while VIX was still under 20.00 (19.60 to be exact), there was a buyer of the VIX Dec 25 Calls who paid 1.10 and[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Nov 12, 2015, 7:30 AM

    Earnings Next Week - 11/16 - 11/20

    Earnings Next Week - 11/16 - 11/20

    Regular earnings season seems to have come to a close and now the numbers are mostly about retail.  The numbers below represent the last three years of stock price reaction except when the data is in italics (JD for example).

  • Market News | Trader Talk | Education | Futures | Trade Ideas | Nov 11, 2015, 8:01 AM

    Five Things I'm Looking Forward to at RMC Asia

    Five Things I'm Looking Forward to at RMC Asia

    The air was cold this morning as I headed to the train which means two things.  Thanksgiving is just around the corner and right after that CBOE will be in Hong Kong for our first annual CBOE Risk Management Conference in Asia.  The schedule is out and I’m excited about the whole docket, but five things in particular have me counting the days to November 30th. Ed Tilly, CEO of CBOE Holdings, will be speaking at the beginning of the second day to welcome attendees and give an update[...]

  • Market News | Trader Talk | Strategy | Trade Ideas | Nov 9, 2015, 4:00 PM

    Eye Catching RUT Put Spread from Today

    Eye Catching RUT Put Spread from Today

    Surveying the market as the sellers took the Russell 2000 Index lower today, a large trade stood out. There was a Vertical Put spread in RUT traded approximately 12,000 contracts with the trader buying the Nov. 13th 1020 Puts for 0.12 and selling the RUT Nov. 13th 1000 Puts at 0.04 for a net .08 debit.  This was done in a few lots with the underlying Russell 2000 Index trading between 1180 – 1182.55. Noting that the trader was buying the higher strike put and recognizing this position[...]

  • Trader Talk | Trade Ideas | Nov 9, 2015, 8:02 AM

    Earnings Week of 11/9 - 11/13

    Earnings Week of 11/9 - 11/13

    Earnings season is coming to a close, but there are still a few interesting names reporting this week.  The numbers below represent stock price reaction over the last 3 years, unless in italics (W this week).  Max is the biggest up move, Min is the biggest stock drop, Abs Avg is the average move (higher or lower for you straddle traders) off earnings, and Last Q is what happened three months ago.  

  • Put the Short Premium in the Bag

    Put the Short Premium in the Bag

    The tale of October happens to be the tale of my friend, "Mr. G," and what he did to turn $39,727.47 on September 30th into $56,239.25 on October 31st.  How's that for some trick-or-treat plunder? Here is the breakdown, separated by types of trades, of which there were only a few.  I'll number the types and show the dates and entry and exit points. 1. The greatest number of trades were made by selling short shares of TVIX on different dates between September 22nd and October 23rd,[...]

  • Trader Talk | Trade Ideas | Nov 1, 2015, 5:11 PM

    Earnings Next Week - 11/2 - 11/6

    Earnings Next Week - 11/2 - 11/6

    We have a heavy week again for earnings.  So far my crack staff (me) has only been able to compile numbers for Monday and Tuesday next week.  I'll follow up with the balance of the calendar on Monday to give option traders that like to trade around earnings a little lead time.  As always the numbers below represent the biggest gain, loss, average move (without taking direction into account), and what the stock price reaction was for the previous quarter.  All numbers represent[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Nov 1, 2015, 3:30 PM

    The Week in Russell 2000 Trading - 10/26 - 10/30

    The Week in Russell 2000 Trading - 10/26 - 10/30

    I’m still playing some catch up from school work and travel which caused me to take my eye off the ball with respect to the markets.  It happens and when it does I’m always surprised by something that occurred while my mind and body were elsewhere.   The big surprise for me this time around was the disconnection between small and large cap stocks that happened over the past couple of weeks. Over the last two weeks of October the Russell 2000 (RUT) was basically unchanged[...]