Trade Ideas Archives - Cboe Blogs

  • VIX | Trader Talk | Futures | Trade Ideas | Jan 14, 2017, 5:43 PM

    Weekend Review of VIX Futures and Options - 1/9 - 1/13

    Weekend Review of VIX Futures and Options - 1/9 - 1/13

    Last week VIX managed to finish the day below the 2016 closing low (11.27) twice.  If it were only Friday’s close I’d throw an asterisk in there for the three-day weekend effect, but there’s no holiday excuse for the Wednesday close of 11.26. This past week they (whoever ‘they’ are) couldn’t get enough of February VIX Calls.  On Friday, paper bought over 60,000 VIX Feb 21 Calls for 0.49.  On Thursday, there were three block trades of[...]

  • Weekend Review of Russell 2000 Options and Volatility - 1/9 - 1/13

    Weekend Review of Russell 2000 Options and Volatility - 1/9 - 1/13

    It was a quiet week for the markets with a lack of economic data, the earnings calendar being light (that changes next week) and our president elect speaking to the press but not making statements to impact the equity markets too much.  The result was a 0.35% gain for the Russell 2000 (RUT) and a drop of 0.04% for large cap stocks as represented by the Russell 1000 (RUI). The next chart is a regular feature in this space.  I decided since the premium of the CBOE Russell 2000[...]

  • VIX | Trader Talk | Trade Ideas | Jan 11, 2017, 2:38 PM

    Getting the 2017 Party Started

    Getting the 2017 Party Started

    The cliffhanger last time involved the $6.50 put for UVXY expiring this Friday, January 13th.  I had sold twenty contracts on January 4th for premium received of $0.18 each.  It turns out that I got nervous about this put when UVXY touched 6.57 later that day.  I knew I had time, but I also believed that the nature of UVXY was not on my side, and I began plotting to trade out of these options and eventually replace them with more advantageous ones. It turns out I didn't have to wait[...]

  • Market News | Trader Talk | Trade Ideas | Jan 6, 2017, 10:10 AM

    Earnings Next Week 1/9 - 1/13

    Earnings Next Week 1/9 - 1/13

    One more week until earnings season kicks in.  In the mean time we have three major financials releasing numbers on Friday 13th.  As always the data below is based on the last three years of earnings results unless the ticker is in italics.  The columns show the biggest rally, biggest drop, average move, and what the stock did last quarter in reaction to earnings.  Finally, double check the earnings dates as not all were confirmed.

  • VIX | Trader Talk | Trade Ideas | Jan 5, 2017, 1:28 PM

    Follow the Bouncing...Arrow

    Follow the Bouncing...Arrow

    Yesterday, January 4th, in order to start out the new year with some degree of nail-biting (figuratively) drama, I hatched a little plan involving some short shares of UVXY.  The first thing I did was to buy to close 400 shares, reducing the 1,800 I had opened the previous day to 1,400 in quantity.  My plan was to re-short those 400 shares later in the day or on some upcoming day, along with 200 more which I envisioned as a day trade. Then, thinking about the 1,400 short shares I still[...]

  • Market News | Trader Talk | Trade Ideas | Jan 3, 2017, 11:04 AM

    Earnings Week of 1/3 - 1/6

    Earnings Week of 1/3 - 1/6

    A very small but mighty list with MON and WBA reporting Thursday before the open.  As always the data below is based on the last three years of earnings results unless the ticker is in italics.  The columns show the biggest rally, biggest drop, average move, and what the stock did last quarter in reaction to earnings.  Finally, double check the earnings dates as not all were confirmed.

  • Trader Talk | Trade Ideas | Dec 29, 2016, 8:54 AM

    Looking Forward to 2017

    Looking Forward to 2017

    Christmas certainly came early this year, but where would I look for more presents in the season of giving? Consumers, not corporations run the economy. We collectively are responsible for 70% of our economy, so when we are more confident, when sentiment is positive, it is reflected in stock prices. In 2017 I see several catalysts for higher consumer confidence: 1) Lower taxes 2) Redo or Replace Obamacare, both of which will put more change in consumer's pockets. Where will they spend that? CONSUMER[...]

  • VIX | Trader Talk | Futures | Trade Ideas | Election & VIX | 2016 Recap | Dec 17, 2016, 2:53 PM

    Weekend Review VIX Options and Futures 12/12 - 12/16

    Weekend Review VIX Options and Futures 12/12 - 12/16

    VIX was up slightly last week despite the markets having a relatively muted response to the first rate hike from the FOMC in just under a year.  The December VIX futures which expire this coming Wednesday actually dropped a bit as they had been slightly elevated relative to spot VIX.  One would never think the markets digested a rate hike last week by looking at the volatility market price action below. Wednesday last week there was a trader who decided volatility is going[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Dec 17, 2016, 1:54 PM

    Weekend Review Russell 2000 Options and Volatility 12/12 - 12/16

    Weekend Review Russell 2000 Options and Volatility 12/12 - 12/16

    Small caps finally came under pressure last week with the Russell 2000 (RUT) down about 2% while the large cap focused Russell 1000 (RUI) finished basically flat on the week.  For the year RUT is still dominating up just over 20% while RUI is up a respectable 10.6% for 2016. The relative levels between the CBOE Russell 2000 Volatility Index (RVX) and VIX narrowed as RVX dropped last week and VIX rose.  Relative to most of 2016 the premium is still a bit high. Friday this past[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Dec 16, 2016, 4:04 PM

    Panel on The Growing Role of Predictive Analytics in Investing

    Panel on The Growing Role of Predictive Analytics in Investing

    I had the pleasure of moderating a one-hour panel discussion for more than 60 attendees at CBOE on December 16 featuring these three experts: •        Joe Gits, CFA, CEO and Co-Founder - Social Market Analytics (SMA) •        Professor Koleman Strumpf, Professor of Business Economics - University of Kansas School of Business •        Dr. Wachi Bandara, Chief Research Officer – Pluribus Labs The panel[...]

  • Exploring the Rare Action in the S&P 500 Put / Call Ratio

    Exploring the Rare Action in the S&P 500 Put / Call Ratio

    Yesterday, astute market observer and Options Institute Instructor Kevin Davitt pointed out that the SPX Put Call Ratio had closed under 1.00 three days this month (Dec 7th, Dec 8th, and Dec 13th).  I knew this was a rarity, but didn’t realized how rare it was for this ratio to close below 1.00.  In fact, it has only happened sixteen times since July 2010 (which is how far back the data goes back on CBOE’s website).  Five of those sixteen occurrences happened in 2016 –[...]

  • VIX | Trader Talk | Trade Ideas | Dec 11, 2016, 2:18 PM

    The Weekly Options News Roundup – 12/11/2016

    The Weekly Options News Roundup – 12/11/2016

    The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX Index and volatility-related articles from print, broadcast, online and social media outlets. VIX FIX: The Volatility If Game    Over the past weeks, there has been myriad of “if” scenarios cited that could potentially trigger long-term volatility to re-emerge.  To-date, macro events including the Brexit vote, a surprise Trump victory in the U.S. presidential election and a consensus[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Dec 11, 2016, 9:03 AM

    Weekend Review - Volatility Indexes and ETPs - 12/5 - 12/9

    Weekend Review - Volatility Indexes and ETPs - 12/5 - 12/9

    With the continuation of the election related equity market rally comes even lower SPX option implied volatility.  The curve shifted lower across the board, but do note the angle steepens a bit between VIX and VXV with VXV representing IV into 2017. The performance table lives up to expectations after a week where the S&P 500 rose 3%.  A couple of things that are worth note.  VVIX remains at relatively high levels despite VIX being under pressure.  SKEW finished the week[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Election & VIX | 2016 Recap | Dec 10, 2016, 1:56 PM

    Weekend Review - VIX Options and Futures - 12/5 - 12/9

    Weekend Review - VIX Options and Futures - 12/5 - 12/9

    VIX is experiencing some seasonal pressure despite the looming FOMC meeting (and expected rate hike) this Wednesday.  VIX finished the week with an 11 handle at 11.75.  Without the final known unknown market event of 2016 coming up next week one can only wonder where VIX would be.  The curve is steep, but that rise doesn’t really kick in until next year when the uncertainty of political change in Washington DC is probably hovering over the equity markets. Things[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Dec 10, 2016, 9:36 AM

    Weekend Review - Russell 2000 Options and Volatility - 12/5 - 12/9

    Weekend Review - Russell 2000 Options and Volatility - 12/5 - 12/9

    The out performance of small cap stocks in the form of the Russell 2000 (RUT) relative to large cap stocks which is best represented with the Russell 1000 (RUI) has been nothing short of astonishing.  Last week RUT was up over 6% while RUI gained just over 3%.  For the year, RUT is up over 22% and RUI is up almost 11%. Breaking down the performance difference a little more starts with a look at relative performance since election day.  RUT is up 16.1% and RUI is up 5.9%. [...]