• 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[...]

  • Market News | VIX | Trader Talk | Strategy | Nov 21, 2015, 11:37 AM

    The Week in Volatility Indexes and ETPs - 11/16 - 11/20

    The Week in Volatility Indexes and ETPs - 11/16 - 11/20

    The shift for the VXST – VIX – VXV – VXMT curve was dramatic, but sort of what we have become use to in this buy on the dip culture.  VIX finished the week under 16.00, which voids a prediction that I had for the rest of the year.  I felt concerns about a December rate hike and the impact on stocks into 2016 would keep VIX elevated for the final few weeks of the year. VXX and the other long funds came under pressure based on the drop in VIX and VIX futures[...]

  • Market News | VIX | Blogging Options | Nov 20, 2015, 2:35 PM

    The Weekly Options News Roundup – 11/20/2015

    The Weekly Options News Roundup – 11/20/2015

    The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX and volatility-related articles from print, broadcast, online and social media outlets. RMC Heads East CBOE will hold the first-ever CBOE Risk Management Conference (RMC) Asia in Hong Kong, November 30th and December 1st.  The conference will feature presentations by experts in the industry discussing the latest products and strategies for managing risk, enhancing yield and lowering portfolio volatility.[...]

  • 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 | 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 | Nov 15, 2015, 9:09 AM

    The Week in Volatility Indexes and ETPs - 11/9 - 11/13

    The Week in Volatility Indexes and ETPs - 11/9 - 11/13

    The S&P 500 took a dive last week in what turned out to be the second worst weekly performance of 2015.  As of Friday the S&P 500 is down 1.7% for the year which would be the first noticeable loss (2011 was down less than 0.01%) since 2008.  The four volatility indexes that use S&P 500 as the underlying all shot higher.  What stands out to me is the high levels for VXV (3-month) and VXMT (6-month) on the chart below.  We are in the midst of high SPX implied volatility[...]

  • 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 | VIX | Trader Talk | Education | Strategy | Nov 8, 2015, 8:13 AM

    The Week in Russell 2000 Trading - 11/2 - 11/6

    The Week in Russell 2000 Trading - 11/2 - 11/6

    The first thing that popped in my mind when I created the first chart in this blog was the story “The Little Engine that Could”.  This was a pre-Thomas the Tank Engine story of a little locomotive that achieves a great feat while telling himself “I think I can” repeatedly.  My mental analogy relates to the Russell 2000 (RUT) line below which pushed higher by over 3% last week closing the 2015 YTD gap with the Russell 1000 and also moved very close to positive territory[...]

  • VIX | Trader Talk | Education | Futures | Nov 7, 2015, 1:58 PM

    The Week in VIX - 11/2 - 11/6

    The Week in VIX - 11/2 - 11/6

    VIX finished the week closer to 14 than 15 based on a muted response to the employment number and a lack of known potential volatility events on the horizon.  The fear index did manage to spend a little time on Monday and Tuesday under 14.00 which is a level that many consider the new ‘floor’ for VIX since we are about to enter a period of increasing interest rates.    The futures all followed the index lower which would be expected with smooth sailing for the stock[...]

  • Market News | VIX | Trader Talk | Futures | Nov 7, 2015, 11:22 AM

    The Week in Volatility Indexes and ETPs - 11/2 - 11/6

    The Week in Volatility Indexes and ETPs - 11/2 - 11/6

    The S&P 500 quietly rose just under 1% last week and VIX worked lower.  Across the board S&P 500 focused volatility indexes dropped with the possibility that any threat of increased volatility in the markets has been pushed out to 2016.  Of course back in August those same indexes dropped as the economic calendar was light and Labor Day was around the corner.  Note what happened on August 21st and August 24th when complacency started setting in. On the table below[...]

  • Market News | VIX | Blogging Options | Nov 6, 2015, 2:32 PM

    The Weekly Options News Roundup – 11/6/2015

    The Weekly Options News Roundup – 11/6/2015

    The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX and volatility-related articles from print, broadcast, online and social media outlets. VIX Weeklys: A Better Option for All The newly launched VIX Weeklys options contracts are off to a strong start, trading an average of 25,000 contracts in October.  Matt Moran, CBOE Vice President of Institutional Marketing, explains why VIX Weeklys contracts are a good option for all VIX players. “VIX Weeklys[...]

  • VIX | Trader Talk | Strategy | Nov 4, 2015, 7:18 PM

    Reality Check - VIX, SPX, and Non-Farm Payrolls

    Reality Check - VIX, SPX, and Non-Farm Payrolls

    The first Friday of the month means different things to different people.  For instance, at the Rhoads household that’s taco night!  However, in the world that is the financial markets the first Friday of the month is (typically) the day that the market digests the Non-Farm Payrolls number.  This is often the first number to give us insight into the economy from the previous month.  For example this coming Friday’s Non-Farm Payroll report discusses changes in employment[...]

  • 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,[...]

  • 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[...]

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