• 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 | VIX | Trader Talk | Futures | Trade Ideas | Aug 27, 2015, 9:51 AM

    Return of the Big VIX Trade

    Return of the Big VIX Trade

    Beginning back in the spring there was a very large 1 x 2 VIX Call spread that was rolled from month to month for several months.  With the excess volatility it appears the trade was exited earlier this week.  But that is apparently not the end of the story…. Yesterday there was a buyer of about 92,000 VIX Oct 15 Calls for 8.00 who sold about 184,000 VIX Oct 21 Calls at 4.80 which boils down to a credit of 1.60 per spread.  The payoff, if held to October expiration, appears below[...]

  • 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.

  • Trader Talk | Education | Trade Ideas | Aug 18, 2015, 4:33 AM

    Gilead Sciences Inc. (GILD) Risk, Did Option Market Price It Correctly?

    Gilead Sciences Inc. (GILD) Risk, Did Option Market Price It Correctly?

    Editor’s note:  Park Research LLC @ParkResearch is a relative newcomer to the CBOE Options Hub family.  “Gilead Sciences Inc. (GILD) has 12 products in the Phase II trials and 7 products in the Phase III trials. Everything about the company’s fundamentals can change in a single day when the FDA makes a definitive decision on a late stage drug trial.” (http://www.cmlviz.com/cmld3b/lite.php?app=rc&ticker=GILD) As option traders, we constantly look for[...]

  • VIX | Trader Talk | Trade Ideas | Aug 17, 2015, 7:29 PM

    The Bull Market Lives! Long Live the Bull Market...

    The Bull Market Lives!  Long Live the Bull Market...

    ...or at least through the end of this week.  After that I'll be ready for anything else, but please - whatever is keeping volatility low - stay stable for a few more days. My escapades this month started on August 3rd, when I thought I'd draw a line in the sand for UVXY.  See chart below. UVXY was in the $25 range that day and its fraternal twin VIX was in the low 12s. I calculated that UVXY was unlikely to sink as low as $24 during the next two weeks, and wrote puts at that strike for[...]

  • 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 | 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.

  • Education | Trade Ideas | Aug 3, 2015, 8:08 AM

    SPX Version of SPY Hedge from Barron's

    SPX Version of SPY Hedge from Barron's

    Over the weekend, there was a discussion of hedging portfolios with options in my favorite column, The Striking Price, which appears every weekend in Barron’s. Steve Sears relayed a reader request to Stephen Solaka who manages money for Belmont Capital out in sunny but dry California. The question was basically, “How do I go about hedging a $1 million portfolio if I am concerned about the equity market over the near term?” The response, formulated when the SPY ETF was trading around[...]

  • VIX | Education | Strategy | Trade Ideas | Aug 2, 2015, 5:17 PM

    July: Tricky by Anyone's Standards

    July:  Tricky by Anyone's Standards

    Editors note – we would like to welcome Meredith Kelley Zidek as a new contributor to the CBOE Options Hub.  Meredith is a private investor whose interests include equities, options, and commodities.  She began trading equities in 2007, and since then has cultivated interests in corn, energy, and most recently, index and equity options. Almost all of her trading, which can be seen on grapestrades.blogspot.com, involves short options on volatility-related instruments.  She studies[...]

  • Market News | Trade Ideas | Jul 30, 2015, 7:05 PM

    Earnings Next Week - 8/3 - 8/7

    Earnings Next Week - 8/3 - 8/7

    We are coming toward the end of the second quarter reporting period, but still have several names to go.  As always the histories below represent three years with the exception of those in italics.

  • Trade Ideas | Jul 30, 2015, 1:36 PM

    $EA Sports: It's In The Game

    $EA Sports:  It's In The Game

    Editor’s note:  We would like to welcome Park Research LLC @ParkResearch to the CBOE Options Hub family with their look at EA earnings in front of their report after the close today. Electronic Arts will have their earnings released after Thursday’s closing. While we tend to think of an earnings release as a binary event – and more than not it is – we can also use the historical information to assess how investors and traders tend to react to the news. Let’s take[...]

  • Trader Talk | Trade Ideas | Jul 27, 2015, 7:35 PM

    Hitting a single in $SVXY

    Hitting a single in $SVXY

    Editors note – we would like to welcome Meredith Kelley Zidek as a new contributor to the CBOE Options Hub.  Meredith is a private investor whose interests include equities, options, and commodities.  She began trading equities in 2007, and since then has cultivated interests in corn, energy, and most recently, index and equity options. Almost all of her trading, which can be seen on grapestrades.blogspot.com, involves short options on volatility-related instruments.  She studies[...]

  • Market News | Trader Talk | Trade Ideas | Jul 23, 2015, 2:49 AM

    Earnings Next Week - 7/27 - 7/31 by Jackie Schuler

    Earnings Next Week - 7/27 - 7/31 by Jackie Schuler

    Editors note – Jackie Schuler is a rising Junior at Purdue University and is working as an intern this summer at The Options Institute.  She’s focused on helping Russell Rhoads with compiling this weekly earnings blog, searching out block trades to use as examples in classes, and developing programs focused on the next generation of option traders. It turns out next week has a busier earnings calendar than the current week.  Russell certainly picked a good time to leave[...]

  • Market News | Trader Talk | Futures | Trade Ideas | Jul 20, 2015, 8:33 AM

    Following Up on The Case for a 24-Hour VIX

    Following Up on The Case for a 24-Hour VIX

    For the second weekend in a row The Striking Price column in Barron’s had me at the headline. Last week, Bill Luby was the guest columnist, and it was about small cap volatility and the Russell 2000. Steve Sears (the guy that came up with the term 'fear index') was back at the helm this week and the words “The Case for a 24-Hour VIX” called out to me to read more. Anyone that has an interest in VIX should take a look at the full article, but here are some highlights. Sears[...]

  • Market News | Trader Talk | Futures | Trade Ideas | Jul 16, 2015, 11:37 AM

    Block Trade - $NFLX Butterfly into Earnings

    Block Trade - $NFLX Butterfly into Earnings

    I think just about every trader focused on stocks or equity options is aware that Netflix (NFLX) reported yesterday after the close.  Also we all know that the stock market seemed to like what they heard. I like to focus on earnings and search around for trades that were implemented just before an earnings release. Before jumping to the trade I came across, I want to discuss a couple of pieces of information that may be useful before trading around an earnings report. Every week I post[...]

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