Rhoads-Russell

Russell Rhoads, CFA

Russell Rhoads, CFA, is Director, Product Advancement, Global Derivatives at Cboe Global Markets. His career before joining Cboe included positions at a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, Balyasny Asset Management, and Millennium Management. He is a financial author and editor having contributed to multiple magazines and edited several books for Wiley publishing. He is the author of six market related books including Trading VIX Derivatives, Option Spread Trading, Trading Weekly Options, and Options Strategies for Advisors and Institutions. He authored material to be included in Level II of the CFA program and material for the CMT designation. In addition to his duties at Cboe, he is an adjunct instructor at Loyola University. He is a double graduate of the University of Memphis with a BBA ('92) and an MS ('94) in Finance and also received a Master's Certificate in Financial Engineering from the Illinois Tech in 2003. Russell is currently pursuing a PhD from Oklahoma State University with an expected graduation date in the Summer of 2018.

  • Mar 9, 2017, 4:30 PM

    CBOE RMC Presentation: Panel on Sourcing Liquidity

    CBOE RMC Presentation: Panel on Sourcing Liquidity

    Henry Schwartz, President of Trade Alert led a panel discussion on sourcing liquidity at today’s Risk Management Conference in Dana Point, CA.  The panelists were William Bartlett from Parallex Volatility Advisors, Jean Cayla from Optiver, Michael Khouw of Optimize Advisors and Tradelegs, and Stephen Solaka from Belmont Capital Group. The session started off with a presentation covering trends in the option industry with respect to volume and order types.  One interesting statistic[...]

  • Mar 9, 2017, 4:09 PM

    CBOE RMC Presentation: Institutional Liabilities and How Options Straties Can Help

    CBOE RMC Presentation:  Institutional Liabilities and How Options Straties Can Help

    The final session of the first day of CBOE RMC was a panel discussion titled “Real Money:  Institutional Liabilities and How Options Strategies Can Help” moderated by Jon Havice from DGV Solutions.  The panelists were Neil Rue from Pension Consulting Alliance LLC, Adam J. Smith, CFA, CAIA, from Mercy Health, and David Warn from The University of Chicago Office of Investments.  Jon Havice started things off with a discussion of institutional liabilities in the form of defined[...]

  • Mar 9, 2017, 2:02 PM

    CBOE RMC Presentation: Post Central Bank Volatility More Risk But More Alpha

    CBOE RMC Presentation:  Post Central Bank Volatility More Risk But More Alpha

    Benjamin Bowler, Global Head of Equity Derivatives Research at Bank of America Merrill Lynch delivered a talk titled “Post-Central Bank Volatility:  More Risk But More Alpha”.  The discussion noted how central bank actions have us in a different bubble type environment and noted that stocks continue to move up with very little volatility.  He also demonstrated that many markets have experienced high short term instability relative to recent price action and hedge fund performance[...]

  • Mar 9, 2017, 11:55 AM

    CBOE RMC Keynote Presentation by Ed Thorp

    CBOE RMC Keynote Presentation by Ed Thorp

    The keynote speech at today’s CBOE Risk Management Conference in Dana Point, CA was delivered by a legend in the business, Edward O. Thorp.  Thorp’s discussion focused on Position Sizing and Relation to Risk Management.  Despite being an octogenarian, Thorp recently released a book that is a great mix of a memoir and sharing what he’s learned through his decades of experience with the financial markets.  I strongly recommend picking up a copy of A Man for All Markets. [...]

  • Mar 8, 2017, 5:31 PM

    CBOE RMC Presentation: Decision Cycle for Downside Risk and Income Focused Strategies

    CBOE RMC Presentation:  Decision Cycle for Downside Risk and Income Focused Strategies

    Carlos Chujoy from the Employment Retirement System of Texas, Aashish Vyas from Swan Global Investments, and Joanne Hill from CBOE Vest Financial teamed up this afternoon for a session titled “The Decision Cycle for Downside Risk and Income-Focused Strategies”.  Aashish kicked things off with his part titled “Traders, Fishermen, and Big Data” which was a great analogy of fishing with being a trader.  After showing how fishing for a living and trading are similar[...]

  • Mar 8, 2017, 3:46 PM

    CBOE RMC Presentation: Funds and Use of Options Strategies

    CBOE RMC Presentation:  Funds and Use of Options Strategies

    The first session of the 33rd Annual CBOE Risk Management Conference featured Teri Geske from Wilshire Associates and Michael Oyster from Fund Evaluation Group.  Their presentation focused on white papers that discuss BuyWrite and PutWrite benchmark indexes that were created by CBOE. Michael Oyster went first noting that the long term trend for yields has been to the downside.  He then discussed the performance of benchmark indexes that utilize Russell 2000 (RUT) Index options.  The[...]

  • Mar 6, 2017, 12:26 PM

    Market Volatility and FOMC Rate Hikes

    Market Volatility and FOMC Rate Hikes

    It appears we are approaching another well telegraphed rate hike at the conclusion of the FOMC meeting scheduled next Tuesday and Wednesday.  I got a question via email that got me digging into market volatility around the last two hikes.  Both were widely expected, but did occur in December (2015 and 2016).   The two charts below shows price action for VIX and TYVIX leading up to and following the last two FOMC meetings where a rate hike resulted.  VIX was two different[...]

  • Mar 5, 2017, 10:24 AM

    Weekend Review of VIX Futures and Options - 2/27/2017 - 3/3/2017

    Weekend Review of VIX Futures and Options - 2/27/2017 - 3/3/2017

    The week over week change for VIX and the futures doesn’t tell the whole story last week. Despite falling on a week over week basis, VIX did show some life closing on Tuesday at 12.92 before retreating to close under 11.00 for the week.  I’m going to add something to this space for the next few weeks as there is a divergence in the volatility world.  Specifically, VSTOXX futures pricing from April and beyond is at a significant premium to corresponding VIX pricing.  The[...]

  • Mar 5, 2017, 9:36 AM

    Weekend Review of Russell 2000 Options and Volatility - 2/27/2017 -3/3/2017

    Weekend Review of Russell 2000 Options and Volatility - 2/27/2017 -3/3/2017

    Small cap stocks in the form of the Russell 2000 (RUT) lost 3 basis points last week which I am going to call a flat week.  Large caps represented by the Russell 1000 (RUI) was up .77% widening the lead for 2017 to 3.71%.  With the under performance of RUT last week came an increase in the CBOE Russell 2000 Volatility Index (RVX) premium to VIX which topped 50% to end the week. Although small caps have been lagging, at least one trader has expectations for RUT to push higher. [...]

  • Market News | VIX | Trader Talk | Strategy | Trade Ideas | Mar 5, 2017, 8:08 AM

    Weekend Review of Volatility Indexes and ETPs - 2/27/2017 - 3/3/2017

    Weekend Review of Volatility Indexes and ETPs - 2/27/2017 - 3/3/2017

    Textbook and parallel are two terms that come to mind to described the shift in the VXST – VIX – VXV – VXMT curve below.  Also, steep comes to mind as the longer dated indexes are pretty elevated when compared to VIX and VXST. The long funds below benefited from volatility increasing a bit on Tuesday last week, with VIX even putting in a 2017 high, before resuming their downward trajectory.  Note TYVIX giving up 10% which puts the volatility of 10-Year Treasury Note options[...]

  • Trader Talk | Trade Ideas | Mar 3, 2017, 9:47 AM

    Block Trade Analysis - Huge Bullish EEM Spread Trade

    Block Trade Analysis - Huge Bullish EEM Spread Trade

    Early Friday a huge spread trade was executed at CBOE using options on the iShares MSCI Emerging Market Index ETF (EEM).   Just a few minutes into the day a trader bought 66,000 EEM Mar 38 Calls at 0.62, sold 132,000 (twice as many) EEM Mar 39 Calls for 0.18 and then took in a little more premium by selling 66,000 EEM Mar 37 Puts for 0.19.  The net result was a cost of 0.07 for each short 1 37 Put, long 1 38 Call, short 2 39 Calls spreads.  The payoff at expiration on March 17th[...]

  • Earnings | Mar 1, 2017, 4:27 PM

    Earnings Week of 3/6 - 3/10

    Earnings Week of 3/6 - 3/10

    Things are starting to wind down, but there are a few stocks reporting next week with Weeklys available for trading.  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.

  • Market News | Trader Talk | Feb 25, 2017, 5:22 PM

    Update on The Warren Buffett Put Trades

    Update on The Warren Buffett Put Trades

    A few years ago, I was asked to co-author the study guide that accompanies the 3rd version of The Warren Buffett Way.  While doing research for this project I came across a discussion of a handful of index put options that Berkshire Hathaway had sold between 2004 and 2008.  Every year when the Berkshire Hathaway annual report comes out, I dig in to see how these trades are doing.  Here’s the update as of the end of 2016. Back in 2008, as the financial world was falling apart,[...]

  • Trader Talk | Trade Ideas | Feb 25, 2017, 2:54 PM

    Weekend Review of Russell 2000 Options and Volatility - 2/21 - 2/24

    Weekend Review of Russell 2000 Options and Volatility - 2/21 - 2/24

    Large cap dominance continues as the Russell 1000 (RUI) gained 0.77% last week and the Russell 2000 (RUT) was down 0.38%.  For the year RUI is now outpacing by over 3%. Small cap risk remains high relative to large cap risk as the CBOE Russell 2000 (RVX) premium to VIX remains are elevated levels.  First thing Friday, with RUT under a bit of pressure down about 10 points around 1383 one trader came in with a bull put spread that has a ton of room for error.  They sold the RUT Apr[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Feb 25, 2017, 2:14 PM

    Weekend Review of Volatility Indexes and ETPs - 2/21 - 2/24

    Weekend Review of Volatility Indexes and ETPs - 2/21 - 2/24

    VIX was the only S&P 500 related volatility index that lost value last week.  VXST rose, probably getting a boost from coming off a long weekend.  The longer dated volatility indexes mirrored the action in longer dated VIX futures by moving to the upside.  April seems to be the next month of concern among volatility players with the pending election in France.  Other pockets of volatility are showing up in the table below.  SKEW finished the week near recent highs and[...]