Featured Interview Options Insider Radio Interviews: Talking Options Taxation, Regulation and Education with Craig Donohue 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... 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 possiblility 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 | | MONDAY, JULY 2 | | 9:45 AM | Markit manufacturing PMI (final) | June | -- | 54.6 | | 10:00 AM | ISM manufacturing index | June | 58.30% | 58.70% | | 10:00 AM | Construction spending | May | 0.00% | 1.80% | | TUESDAY, JULY 3 | | Varies | Motor vehicle sales | June | 16.9 mln | 16.9 mln | | 10:00 AM | Factory orders | May | -0.10% | -0.80% | | WEDNESDAY, JULY 4 | | Â | None scheduled | Â | Â | Â | | THURSDAY, JULY 5 | | 8:15 AM | ADP employment | June | -- | 178,000 | | 8:30 AM | Weekly jobless claims | 23-Jun | 224,000 | 227,000 | | 9:45 AM | Markit services PMI (final) | June | Â | 56.5 | | 10:00 AM | ISM nonmanufacturing index | June | 58.00% | 58.60% | | 2:00 PM | FOMC minutes | Â | Â | Â | | FRIDAY, JULY 6 | | 8:30 AM | Nonfarm payrolls | June | 205,000 | 223,000 | | 8:30 AM | Unemployment rate | June | 3.80% | 3.80% | | 8:30 AM | Average hourly earnings | June | 0.30% | 0.30% | | 8:30 AM | Foreign trade in goods, services | May | -$43.6 bln | -$46.2 bln |
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Options Insider Radio Network Episodes you may have missed from Options Insider Radio last week
Posted June 29th, 2018 Trading Block: A review of the week in trading - VIX Cash - started at 18.99, ended at 16.70
- Earnings: Nike after the bell - $71.70, ATM straddle - $3.40, approx. 5%
Odd Block: Size money call roll in Devon Energy Corp (DVN). Call vertical in CVS Health Corp (CVS). Size puts in PowerShares DB US dollar Index (UUP) Strategy Block: Uncle Mike discusses selling a call spread versus selling a call. Mail Block: - Question form Jack Daniels trades: Pump me up $WWE don't fade! Huge TV deal billionsss. Let's go.
- Question from BuddyBoy79: Can you please explain what relative strength and weakness mean as they pertain to options trading?
Around the Block/This Week in the Market - Jun 28: Jobless Claims, GDP
- Jun 29: Personal Income, Consumer Sentiment
 Posted June 28th, 2018 Options 101: Calendar & Diagonals - This strategy combines a longer-term bullish outlook with a near-term neutral/bearish outlook.
- Variations?
- Profit/Loss and breakeven
- Volatility, time decay and assessment risk
- Calendars vs Diagonals - when should you use one over the other?
- Using long dalendars during earnings
The Buzz: What news do informed advisors need to know? - OCC cleared contract volume increased 8% in May.
- Google search data reveals options trading search interest is roughly half of what it was in 2004.
Office Hours: Listeners weigh in Options question of the week: Google Trends is full of interesting, and surprising, data. When you analyze the "options" search data you uncover some surprising results. Which brings us to this week's question: Which "sub region" is currently ranked 1 for overall "options" interest by Google? - Illinois
- California
- New York
- Maine
Listener questions and comments - Comment from TMal - So I have this exact thing going on right now, put diagonal with different futures underlying. 90-day difference, the Vegas act totally different, throw some futures spread risk in there, hard to quantify exactly what's causing the changes in the P/L, futures spread? Vol spread? Net deltas? Net thetas? It's complicated stuff. Nuances indeed holy cow. Plant the seed and let it grow naturally.
- Comment from AKeats - Just discovered the radio show, and I am absolutely hooked! Great content!
- Question from Brad K. - I'm learning a lot from you guys - particularly about the value of hedging. I also took your advice and switched to an advisor who uses options much more actively. Now I'm starting to spread my wings to the commodities particularly crude oil. I want to hedge my oil exposure with WTI options. Does the Swan DRS on crude use WTI or USO options? Also I would please like to know the panel's thoughts on trading options on commodities vs. equities. Any major differences I should be aware of? Thanks again and please keep the education coming our way.
 Posted June 28th, 2018 Tariff turmoil is rocking the market and is beating up some stocks, including Boeing (BA). You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition. Specifically: - Implied volatility is spiking because of talk of tariffs
- BA announces earnings on 7/25
- Stock has fallen about 40 points over the last month
- Putting on a long call spread
- Selecting strikes and expirations
- What is the total cost?
- What do we want to happen?
- What is the maximum risk? Reward?
- Rolling and adjusting options
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.  Posted June 26th, 2018 On Strategy Spotlight, Joe Burgoyne covers the intricacies of Backspreads with Dave Whitmore of E*TRADE and then meet Joe Cusick, OIC's Director of Institutional Outreach as he discusses his background in the industry and some of his OIC initiatives. Plus, Joe will answer listener questions.  Posted June 26th, 2018 Trading Block: Trump's trade war spooks the market. Again. Bitcoin manipulation via tether. Who out there is trading or interested in Crypto? What are you trading? Odd Block: Call writing frenzy in Campbell Soup Company (CPB). Call palooza in Market Vectors Oil Services ETF (OIH). Call love in Fiat Chrysler Automobiles (FCAU). Mail Block: Listeners take over Options question of the week. Let's have some fun. These "entertainment" stocks are pricing in big moves. Gun to your head: Which July ATM straddle would you rather own in your portfolio? $WWE $DIS $WYNN $SEAS #DegeneratePremiumBuyers #PalmsIn #FearNoTheta - 17% - $WWE July ATM Strad: $7
- 37% - $WYNN July ATM Strad: $12
- 16% - $SEAS July ATM Strad: $2
- 30% - $DIS July ATM Strad: $5
Listener questions and comments: - Comment from SecretlyPsyched: Is it possible to short-sell a campaign? Or how about an entire state party? Some sort of derivative strategy?
- Question from Nowledg3ispowerl: So turns out you guys are absolutely right. I have a very poor understanding of options. What's the best podcast episode for beginners?
- Comment from the chat room re: TSLA.
- Question from HeyBartenderman: Hi. I have a question for you. If I'm interested in buying options in a stock, what's the best way to go about finding the best strike/expiry?...Basically, if I sold a stock for a nice profit, but then wanted to participate in a move higher should it keep going up (for example $IQ). Or if I've been watching something, and think it's about to break out, but don't know exactly when, which options should I be looking at? Weeklies, monthlies, leaps, etc....When is it better to do one length of option over another, I think is basically the question I have. Thanks.
Around the Block: Will they or won't they re: trade wars. Â Posted June 25th, 2018 Volatility Review: A look back at the week from a volatility perspective - Fiddy cent returns
- Seagull spread?
- VIX cash: 14.64
- Tweaks to VIX
- VVIX: 107.50
- Google interest: Top five states with the most interest in volatility (Mark S. got 2/5)
- Google interest: Top five states with the most interest in VIX
- VIX options
- Big call and put strips
- The VXX whiff of weirdness
Volatility Voicemail: Listeners have their say Options Question of the Week: Let's have some fun. These "entertainment" stocks are pricing in big moves. Gun to your head: Which July ATM straddle would you rather own in your portfolio? WWE? DIS? WYNN? SEAS? #DegeneratePremiumBuyers #PalmsIn #FearNoTheta - WWE July ATM Strad: $7
- WYNN July ATM Strad: $12
- SEAS July ATM Strad: $2
- DIS July ATM Strad: $5
Listener questions and comments: - Question from Rick S.: What exactly does it mean to roll positions the week of expiration?
- Question from Telly0: Are there any long VIX vehicles that don't erode to zero?
- Comment from JTack: Looks like call front spreads (short 1 near OTM, long 2 farther OTM) in VXX are the best way to hedge long term VXX puts. That way you're covered against a blowup but you're not shelling out a ton for straight up calls or verticals.
Crystal Ball: Wild and reckless prognostication Last guess: - Mark L. 11.85
- Andrew: 11.80
- Mark S. 11.55
This week: - Mark S. 11.55
- Mark L. 12.05
 Topics this week include: It's Russell Reconstitution time: Russell 1000 & 2000 rebalancing today. Could result in the most heavily traded session of 2018. Equity volatility. Will we see a vertical asymptote? CME's new OPEC watch tool Crude: OPEC... Posted June 25th, 2018 Topics this week include: - It's Russell Reconstitution time: Russell 1000 & 2000 rebalancing today. Could result in the most heavily traded session of 2018.
- Equity volatility. Will we see a vertical asymptote?
- CME's new OPEC watch tool
- Crude: OPEC ministers agree to raise oil production but don't say by how much
- Ag chat: beans hit nine-year low on rejeuvenated trade war talk
- CME Bitcoin futures off another 500 handles
Futures Options Feedback: Listeners take over - Question from Tim Kessler: Do you need a futures account if you just want to trade options on futures?
- Question from Nicholas: Thoughts on the reports from the VIX-rigging prof that someone propped up the price of bitcoin last year? You guys buying what he's selling?
- Question from Bellat: What do you think of crypto vol at these levels, particularly Bitcoin? Are you guys doing any trading even though there aren't really any true options available yet?
Where to Find Options Insider Radio? Do you know all the ways you can access Options Insider Radio              Â
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/
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