TRADING BLOCK

Another mixed day of the street.

EA bouncing back after Fortnite crash and Apex rally.

Earning Highlights this Week:

Monday - Aurora Cannabis (ACB)

Tuesday - Activision Blizzard

Wednesday - Cisco

Thursday - Nvidia, The Coca-Cola Company, CME Group, Cannabis Growth (CGC), Applied Materials

Friday - PepsiCo

ODD BLOCK

Near-term ITM call love in Electronic Arts Inc (EA)

Call love in CBS Corporation Common Stock (CBS)

More paper trading in Centurylink Inc (CTL)

MAIL BLOCK
#QOTW - $VXX is dead! Long Live $VXXB! There's a (somewhat) new kid on the #Volatility trading block. Are you trading $VXXB #options yet? If not, how are you getting your #Volatility fix these days? $VIX $TVIX $SVXY

- Yes: Jumped into $VXXB

- No: Spreads are too wide

- No: Prefer $TVIX, etc

- No: Prefer $VIX #options

Question from Dave B. - Hi, I have a question about what is the best strategy to use for my trading system. I typically am only right on about three or four trades out of every 10 with long stock. The trades that I am wrong on, I take a small loss - somewhere between 5 to 10% but only 1-2% of the total capital as I typically take 10% positions. The trades that I am right on, I typically make 50% up to 200% over a 3 to 12 month period. I want to find an options strategy to increase returns via leverage, but keep total portfolio risk per trade about the same. Would DITM calls or spreads make sense to you?  Or is there another strategy I could (should) consider. Thank you! Dave B. Sent from my iPhone

Question from LLAZ - What do you think of call verticals in $USO here? Maybe 3-month 5 or 10% otm? Worth financing with a put?

Question from DaQuinta - I've been lured in by the ongoing selloff in crude oil and I'm thinking about setting up a longer-term stock replacement strategy in the USO ETF. I have a couple of questions:

A.) With $USO dropping below $11 is it even worth doing or should I just buy the shares instead? Is there a certain threshold where stock replacement stops making sense?

B.) My proposed construction is an almost six-month strategy with July 8 Calls for $3.10. So my outlay for 100 shares is $3100 versus $10,800.

C. Is it even worth selling a Jan 11.5 call and limiting all of my upside just to collect $.15 or should I keep it open from here?

AROUND THE BLOCK

This Week’s Economic Reports

Feb 15: Import and Export Prices, Industrial Production, Business Inventories, Consumer Sentiment

Topics this week include:

Crude Oil

Metals/Gold

Ags/Hogs

FUTURES OPTIONS FEEDBACK

Question from Caesar L. - Why is palladium catching such a bid? Worth more than gold again?

Question from Model X - Ask the Russell guy which of the Russell products puts up the most contracts? Also when’s the move/shift stuff coming?

Question from Studio64 - Why don’t we see more flavors of equity volatility? There’s VIX and then there’s Eurostoxx and that’s pretty much it. There was talk of more on the horizon but nothing has come of it yet? I’d like more underlying indices other than S&P and more methodology than just the base VIX methodology (maybe some sort of skew product). Thoughts?

Question from Brandon Elliot - Have any good rules of thumb when trading the term structure in seasonal products like corn? Maybe a point when the spreads are just too wide or narrow and need to be traded? What’s typical holding period for these trades? Longer than a month? Thx for answering.