Your Inside Source for Options Information

January 16, 2018


Featured Interview

A favorite interview from Options Insider Radio 

Options Insider Radio Interviews: Talking Options Taxation, Regulation and Education with Craig Donohue

Posted May 17th, 2017

Mark recently attended the 2017 Options Industry Conference, where he was joined by Craig Donohue, Executive Chairman and CEO of the Options Clearing Corporation.

They discuss:

  • What brought Craig back to derivatives and The OCC?
  • The evolution of OCC into regulatory and oversight roles
  • Craig's history with leading large transformations within existing companies
  • The possibility of rolling back regulations
  • Migrating other products to central counterparty clearing
  • The difference between regulated and unregulated derivatives
  • The fight to allow listed options in IRAs and other regulatory struggles
  • What are the origin for leaving options off the list?
  • What is on his radar for the future?
  • Potential taxation implications with transaction taxes and more
  • How many exchanges are too many exchanges?
  • The concentration of liquidity in a few names
  • The need for investor education

 


Upcoming Economic Reports

A preview of what may move the market this week

TIME (ET) REPORT PERIOD FORECAST PREVIOUS
TUESDAY, JAN. 16
8:30 AM Empire state index Jan. -- 18
WEDNESDAY, JAN. 17
9:15 AM Industrial production Dec. 0.50% 0.20%
9:15 AM Capacity utilization Dec. 77.40% 77.10%
10:00 AM Home builders' index Jan. -- 74
2:00 PM Beige Book      
THURSDAY, JAN. 18
8:30 AM Weekly jobless claims 13-Jan 250,000 261,000
8:30 AM Housing starts Dec. 1.300mln 1.297mln
8:30 AM Building permits Dec. -- 1.303mln
10:00 AM Philly Fed Jan. -- 26.2
FRIDAY, JAN. 19
10:00 AM Consumer sentiment Jan. 97 95.9

Options Insider Radio Network 

Episodes you may have missed from Options Insider Radio last week

Options Insider Radio Interviews: Talking AFX, Climate and Crypto with Dr. Richard Sandor

Posted January 12th, 2018

Today's guest is world-renowned financial innovator, Dr. Richard L. Sandor, who is widely regarded as the father of interest rate derivatives and the father of the carbon markets.

He discusses:

  • The American Financial Exchange
  • The genesis of AFX: viability of LIBOR
  • You have to be early to be on time
  • Will there be Ameribor futures and options?
  • Expanding liquidity providing
  • What is the relationship with Cboe?
  • What is on the horizon for AFX in 2018?
  • How things played out with the Climate Exchange
  • His 2017 book, "How I Saw It"
  • His forthcoming book "Electronic Trading and the Blockchain"
  • Is crypto the tip of the iceberg?
  • And more

 

OICs Wide World of Options 45: Panel - Getting Started with Options

Posted January 12th, 2018

WWoO Show 45: Panel - Getting Started with Options

The OIC team of experienced instructors will continue the conversation with the introduction to options for beginners. This lively panel conversation will review the basic language of options; how opening and exit trades work; and important details investors and financial advisors need to know before they invest with options.


In this rebroadcast, OICs webinar panel of experienced professionals will help you gain confidence you need to get started.

 

Option Block 683: Getting Crude with Pot Stocks and Crypto

Posted January 12th, 2018

Trading Block: Crude is hitting new near-term highs. Brent breaks above 70 for the first time since 2014. Kodak is now a crypto company!?

Odd Block: Massive call party in (FXE); Options-palooza in (XOP); Call frenzy in (XLE).

Strategy Block: Uncle Mike Tosaw discusses risk reversals.

Mail Block: Options question of the week

Another "easy" one to help kick off the New Year. Which name are you looking forward to trading options on during the upcoming earnings season? Your fav not here? Choose "Other" and send it in. Best will be shared on #OptionBlock.

  • Apple (AAPL)
  • Tesla (TSLA)
  • Amazon (AMZN)
  • Other

Options Flash Poll: The options industry insists that things have never been better for retail traders. Do you agree?

  • Yes
  • No

Options Flash Poll, Part Deux: Overhead at @stachicago: We need a #speedbump in #Options to create a "level playing field" for all participants. Agree?

  • Yes
  • No
  • What is a #speedbump?

Around the Block: Earnings! JPMorgan Chase (JPM) and Wells Fargo (WFC) release results before market open on Friday, January 12.

 

Options Playbook Radio 191: Facebook Synthetic Stock

Posted January 11th, 2018

In this episode, we are looking beyond the Options Playbook and are using a long combination to create a synthetic stock and buy protection. You can find more on p. 76 of The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • A review of last week's episode
  • What is a synthetic long stock?
  • Where is Facebook now?
  • How to create a synthetic long position
  • Adding a twist...using a put spread
  • Selecting expirations and strikes
  • What is the cost? Risk?

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.

 

Options Insider Radio Interviews: Talking VIX, Trading Pits and Market Making Evolution with Group One

Posted January 10th, 2018

In this episode we feature John Kinahan, CEO of Group One Trading

He discusses:

  • His background in the financial markets and journey to becoming CEO of Group One
  • What are the biggest changes that have happened at Group One?
  • The impact of technology, and the demands of technological advances
  • The metamorphosis of skills required to work in finance
  • The Group One market maker training program
  • How has market making morphed over time?
  • The challenge of weekly options: a double-edged sword.
  • Why did mini options fail?
  • What can we do to incent firms to stay in the business or even enter it new in 2018?
  • The rise of the open outcry trading floor
  • The cost and risk associated with connecting to so many venues
  • What is it has been over the past year with VIX remaining so low yet continuing to do record volume?

 

Option Block 682: INTC Insider Trading, Plus NVDA, TSLA, F and More

Posted January 9th, 2018

Trading Block: Nvidia stocks rises on new of chips being used in handle processing of driverless cars. Intel was aware of the chip vulnerability when its CEO sold off $24 million in company stock & options.

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors (TSLA). Massive call party in Guggenheim CurrencyShares Euro Trust (FXE). Buying more time in Johnson Controls International PLC (JCI)

Mail Block: Options question of the week

2017 was the "Year that Volatility Died." So our 1st #QOTW for 2018 is a puzzler: Where do you think $VIX will close at the end of the year?

  • 16% - Between 7.5-9.99
  • 35% - Between 10- 12.49
  • 13% - Between 12.50 -14.99
  • 36% - Above 15

Listener questions and comments:

  • Question from Ensco8651: Question for the Option Block crew. As learned from this program, cash secured puts are a great way to enter a position on a stock I want to own. Just recently, I sold 2 puts with a strike price of $24. At expiration, the stock was at $23.95 so I anticipated getting 200 shares assigned to me but only received 100. Upon contacting my broker, he explained that the holder of the other 100 shares had a "do not assign" flag on them. Please clarify. I don't believe I have to "option" to not accept the shares if they fall below the strike price. Why should he have the "option" to not assign the stock to me? Thanks guys, GREAT show.

Around the Block: Earnings are on the horizon. Will the SPX hit 2800 by the end of the week? Ally Invest clients are talking about options as protection. Momentum is ridiculous going into earnings.

 

This Week in Futures Options 85: Kicking Off 2018 with a Bang

Posted January 8th, 2018

Topics this week include:

  • Our top 5 show from 2017
  • Crude
  • Gold
  • Bitcoin

Futures Options Feedback: Listeners weigh in

  • Question from Tim Haver - What's the cost for the premium version of QuikStrike? I like the free stuff that I play with during the show and I'm thinking about taking the plunge.

 

Volatility Views 288: Will 2018 Bring Back the Volatility?

Posted January 8th, 2018

Volatility Review: Looking back on the top five Volatility Views episodes of 2017. VIX Cash is back in the single digits again.

Russell's Weekly Rundown

  • VIX Options: ADV - 668k, VIX call/put - 3.9, Total 10.8m (8.52m Calls, 2.26m Puts)
  • Commodities: Volatility is low but ambiguity is sky high.
  • CBOE files to list 6 bitcoin ETFs after being first major exchange to trade cryptocurrency futures.
  • Happy 9th Birthday to Bitcoin

Volatility Voicemail: Listeners have their say

2017 was the "Year that Volatility Died". So our 1st #QOTW for 2018 is a puzzler. Quite simply - where do you think $VIX will close at the end of the year?

  • 14% - Between 7.5-9.99
  • 35% - Between 10- 12.49
  • 14% - Between 12.50 -14.99
  • 37% - Above 15

Crystal Ball: Wild and reckless prognostication.

Last year's 2017 VIX predictions:

  • Mark L. - Avg 15.50, low 10, high 34.5
  • Russell - Avg 17.50, low 12.50, high 37
  • Mark S. - Avg 15, low 10.50, high 24

Next year VIX close at end of 2018:

  • Mark L. - 17.25
  • Mark S. - 11.01
  • Kevin - 14.04

Next week:

  • Mark L. - 9.25
  • Mark S. - 9.57
  • Russell - 9.79

 


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:

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: 9.32 - 10.85

  • S&P Cash Range: 2736.06 - 2787.85

  • SPX 30-Day Implied Volatility: 8.03

  • SPX 10-Day Realized Volatility: 6.93

  • SPX 30-Day Realized Volatility:  6.37

  • SPX Risk Premium (30-Day Implied - Realized): 1.66

  • Market Risk Premium (VIX Cash - SPX 30-day Implied Volatility): 2.13


 

Strategy 101: Brought to you by Ally Invest

Options Playbook Radio 168: AMZN Bullish Skip Strike Butterfly

We are back in earnings season. Given the possibility for big moves, we will look at the skip strike butterfly with calls, which you can find on page 108 of The Options Playbook. This is always available onoptionsPlaybook.com, in on the Amazon Kindle edition.

In this episode:

  • What happens to implied volatiilty around earnings?
  • The dynamics of the trade
  • The more costly the underlying, the more costly the option
  • AMZN announces earnings on 7/27 after the close
  • What is the "expected move"?
  • Picking a close expiration
  • Selecting strikes
  • What is the maximum risk?
  • What is the break-even point?
  • What if we are completely wrong?
  • What is the best-case scenario?

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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