Your Inside Source for Options Information

December 10, 2018


Featured Interview

Options Insider Radio Interviews: What Options Traders Can Expect from E*Trade

Posted May 7th, 2018

In this episode, Mark is live at the 2018 Options Industry Conference where he caught up with Chris Larkin, Senior Vice President of Trading Product at E*Trade. They discuss:

  • The acquisition and integration of Options House and E*Trade platforms
  • Rebuilding the platform from the ground up
  • Lowering the barrier to entry for new options traders
  • What percentage of trades happen on mobile devices?
  • Increasing the community offering
  • Addressing the liquidity issue
  • What about after hours options trading?
  • And more.

Upcoming Economic Reports

A preview of what may move the market this week

TIME (ET) REPORT PERIOD FORECAST PREVIOUS
MONDAY, DEC. 10
10:00 AM Job openings Oct. -- 7.0 mln
TUESDAY, DEC. 11
8:30 AM Producer price index Nov. 0.00% 0.60%
WEDNESDAY, DEC. 12
8:30 AM Consumer price index Nov. 0.00% 0.30%
8:30 AM Core CPI Nov. 0.20% 0.20%
2:00 PM Federal budget  Nov. -- -$139bln
THURSDAY, DEC. 13
8:30 AM Weekly jobless claims 8-Dec 225,000 231,000
8:30 AM Import price index Nov. -- 0.50%
FRIDAY, DEC. 14
8:30 AM Retail sales Nov. 0.10% 0.80%
8:30 AM Retail sales ex-autos Nov. 0.20% 0.70%
9:15 AM Industrial production Nov. 0.40% 0.10%
9:15 AM Capacity utilization Nov. 78.60% 78.40%
10:00 AM Business inventories Oct. -- 0.30%


Options Insider Radio Network 

Episodes you may have missed from Options Insider Radio last week

Option Block 765: Tariff Man Brings Back Volatility

Dec 7, 2018

Trading Block: A look back at the week in trading

  • Tariff Man spooks the market…again.
  • Exchanges were closed on Wednesday, December 5 in observance of a National Day of Mourning for the late George HW Bush.
  • Netflix blew $100M on Friends reruns for one year!

Most active this week:

  • SPY - 3.01M (ADV 1.43M)
  • VIX - 476K

Earnings Highlights:

  • Tuesday - Dollar General, HP
  • Wednesday - Five Below
  • Thursday - The Kroger Co., Broadcom, Michaels, Ulta
  • Friday - Big Lots

Odd Block: Tesla put summary, opening Dec put love in Signet Jewelers Ltd. (SIG), opening Jan put love in Teradyne, Inc. (TER), and opening Feb call love in Lennar Corporation (LEN)

Mail Block: Listener questions and comments

  • Question from Daleon - Hey! I'm something of an options noob but I'm learning from listening to you guys. Still haven't pulled the trigger on my first trade. My question - what's the best and easiest starting point for noobs? I mostly have SPY in my portfolio right now. Is it selling calls on SPY? Am I correct that those calls would be considered covered? Fun show. Also liking the playbook program.

Around the Block/This Week in the Markets:

  • Dec 7 - Unemployment, Consumer Sentiment

 

This Week in Futures Options 129: Futures Options as a Strategic Investment

Dec 7, 2018

Today's special guest co-host is Russell Rhoads, Formerly Dr. VIX and current Head of Derivatives Research at the Tabb Group.

Topics this week include:

  • Crude Oil/WTI
  • Nat Gas
  • Equities
  • Metals/Gold/Copper
  • Ags/Soybeans

Futures Options Feedback: Listeners take the reins

  • Question from Elleneals - Given the skew setup in equities with calls being cheaper than puts from a vol perspective why would you ever buy a collar? Why doesn't everyone always sell the skew and use bullish risk reversals? The market seems to be set up for it.

 

Options Playbook Radio 237: Time Bomb Butterfly in S&P 500

Dec 6, 2018

When the market conditions are right, it can be a good time to trade a butterfly in the S&P 500. Now is the time. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

  • Where is the S&P 500 index right now?
  • Buying a December 7 butterfly
  • Selecting strikes
  • What is the total risk?
  • What do we want to happen?
  • What's the maximum upside?
  • What is the market forecast?
  • What to do if the market moves against us?
  • Capital requirements
  • And more...

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 764: Trade War, GE Palooza, Risk Management and More

Dec 4, 2018

Trading Block: Exchanges closed on Wednesday, December 5 in observance of a National Day of Mourning for the late George HW Bush.

Earnings Highlights:

  • Tuesday - Dollar General, HP
  • Wednesday - Five Below
  • Thursday - The Kroger Co., Broadcom, Michaels, Ulta
  • Friday - Big Lots

Also:

  • Oil selling off - WTI Crude back in the $40 handle.
  • Bitcoin crushed - BTC threatening 4000.

Odd Block: Tesla put summary, possible opening call sale in (GPOR), put love in (PVG), and put love in (BEL).

Strategy Block: Uncle Mike Tosaw discusses purchasing long delta in options.

Mail Block: Options question of the week

AAPL continues to take a beating - recently dropping below $175. We know many of you LOVE to trade $AAPL and this selloff creates opportunities. Looking ahead to Jan 2019 expiration- which trade would you prefer to make in AAPL right now?

  • Sell Jan 150P for $1.65
  • Buy Jan 150P for $1.65
  • Sell Jan 200C for $1
  • Buy Jan 200C for $1

Listener questions and comments:

  • Comment from Mark Brant: Bot a million DOGE because it was cheaper than BTC. Spikes off lows take about 60 days to show up. For free on Robinhood! Short put spreads USO OIH came in nicely! Andrew and Mark miss a lot of VIX trades because their bias is down. My bias is up. Always looking at the 16 delta Calls! NG RR is on fire! Eurodollar HV much lower than IV as per usual.

Around the Block/This Week in the Markets

  • Dec 3: Construction Spending
  • Dec 5: Productivity and Costs, Beige Book
  • Dec 6: Jobless Claims, Factory Orders
  • Dec 7: Unemployment, Consumer Sentiment

 

Volatility Views 331: The Winners of the Great Crystal Ball Contest

Dec 3, 2018

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

  • VIX Cash - 19.4, almost unchanged from two week ago
  • VIX - 94, 12-points lower than last show
  • VIX Options - ADV: 546k, Total 6.77m (4.81m Calls, 1.95m Puts)
  • VXX - 35.5, 1-point lower than last show
  • Crypto crushed below $4k recently

Volatility Voicemail: Options question of the week:

AAPL continues to take a beating - recently dropping below $175. We know many of you LOVE to trade $AAPL and this selloff creates opportunities. Looking ahead to Jan 2019 expiration- which trade would you prefer to make in $AAPL right now?

  • Sell Jan 150P for $1.65
  • Buy Jan 150P for $1.65
  • Sell Jan 200C for $1
  • Buy Jan 200C for $1

Listener questions and comments

  • Comment from Pete Yarbro - I'd sell this strangle.
  • Question from EELC5 - What's the lowest volatility can get in the SPX?
  • Comment from Nilai - I like Mark's idea for an erosionator in VXX. Would be something interesting to watch. Kind of like a smog report or tide report but for VXX.

Crystal Ball: Wild and reckless prognostication.

Two weeks ago we asked people to guess where VIX would close on 11/30 by the end of the show. Answer: 18.80

  • Mark L.: 18.15
  • Mark S.: 15.25
  • R Ray: 19.70 -.9
  • Richie Rich: 17.1
  • Alex P: 17.50
  • William Valentine: I'm going with 16-ish. (I'll define the margin of -ish next Friday).
  • Ophir Gottlieb: 19.23 - Vol is too cheap for a number of names and buying one-two day straddles is printing money. This is one of the best trading environments for vol in 5 years.
  • MRTOPTICK: 19.87
  • Neil Wales: 18.1 - .7
  • ConTango: 15.09
  • Andrew Giovinazzi: 15.91
  • David Lincoln: 16.50
  • Jim Carroll: I'll take 14.90 cuz bears will take a break before they try again...Just wanted to take the under! Come at me!!!!!!
  • Matt Thompson, CFA: 18.71056
  • Cmcapone: Kind of late, but for the 11/30 prognostication contest, put me down for 18.80.

This week:

  • Mark L. - 17.15
  • Mark S. - 16.35

 

Options Insider Radio Interviews: Are You Ready to Trade Tokens?

Dec 3, 2018

In this episode, Mark is joined by Thomas McInerney, Chief Product Officer at Open Finance Network.

They discuss:

  • Focusing on a subset of tokenized securities
  • Tokenizing illiquid securities
  • Blockchain transfer of tokens
  • What is Open Finance?
  • Who are early users of the platform?
  • What else do they offer?
  • Getting liquidity providers on board
  • Regulatory worries
  • And more...

 


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 12pm Central


Thursday:

Option Block LIVE at 12pm Central
This Week in Futures Options LIVE at 1:30 Central


Friday:

Volatility Views LIVE at 12pm Central


As always, you can join in the fun at http://mixlr.com/options-insider/


Stats from Last Week

  • VIX Cash Range: 16.36 - 25.79

  • S&P Cash Range: 2624.09 - 2791.04

  • SPX 30-Day Implied Volatility: 20.57

  • SPX 30-Day Realized Volatility:  22.13

  • SPX Risk Premium (30-Day Implied - Realized): -1.56

  • Market Risk Premium (VIX Cash - SPX 30-day Implied Volatility): 2.66


 

Strategy 101: Brought to you by Ally Invest

Options Playbook Radio 203: Short-Term UNH Butterfly

Posted April 5th, 2018

We are back in the saddle discussing options strategies. As we are a few days away from earnings, let's look at something that is not driven by earnings. While we're waiting for volatility to slow down, let's look at a short-term butterfly in UNH. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, or on the Amazon Kindle edition. Specifically:

  • UNH announces earnings on 4/16
  • Doing a very short-term butterfly to not contain earnings
  • What are we hoping to happen?
  • What is the implied volatility?
  • Selecting strikes
  • Setting up the trade
  • What is the maximum risk? Reward?
  • What about time decay?

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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