Your Inside Source for Options Information

July 23, 2018


Featured Interview

Options Insider Radio Interviews: Fighting For Screen Real Estate with Fidessa

Posted March 26th, 2018

In this episode, Mark is joined by Yuriy Shterk, the Head of Product Management for Derivatives - Americas at Fidessa.

They discuss:

  • Is there a particular product they are focusing on these days?
  • How has the increase in volatility impacted their clients?
  • Volatility is bringing in new participants to the market
  • Where is the biggest up-tick in activity?
  • Any plans to enter the crypto space?
  • Fidessa's options trading tools
  • Post-trade work flow optimization
  • Fighting for screen real estate
  • And more...

 


Upcoming Economic Reports

A preview of what may move the market this week

IME (ET) REPORT PERIOD FORECAST PREVIOUS
MONDAY, JULY 23
8:30 AM Chicago Fed national activity index June -- -0.15
10:00 AM Existing home sales June 5.45 mln 5.43 mln
TUESDAY, JULY 24
9:45 AM Markit manufacturing PMI flash July -- 55.4
9:45 AM Markit services PMI flash July -- 56.5
WEDNESDAY, JULY 25
10:00 AM New home sales June 670,000 689,000
THURSDAY, JULY 26
8:30 AM Weekly jobless claims 14-Jul 215,000 207,000
8:30 AM Durable goods orders June 2.90% -0.40%
8:30 AM Core capital equipment orders June -- 0.30%
8:30 AM Advance trade in goods June -$69.1 bln -$64.8bln
10:00 AM Housing vacancies Q2    
FRIDAY, JULY 27
8:30 AM Gross domestic product Q2 4.00% 2.00%
10:00 AM Consumer sentiment July 97 97.1

 


Options Insider Radio Network 

Episodes you may have missed from Options Insider Radio last week

Option Block 732: Talking MSFT, TSLA, VIX, and VXX; plus Pairs Trading

Posted July 20th, 2018

Trading Block: A review of the week in trading

  • Amazon and Apple: The race to $1 trillion.

Earnings!

  • Thursday - Microsoft
  • Friday - GE, Honeywell
  • MSFT (after the bell) - $104.70, ATM straddle: $3.70, approx. 3.5%

Odd Block: Bullish risk reversal in Discovery Communications Inc. (DISCA), Rolling call speeds in Omnicom Group Inc. (OMC), Call 3-way in Hanesbrands Inc. (HBI)

Strategy Block: Uncle Mike Tosaw discusses options pairs vs. stock pairs.

Mail Block: Listeners weigh in

Volatility Flash Poll: $VXX is back in the erosion zone. Many short vol traders are anxiously waiting for it to break the 30 handle. When do you think $VXX will finally break 30? This week? Next Week? Never? Let us know below:

  • Week Ending Fri 7/20
  • Week Ending Fri 7/27
  • Week Ending Fri 8/3
  • Never! I'm Long Vol!

Last week's option question of the week: Yup it's earnings season once again. Options traders are gearing up for a busy season. Which names do you think will dominate your options trading this season?

  • 17% - $NFLX
  • 44% - $AMZN
  • 22% - $TSLA
  • 17% - $GOOGL

Around The Block/This Week in the Markets:

  • Jul 19 - Jobless Claims

 

This Week in Futures Options 111: Fun with Silver

Posted July 20th, 2018

Topics This Week Include:

  • Silver/Gold
  • Crude
  • Equities/Russell

Futures Options Feedback

  • Question from Daniel - Saw what looked like a gold fly in the TWIFO report but Nick from QuikStrike said he didn't see it in the block reports. Why is that? Are all trades not reported in the block trade reports?
  • Question from Yancy - I heard it said that there are 20 active names and about 75 tradeable names in the equity options market for retail and that's about it. How does it shake out in futures options?

 

Options Insider Radio Interviews: Talking Options TCA with S3

Posted July 19th, 2018

In this episode, Mark is joined by Mark Davies and John Standerfer, the CEO and CTO of S3.

They discuss:

  • What does S3 do?
  • Volume and volatility are back
  • Liquidity and execution issues
  • Too many options symbols?
  • More exchanges
  • TCA in the options market
  • Crypto obsession
  • And more....

 

Options Insider Radio Interviews: Talking Risk, Market Makers and More with Rival Systems

Posted July 19th, 2018

In this episode, Mark is joined by Rob D'Arco, CEO at Rival Systems.

They discuss:

  • How was Rival formed?
  • What does Rival do?
  • What are the new functions customers can expect at Rival?
  • Liquidity and the plight of market makers
  • Generating new business
  • And more...

 

Options Playbook Radio 217: GOOGL Diagonal into Earnings

Posted July 19th, 2018

We are in the heart of earnings season, and next week a lot of the FANG stocks will announce. Let's take a look at a diagonal spread in GOOGL. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • Why a diagonal spread?
  • What is a diagonal spread?
  • Setting up a trade
  • GOOGL announces earnings on 7/23
  • Selecting the strikes and expirations
  • What do we want to happen? What do we want to avoid?
  • What is the risk? Reward?
  • Remember margin!

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: Connecting the Crypto World with Coinigy

Posted July 17th, 2018

In this episode, Mark is joined by Derek Urben, CFO and Director of Business Development at Coinigy.

They discuss:

  • His background in the crypto space
  • Why Wisconsin?
  • Why use Coinigy?
  • The benefits of decentralization
  • Can you use the platform just for charting?
  • Data services
  • Who manages the wallet?
  • Physical and digital security
  • How is tether operated and regulated?
  • Participating in ICOs

 

Option Block 731: Mystery Risk Reversals and Funky Puts

Posted July 17th, 2018

Trading Block: A review of the week so far from a trading perspective

  • Amazon.com down on its biggest day of the year.
  • The trade war continues to scare no one.

Earnings!

  • Monday - Netflix
  • Tuesday - Goldman Sachs, Johnson & Johnson, United
  • Wednesday - IBM, eBay, American Express
  • Thursday - Microsoft
  • Friday - GE, Honeywell
  • NFLX - ATM Straddle: $35, approx. 9%

Odd Block: Bullish stupid in Cleveland-Cliffs Inc. (CLF). Risk reversal in Interpublic Group of Companies Inc. (IPG). Put roll in QEP Resources Inc. (QEP).

Mail Block: Listeners have their say

Options question of the week: Yup it's earnings season once again. Options traders are gearing up for a busy season. Which names do you think will dominate your options trading this season?

  • NFLX
  • AMZN
  • TSLA
  • GOOGL

Listener questions and comments:

  • Question from FlyGuy - Hey what do you guys do with your long calendar spreads? Do you close out the short leg if the stock doesn't move then keep the long leg or just close the whole spread out?
  • Question from Flyer - What are some of the best ways to trade put options?

Around the Block/This Week in the Markets:

  • Jul 17 - Industrial Production
  • Jul 18 - Housing Starts, Beige Book
  • Jul 19 - Jobless Claims
  • Federal Reserve Chairman Jerome Powell is set to deliver the semiannual monetary policy statement on Tuesday and Wednesday.

 

Volatility Views 313: Talking Short Volatility

Posted July 16th, 2018

Volatility Views 313: Talking Short Volatility

Volatility Review: Today's guest is David Lincoln, ex-CBOE Market Maker and Host of The Short Vol Show on YouTube.

A look back at the week from a volatility perspective:

  • What trade war? The market has rallied almost non-stop post Trump trade war
  • VIX Cash - 12.50, 1.25 point lower than last week.
  • VVIX - 101, almost unchanged from last week.
  • VIX Option - ADV: 496k, VIX call/put: 2.8/1, Total 7.89m (5.82m Calls, 2.07m Puts)
  • Risk reversals keep popping up.
  • VXX - 31.6, 3 points lower than last week.
  • VIX ETF love affair endures as volatility falls

Volatility Voicemail: Options question of the week, part one.

Traders generally fade volatility going into holidays (today notwithstanding). What's your favorite vehicle when you want to wager on the dark side of volatility? Short-term or Long-term - that's up to you.

  • 27% - Short VIX Futures
  • 17% - Long $VIX Puts/Spread
  • 33% - Long $VXX Puts/Spread
  • 23% - Short $VIX Calls/Spreads

Options question of the week, part two.

Trading options during earnings season can be challenging. Some live for it while others avoid it. Do you hold options positions through earnings announcements? If so, what is your approach? Or do you prefer to trade just before/after the event? Or is it all too risky?

  • Yes, Short Premium
  • Yes, Long Premium
  • No, Too Risky
  • I trade around the event

Listener questions and comments:

  • Question from Vixland -Why would these puts gain value? $VXX never crashes down. Please explain. Love the shows. KEEP IT UP!
  • Comment from Beachlot - With on the story from Bloomberg last week. They should be embarrassed writing a story on a 70k vol trade.
  • Question from BT Burg - What is the best way to trade these inverse VIX ETFs going forward? If I'm long XIV does it make sense to always have some VIX calls in my back pocket just in case? Doesn't that get expensive really quick? What about spy puts? Or should I just have puts on the inverse ETF in case the counterparties get cold feet?

Crystal Ball: Wild and reckless prognostication

Last week:

  • Mark L. -12.50
  • Mark S. -12.90
  • Guest - 13.63

This week:

  • Mark L. - 12.20
  • Andrew - 12.25
  • Guest - 11.99

 

This Week in Futures Options 110: Trade War Takes On All Comers

Posted July 16th, 2018

Topics this week include:

  • Crude
  • Equities/Russell
  • Metals/Gold
  • Ags/Soybeans

Futures Options Feedback: Listeners weigh in

  • Comment from L Sert - Missed Nick on the show. What's his thought on the big $150 crude prediction?
  • Question from P Kell - Looking at CME TWIFO page and trying to figure it out. What do the numbers in the 25D and 25D QuikSkew columns mean? Apologize if you've answered this before but just discovered the show.

 

Options Insider Radio Interviews: Talking Crypto with Athena Bitcoin

Posted July 16th, 2018

In this episode Mark is joined by Eric Gravengaard, CEO at Athena Bitcoin, Inc.

They discuss:

  • Eric's history in finance
  • Making the leap from options to crypto assets
  • Shifting the crypto trading mecca
  • Waiting for your trades in the crypto ether
  • Physical location risk
  • The Athena "floor" for Bitcoin traders
  • Bitcoin ATMs and who needs them
  • When can we expect to get Bitcoin options?
  • Thoughts on crypto manipulation

 


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: 12.47 - 13.58

  • S&P Cash Range: 2789.21 - 2817.76

  • SPX 30-Day Implied Volatility: 9.10

  • SPX 30-Day Realized Volatility:  8.56

  • SPX Risk Premium (30-Day Implied - Realized): 0.54

  • Market Risk Premium (VIX Cash - SPX 30-day Implied Volatility): 3.76


 

Strategy 101: Brought to you by Ally Invest

Options Playbook Radio 192: Taking a LEAP with ISRG

Posted January 18th, 2018

In this episode, we are looking beyond the Options Playbook and are selling a put credit spread to pay for a long call. 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:

  • Looking at Intuitive Surgical, Inc. (ISRG), which has been on a tear lately
  • Earnings pushed the stock even higher
  • Expensive underlying = expensive options
  • Taking a long view using LEAPS
  • Selecting strikes for the put spread
  • Buying the at-the-money call
  • How does the trade work?
  • What is the cost?
  • What is the risk?
  • How to close it out?
  • Alternatives to the trade as described

 

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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