Trade Ideas Archives - Cboe Blogs

  • 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[...]

  • Education | Strategy | Trade Ideas | Jul 15, 2015, 4:01 PM

    Trade Analysis - Selling $SVXY Puts

    Trade Analysis - Selling $SVXY Puts

    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 the[...]

  • Technical Analysis & Charts | VIX | Trader Talk | Trade Ideas | Jul 12, 2015, 3:30 PM

    Psychological Damage Can Be Done to Investors

    Psychological Damage Can Be Done to Investors

    It is not easy to win over investor sentiment.  Anyone who lost money during the financial crisis can tell you how difficult it was to suddenly trust markets again, and there was the 'flash crash' afterwards that suddenly jolted any built up confidence.  For its part, the Fed has done everything they possibly could to bolster investor confidence, the lifeblood to the markets. On record they have succeeded, but many would question the tactics.  Yet six years in to the bull run many[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Jul 8, 2015, 9:55 PM

    Bullish, Bearish, and Neutral Trades from Today

    Bullish, Bearish, and Neutral Trades from Today

    One of the fun parts of working at the Options Institute is looking into how large traders react to different market environments. Since today was a pretty exciting day in the markets I decided to look at block trading activity from the end of the day today. The result is a bullish, bearish, and neutral trade executed respectively in the Russell 2000, S&P 500, and VIX option markets today. First, the bullish Russell 2000 trade. With RUT very close to 1228 there was a bullish diagonal spread executed[...]

  • VIX Option Trade Into Expiration

    VIX Option Trade Into Expiration

    CBOE and the CBOE Futures exchange plan on launching VIX Weeklys options and futures respectively over the next couple of months. Usually when new markets start trading we have to do a little wait and see with respect to strategies that large traders are implementing. However, with VIX Weeklys we have over 100 expirations since VIX options were launched and we can look to trading in VIX options and futures that have occurred near expiration. With this in mind I did some digging around on the Monday[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Jul 7, 2015, 12:15 PM

    Weekly MSCI Index Review - 7/7/2015

    Weekly MSCI Index Review - 7/7/2015

    Tuesday of each week is the time we have set aside to discuss international markets on the CBOE Options Hub. Recently CBOE launched index option trading on two of the most widely followed equity market indexes that depict performance for equity markets outside the United States. The MSCI EAFE Index (MXEA) measures the performance of equities in developed markets outside of North America and the MSCI Emerging Markets Index (MXEF) focuses on emerging markets such as China, South Korea, and India. The[...]

  • VXX Block Trade from Monday

    VXX Block Trade from Monday

    Monday of this week was one of the more exciting days we have had in 2015. That’s probably an understatement since VIX futures volume was the highest it has been this year. When the S&P 500 is down and volatility is up there are traders always looking to take the other side of the move. Either through selling volatility or through getting long the stock market. The iPath S&P 500 Short Term Futures ETN (VXX) market is one instrument that can move quickly to the upside when the S&P[...]

  • Market News | Trader Talk | Strategy | Trade Ideas | Jun 30, 2015, 3:15 PM

    Bullish EEM Trade from Monday

    Bullish EEM Trade from Monday

    As CBOE expands the number of markets available for trading to include foreign indexes we are going to do the same in this space every Tuesday through taking a look at derivatives based on the MSCI family of indexes.  With the weakness in global markets on Monday I decided to search around for a trade in EEM ETF options that may be trying to take the other side of low equity prices. The daily chart below shows that EEM was down about 2.4% which was a bit more than the drop in[...]

  • Market News | Trader Talk | Strategy | Trade Ideas | Jun 11, 2015, 4:17 PM

    Earnings Next Week - 6/15 - 6/19

    Earnings Next Week - 6/15 - 6/19

    We are starting to emerge from the softest part of the earnings calendar and actually have three times as many stocks with short dated options reporting next week versus this past week.  Of course there was only one this week (LULU). The numbers on the table represent three years of history with Max being the biggest gain, Min being the biggest drop, Abs Avg representing the average move (higher or lower), and Last Q being what the stock did in reaction to earnings three months ago.     [...]

  • Market News | VIX | Trader Talk | Education | Trade Ideas | Jun 11, 2015, 2:00 PM

    The Big $VIX Trade - Part 3

    The Big $VIX Trade - Part 3

    The title of this blog refers to three parts and this is because we just had the third trade in the ongoing saga of a large 1 x 2 call spread in VIX options come into the VIX option pit yesterday.  There is actually another piece to the puzzle as when the first trade was initiated part of the transaction involved a large sale of call options and that position may still be open.  I do my best to keep blogs short, but I’m going to run through all three transactions individually and[...]

  • Trader Talk | Trade Ideas | Jun 2, 2015, 7:59 AM

    Blogging Options: CBOE Morning Update 6.2.15

    Blogging Options: CBOE Morning Update 6.2.15

    Greek creditors and government officials exchanging "final" offers, with markets weighing leaked details from both sides.  Will this finally be resolved?  Overseas markets mostly lower, 10-year yield up to 2.24%.  Richard Croft, R. N. Croft Financial, spoke at Option Education Day Forum in Vancouver last Saturday, saying Covered Write on stocks through August his choice, and buying calls due to low volatility when FED tightens (Sept.?) as earnings improve in Q3 & Q4.[...]

  • Market News | VIX | Trader Talk | Strategy | Trade Ideas | May 30, 2015, 11:51 AM

    The Week in Volatility Indexes and ETPs - 5/26 - 5/29

    The Week in Volatility Indexes and ETPs - 5/26 - 5/29

    Short term volatility rose last week based on stock market action and some impact from the holiday weekend. VXST’s 42% rise is partially attributed to the three day weekend being behind us and we can probably give a little credit to the day off Monday for the 14% rise in VIX. The issue that has nothing to do with the four day work week is the shape of the curve below which shows VXST is basically in line with VIX as of Friday's close. This is an indication that[...]

  • Market News | Trader Talk | Trade Ideas | May 28, 2015, 2:04 PM

    Earnings Next Week - 6/1 - 6/5

    Earnings Next Week - 6/1 - 6/5

    We are probably hitting a lull in the earnings calendar next week with only seven stocks reporting. As always Max is the biggest gain in response to earnings, Min is the biggest drop, Abs Average is the average magnitude of the moves, and Last Q is what the stock did last quarter in response to earnings.  Finally, all numbers represent three years unless italicized which is this case is AMBA which has only 2 1/2 years of history to work with.

  • Trader Talk | Strategy | Trade Ideas | May 23, 2015, 8:28 AM

    Block Trade Analysis - $RUT 850 / 1160 Bull Put Spread

    Block Trade Analysis - $RUT 850 / 1160 Bull Put Spread

    Author's note - this is an updated blog from last week correcting the strike of the short put.   Thanks to Robert Shen for the catch. Volume continues to rise in the Russell 2000 (RUT) option arena and my choices among block trades to discuss are on the rise as well. A trade from this past Tuesday caught my eye for three reasons. First, it was not a short dated deep out of the money credit spread – most of the trades I’ve come across and discusses recently in[...]

  • Market News | Trade Ideas | May 14, 2015, 11:34 AM

    Earnings Week of 5/18 - 5/22

    Earnings Week of 5/18 - 5/22

    It's all about retail next week.  As always Max is the biggest gain in response to earnings, Min is the biggest drop, Abs Average is the average magnitude of the moves, and Last Q is what the stock did last quarter in response to earnings.