Your Inside Source for Options Information

January 29, 2018


Featured Interview

A favorite interview from Options Insider Radio 

Options Insider Radio Interviews: Talking Weeklies, Auctions and More with CBOE

Posted May 12th, 2016

In this episode, Mark is joined by Bill Looney, Head of CBOE New York.

They discuss:

  • Recent developments happening at CBOE
  • Options volume
  • Navigating the waters of listing new products, including MSCI and FTSE
  • The Options Institute expansion into Asia
  • Expanded hours for SPX and VIX options
  • The plight of liquidity providers
  • Exchanges: how many are too many?
  • Price improvement auctions
  • Monday expirations

 


Upcoming Economic Reports

A preview of what may move the market this week

TIME (ET) REPORT PERIOD FORECAST PREVIOUS
MONDAY, JAN. 29
8:30 AM Personal income Dec. 0.30% 0.30%
8:30 AM Consumer spending Dec. 0.50% 0.60%
8:30 AM Core inflation Dec. 0.20% 0.10%
TUESDAY, JAN. 30
9:00 AM Case-Shiller home prices Nov. -- 6.20%
10:00 AM Consumer confidence index Jan. 125 122.1
10:00 AM Home ownership rate Q4 -- 63.90%
WEDNESDAY, JAN. 31
8:15 AM ADP employment Jan. -- 250,000
8:30 AM Employment cost index Q4 0.50% 0.70%
9:45 AM Chicago PMI Jan. -- 67.6
10:00 AM Pending home sales Dec. -- 0.20%
2:00 PM FOMC announcement   1.25-1.5% 1.25-1.5%
THURSDAY, FEB. 1
8:30 AM Weekly jobless claims 27-Jan 238,000 233,000
8:30 AM Productivity Q4 0.10% 3.00%
8:30 AM Unit labor costs Q4 1.00% -0.20%
9:45 AM Markit manufacturing PMI Jan.   --
10:00 AM ISM manufacturing index Jan. 58.50% 59.70%
10:00 AM Construction spending Dec. 0.50% 0.80%
Varies Motor vehicle sales Jan. 16.5 mln 17.9 mln
FRIDAY, FEB. 2
8:30 AM Nonfarm payrolls Jan. 171,000 148,000
8:30 AM Unemployment rate Jan. 4.10% 4.10%
8:30 AM Average hourly earnings Jan. 0.30% 0.30%
10:00 AM Consumer sentiment index Jan. 95 94.4
10:00 AM Factory orders Dec. 1.00% 1.30%




Options Insider Radio Network 

Episodes you may have missed from Options Insider Radio last week

Option Block 686: Bridging the ETF-Options Divide

Posted January 26th, 2018

Trading Block: Earnings!

  • Monday: Netflix
  • Tuesday: Johnson & Johnson, Procter & Gamble, Travelers, Verizon
  • Wednesday: GE, United Technologies
  • Thursday: Caterpillar, 3M, Intel (Caterpillar doing crazy volume today - over 130k contracts on the tape.) Netflix, Intel and Starbucks.

Odd Block: Size near-term put sales in (NWL). Crazy move sparks crazy volume in (MNKD). Size short call roll in (SAN).

Strategy Block: Mike Tosaw discusses his most recent SPY trades

Mail Block: Options questions of the week

Since we're down at #InsideETFs this week we thought we'd make our #Options #QOTW about #ETFOPTIONS. Quite simply - what is your favorite ETF/ETP #option to trade?

  • $SPY
  • $GLD
  • $VXX
  • Other (reply w/answer)

Bitcoin #Futures are currently trading around $11,500. If #Options existed, how would you trade them? Assuming one-month to expiration would you...?

  • 27% - Buy 5% OTM Call
  • 32% - Buy 5% OTM Put
  • 16% - Sell 5% OTM Covered Call
  • 25% - Just Short The Future

Around the Block: Economic Reports This Week

  • Jan 26: GDP, Durable Goods

 

Options Playbook Radio 193: TSLA Calendar Spread

Posted January 25th, 2018

In this episode, we are looking at a calendar trade around earnings in TSLA. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • Where is TSLA trading as of this recording?
  • When are they expected to announce earnings?
  • Where is the at-the-money straddle right now?
  • Setting up a trade into earnings
  • Selecting a strike
  • The volatility caveat
  • What is the desired outcome?

Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

 

Advisors Option 63: Using Options in IRAs

Posted January 24th, 2018

Tricks of the Trade: Using options in retirement accounts.

  • What are the limitations of trading options in a retirement account?
  • What strategies can you utilize?
  • Stock replacement strategy: what is it?
  • Long-term stock replacement strategy with a covered call, aka fig leaf strategy.

The Buzz: What do informed advisors need to know?

Office Hours: Listener questions and comments

2017 was the "Year that Volatility Died". So our first question of the week for 2018 is a puzzler. Quite simply: where do you think $VIX will close at the end of the year?

  • Between 7.5-9.99
  • Between 10- 12.49
  • Between 12.50 -14.99
  • Above 15

Listener questions: What's on your mind?

  • Question from L Penguin - I'm a new options trader and I want to buy a LEAP call because it looks like the stock is going to go to up in the next 12 months, but I don't want to commit yet. I also want to generate income while I hold that position. What are your thoughts on selling the call while I have the leap? Also, this stock has an attractive dividend that I'd like to capture. Is this even possible? Interested in your thoughts, thanks!...I was thinking about buying a deep in the money call for the LEAP, and then depending on where the stock is trading at the time, sell closer to the money.

 

Option Block 685: Shutdown

Posted January 23rd, 2018

Trading Block: The Dow sets all-time intraday record as Senate votes to end government shutdown

Earnings This Week:

  • Monday: Netflix
  • Tuesday: Johnson & Johnson, Procter & Gamble, Travelers, Verizon
  • Wednesday: GE, United Technologies
  • Thursday: Caterpillar, 3M, Intel

Odd Block: Calls and puts trade in Patterson UTI Energy (PTEN). Puts trade in Harley Davidson Inc (HOG). Puts roll in HCA Healthcare Inc (HCA).

Strategy Block: Mike Tosaw discusses buying OTM calls in this current market

Mail Block: Options question of the week

Bitcoin futures are currently trading around $11,500. If #Options existed, how would you trade them? Assuming one-month to expiration would you...?

  • 27% - Buy 5% OTM Call
  • 32% - Buy 5% OTM Put
  • 16% - Sell 5% OTM Covered Call
  • 25% - Just Short the Future

Listener questions and comments:

  • Question from CharlieC - What's the weirdest thing you've seen in the options market?
  • Question from Markit - What's the truth about all the talk about VIX being moved using SPX puts? Is this a thing? Can you please discuss on the network?

Around the Block/Economic Reports This Week:

  • Jan 24: Existing Home Sales
  • Jan 25: Jobless Claims, International Trade, New Home Sales
  • Jan 26: GDP, Durable Goods

 

This Week in Futures Options 87: Deep Dive into Russell 2000 Volatility

Posted January 22nd, 2018

Today we feature Sean Smith, Managing Director of Derivatives Licensing & Exchange Data at FTSE Russell.

Topics this week include:

  • Looking back at the Russell 2000 in 2017Crude Oil
    • RUT up nearly 12%
    • Interesting trends and developments
    • Russell options breakdown from this week
    • Bonus: RVX
  • Ags
  • Metals

Futures Options Feedback: Options question of the week

Bitcoin futures are currently trading around $11,500. If #Options existed, how would you trade them? Assuming one-month to expiration would you...?

  • Buy 5% OTM Call
  • Buy 5% OTM Put
  • Sell 5% OTM Covered Call
  • Just Short the Future

Listener questions and comments

  • Question from Alfred: Why aren't CME Bitcoin futures listed on the COT reports?
  • Question from Camper: Do you notice any interesting patterns in corn volatility skew ahead of crop planting or harvesting?
  • Question from Daley: Can I use QuikStrike to compare and contrast skew charts for the indices to try to find trading opportunities between SPX/DOW, SPX/RUT and all? Thx.
  • Question from Lromero: Do all indices have the same issue with OTM puts being so outrageously expensive? Where can I go for cheap protection?
  • Question from Kondit: what is shortest duration option contract available on Globex?

 

Volatility Views 290: VIX Whales and Bitcoin Options

Posted January 22nd, 2018

Volatility Review: Government shutdown moves the market going into the weekend. VIX cash is firmly back in the double digits.

Russell's Weekly Rundown:

  • ADV - 746k, VIX call/put - 4.6, Total 10.1m (8.29m Calls, 1.82m Puts
  • Looking back on the VIX whale from last Wednesday.
  • Earnings volatility this week.
  • January has been a rough month for Bitcoin.

Volatility Voicemail: Options question of the week.

Bitcoin futures are currently trading around $11,500. If options existed, how would you trade them? Assuming one-month to expiration would you...?

  • Buy 5% OTM Call
  • Buy 5% OTM Put
  • Sell 5% OTM Covered Call
  • Just Short the Future

Listener questions and comments:

  • Comment by TradingProverbs - "More money has been lost trying to anticipate and protect from corrections than actually in them." - Peter Lynch

Crystal Ball: Government shutdown related prognostication

Last week:

  • Mark L. - 9.55
  • Andrew - 9.95
  • Kevin - 9.75

This week:

  • Mark L. - 10.55
  • Mark S. - 10.00
  • Russell - 11.99
  • Matt - 11.50

 


Where to Find Options Insider Radio?

Do you know all the ways you can access Options Insider Radio

             


Options Insider Radio Network Live Recordings

Do you want to be a part of the fun?

This is when you can access the LIVE shows this week:

Monday:

Option Block LIVE at 3pm Central


Thursday:

Option Block LIVE at 3pm Central


Friday:

Volatility Views LIVE at 12pm Central

This Week in Futures Options LIVE at 1:30 Central. As always, you can join in the fun at http://mixlr.com/options-insider/


Stats from Last Week

  • VIX Cash Range: 10.77 - 12.19

  • S&P Cash Range: 2808.12 - 2872.87

  • SPX 30-Day Implied Volatility: 9.21

  • SPX 10-Day Realized Volatility: 8.13

  • SPX 30-Day Realized Volatility:  7.15

  • SPX Risk Premium (30-Day Implied - Realized): 2.06

  • Market Risk Premium (VIX Cash - SPX 30-day Implied Volatility): 1.87


 

Strategy 101: Brought to you by Ally Invest

Options Playbook Radio 170: Getting out of Straddles

It's time for listener questions on Options Playbook Radio. Do you have a question that you want answered on a future episode? Send them to Brian at theoptionsguy@invest.ally.com, or to the Options Insider at questions@theoptionsinsider.com.

In this episode Mark and Brian discuss:

  • Question from LesNod: How the heck do you actually get out of straddles? One side of a straddle is always a loss!
  • Question from Jelly: Can I buy longer-term options than LEAPS?
  • Question from Kim D.: How high to rates need to go before I need to worry about rho?
  • Question from Axel D.: Why do they update open interest only once a day?

Do you have questions that you would like answered on the show? Send them to Brian at theoptionsguy@invest.ally.com.


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