Your Inside Source for Options Information

March 5, 2018

CME Group Strategy Simulator
Test your strategies in a variety of simulated environments

The strategy simulator allows you to:

• Build and run different trading strategies through random, hypothetical price moves – to see the potential profit and loss
• Compare multiple strategies simultaneously – to see which would be more successful based on market conditions
• Manually adjust the underlying futures price, volatility and/or time until expiration – to see the potential profit or loss 

CME has also upgraded the existing CME Institute trading simulator to include:

• Additional Contract Months – Now trade beyond the front month contract, enabling you to practice spreads or simply trade another contract month 
• Contract Expiration – With more contract months added, you can more closely manage a contract position's expiration. Looking to maintain a specific product position? Simulate rolling from the front month to a deferred month. 

 

February Options Volume & Market Share

On March 1, OCC announced overall exchange-listed options volume reached 464,869,500 contracts in February, up 44 percent from February 2017. Equity options volume reached a total of 398,009,570 contracts, a 40 percent increase from February 2017. This includes cleared ETF options volume of 198,333,703 contracts last month, a 15 percent increase over February 2017 cleared volume of 173,248,941 contracts. Index options volume was up 70 percent with 66,859,930 contracts in February.

Year-to-date average daily equity options volume is up 37 percent with 20,241,493 contracts in 2018, while year-to-date average daily index options volume is up 58 percent with 3,077,864 contracts this year.

Details on exchange market share (Source: OCC)

 

 

Upcoming Economic Reports

A preview of what may move the market this week

 

Options Insider Radio Network 

Episodes you may have missed from Options Insider Radio last week

Option Block 695: Talking Trade Wars and SVXY Debacle

Posted March 2nd, 2018

Trading Block: Trump's trade war is spooking the market. SPX off nearly 2%. VIX is back into the 20s. Equity Markets: It's worth noting that at a forward P/E ratio of just over 17x for the S&P 500, valuations do not appear to be stretched. The great SVXY debacle. The numbers are in for February, and they were good (surprise).

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors Inc. Puts roll in iShares S&P 500 Index Fund (XSP). Bullish call love in Salesforce (CRM).

Mail Block: Options question of the week.

There's much debate about SVXY these days. Will it survive 2018? Is it poised for serious upside? We'll table those questions for now and instead ask all of you out there slinging SVXY - what is your weapon of choice? Reply/DM with other suggestions.

• 59% - Naked Long SVXY
• 22% - Long SVXY Calls/Spreads
• 10% - Long SVXY Puts/Spreads
• 9% - Long SVXY w/ Put Hedge

Volatility Flash Poll. Three weeks ago out audience was evenly split on whether SVXY would survive 2018. But the recent changes to its investment objectives have us asking once more - Do you think SVXY will survive 2018?

• 50% - Yes
• 24% - No
• 26% - I'm done with inverse VIX
• Comment from Matt Thompson - Everyone say thank you to ProShares for de-levering SVXY for a day like today.

Around the Block/Economic Reports:

• Mar 1: Jobless Claims, Personal Income
• Mar 2: Consumer Sentiment

 

Options Playbook Radio 198: COST Butterfly into Earnings

Posted March 1st, 2018

Let's review the skip-strike butterfly in PCLN from last week. You can find more on page 108 of The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. The long butterfly (used on the Costco paper trade) is on page 102.

Specifically:

• A review of last week
• A change of name
• Did you adjust?
• Was time on your side?
• Who is up next? Costco Holdings!
• What are we looking for?
• Putting on an at-the-money butterfly
• Selecting strikes
• What is the break even?
• Avoiding the "stupid award"

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.

 

Option Block 694: Let's all Trade SVXY

Posted February 27th, 2018

Trading Block: Earnings Highlights

• Monday - Fitbit
• Tuesday - Macy's, Lumber Liquidators, Priceline.com, Weight Watchers, Papa John's
• Wednesday - Valeant, Lowe's, Mylan, Crocs
• Thursday - Best Buy, Kohl's, AMC Entertainment, Barnes & Noble, Nordstrom
• Friday - JCPenney, Foot Locker

In other news:

• Warren Buffett: 'We've bought more Apple than anything else' in the last year
• Nearly half of 2017's Cryptocurrency 'ICO' Projects Have Already Died

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors Inc. (TSLA), size "line in the sand" in Dicks Sporting Goods Inc. (DKS), bullish risk reversals in American International Group Inc. (AIG), and size calls in Regions Financial Corp. (RF)

Mail Block: Options question of the week

There's much debate about SVXY these days. Will it survive 2018? Is it poised for serious upside? We'll table those questions for now and instead ask all of you out there slinging SVXY. What is your weapon of choice? Reply/DM with other suggestions.

• Naked Long SVXY
• Long SVXY Calls/Spreads
• Long SVXY Puts/Spreads
• Long SVXY w/ Put Hedge
• Comment from Vixland? - Tight Covered Calls !!!!!!!!!!!!

Listener questions and comments:

• Question from Mark Brandt - Has OIR discussed Peter Thiel buying $240M of SVXY puts days before the vol spike? He is smart but that smells fishy.
• Comment from Matt Williamson - @OptionVol $431 outlay ($430 for the covered spread, $1 for the put) to make $69.69/431 = 16% less assignment fees (likely just a few in large blocks) and commissions.
• Comment from CheeButter - We've been waiting for this day - RE: VIX EXPLOSION LAST WEEK
• Question from Allanc - What are the odds of a reverse split for SVXY?

Around the Block/Economic Reports:

• Feb 26: New Home Sales
• Feb 27: Durable Goods, International Trade, Consumer Confidence
• Feb 28: GDP
• Mar 1: Jobless Claims, Personal Income
• Mar 2: Consumer Sentiment

 

This Week in Futures Options 92: Latest Gold, Ags and Crude Research

Posted February 26th, 2018

Topics this week include:

• Metals/Gold
• Ags
• Oil
• Rates/VIX

Futures Options Feedback: Options question of the week

People are spooked about this market. Hedges are flying left and right. So the question remains: How are you hedging your portfolio right now?

• Metals: Gold, Silver, etc.
• VIX Calls / Volatility
• Index Puts (SPY, etc.)
• Bitcoin / Crypto

Listener questions and comments:

• Comment from Scott Somer: Inverse leveraged commodity there are two, one on WTI DWT which ADV of 4.4 million shares, the other on Brent DBRT ADV of 600 shares. Both Triple Bear.

Volatility Views 295: Should Grandmas Trade SVXY

Posted February 26th, 2018

Volatility Review: A look back at the week from a volatility perspective

• VIX Cash - 18.75
• VIX Futures - The March future is very stubborn.
• VIX Options: ADV - 1.05M, VIX call/put: 2.3, Total 11.3m (7.76m Calls, 3.52m Puts)
• Goldman says options-market activity suggests pain ahead in these sectors
• Earnings: INTU, GDDY

Volatility Voicemail: Options question of the week

People are spooked about this market. Hedges are flying left and right. So the question remains: How are you hedging your portfolio right now?

• Metals: Gold, Silver, etc.
• VIX Calls / Volatility
• Index Puts (SPY, etc.)
• Bitcoin / Crypto

Listener questions and comments:

• Comment from the Blacklist Blockchain Trader? - The uncorrelated one known as bitcoin
• Comment from Mark Clyde Brant - Palladium ITM calls!
• Comment from StockMarket Blue - Hedging strategies are actually unwinding in the bond market, causing turbulence in equities markets. Those "trading" in the stock market are flying blind without understanding the carry trade/currency hedging or oversupply of tender re system liquidity. Or the short-VIX unwind.
• Question from J3dingle - Hi Mark, VXX is delisting in January 2019 (with the new Barclay's ETN VXXB to take its place). What will happen to the Jan 2020 VXX options? Thanks, Joseph
• Question from Harryhood - @Options Are the $VXX puts premium dropping with the underlying because the VIX futures term structure is backward? Thanks Mark. Just heard "Mr Umbrage" discuss it on the last OB show. I'm the guy who sent you the Vermont umbrage license pic btw.

Crystal Ball: Wild and reckless prognostication

Last week:

• Mark L. - 17.55
• Mark S. - 16.00
• Kevin - 19.00

This week:

• Mark L. - 16.75
• Mark S. - 15.00
• Bill - 14.00

 

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/