Your Inside Source for Options Information

October 23, 2017


Upcoming Economic Reports


A preview of what may move the market this week

TIME (ET) REPORT PERIOD FORECAST PREVIOUS
MONDAY, OCT. 23
8:30 AM Chicago Fed national activity Sept. -- -0.31
TUESDAY, OCT. 24
9:45 AM Markit manufacturing PMI (flash) Oct. -- 53.1
9:45 AM Markit services PMI (flash) Oct. -- 55.3
WEDNESDAY, OCT. 25
8:30 AM Durable goods orders Sept. 0.60% 2.00%
8:30 AM Core capex orders Sept. --- 1.10%
10:00 AM New home sales Sept. 558,000 560,000
THURSDAY, OCT. 26
8:30 AM Weekly jobless claims 21-Oct 233,000 222,000 
8:30 AM Advance trade in goods Sept. -$62.5 bln -$62.9bln
10:00 AM Pending home sales Sept. -- -2.60%
FRIDAY, OCT. 27
8:30 AM Gross domestic product Q3 2.70% 3.1% (Q2)
10:00 AM Consumer sentiment Oct. 101.1 101.1

 


 

Options Insider Radio Network 

Episodes you may have missed from Options Insider Radio last week


Options Insider Radio Interviews: Talking Tech, Trading, and More with TradeStation

Posted October 20th, 2017

In this episode, Mark is joined by Nick LeMaina, Senior Vice President of Strategic Brokerage Services at TradeStation.

They discuss:

  • Who are the customers of TradeStation's Strategic Brokerage Services?
  • What asset classes are their primary focus?
  • How do their customers use options?
  • What are the most popular tools on the TradeStation platform?
  • The evolution of back-testing tools
  • Commissions and fees
  • What is TradeStation doing on the idea generation front?
  • Optimizing the mobile experience
  • Overnight trading


Option Block 661: Unhappy Anniversary

Posted October 20th, 2017

Trading Block: Black Monday 30th Anniversary, October 19, 1987.

Earnings:

  • GE
  • Honeywell
  • P&G
  • SunTrust

Odd Block: Massive closing paper in Norfolk Southern Corp. (NSC), and review from 8/17 - Rolling winning puts in WisdomTree India Earnings Fund (EPI).

Strategy Block: Uncle Mike Tosaw discusses hedging stock

Mail Block: Options question of the week

Earnings Season is here! Which name do you plan to trade most actively this cycle?

  • 31% - Tesla, $TSLA
  • 41% - Amazon, $AMZN
  • 17% - Apple, $AAPL
  • 11% - Alphabet, $GOOGL

Options question of the week, volume two:

Do you think #Options should be traded after-hours like stock?

  • 71% - Yes!
  • 25% - No!
  • 4% - Don't Care!

Listener Questions and Comments: What is on your mind?

  • Question from Darqane - Assigned on short SPX puts means getting long the underlying? But how does that work if it's cash settled?
  • Question from ButcherBoyz - What options trading strategy would you say is best suited to people with absolutely zero knowledge of options? Thanks.
  • Question from Axel D. - Why does open interest only update once a day?

Around the Block: Earnings, earnings, earnings.


Options Insider Radio Interviews: Predicting Bitcoin with Level Trading Field

Posted October 19th, 2017

In this episode Mark is joined by Lanre Sarumi, Founder and CEO of Riskbone LLC.

They discuss:

  • What is Riskbone RMS?
  • What was the genesis of the product?
  • What does it do?
  • What are the primary products that CTAs are using on the platform?
  • What is Level Trading Field?
  • Research in the crypto market
  • What would volatility skew look like on Bitcoin options if they were listed today?
  • Will there be a crypto futures exchange in the future?

 

Options Playbook Radio 180: Huddling Up on Low VIX, Naked Puts and More

Posted October 19th, 2017

Mark and Brian are back to answer listener questions.

  • Question from Ejh4isu - Let's say you're short naked a bunch of puts and the trade goes against you, and you don't have the money to pony up? What can your broker do?
  • Question from LCB - This is a challenging time to sell options due to low volatility. So does it stand that the opposite is true? Is it a good time to buy options? Particularly protective puts?
  • Question from Andrew Lane - I tried searching for options on the major advisor news sources including Pensions & Investments and Financial Advisors magazine and came up blank. Why do these mainstream outlets ignore this space? Where should I go to learn more about options for advisors?


Options Bootcamp 67: Getting Back to Basics

Posted October 18th, 2017

Your hosts for this episode are:

  • Mark Longo, Founder, Options Insider Media Group
  • Andrew Giovinazzi, Chief Education Officer, Option Pit
  • Jill Malandrino, Global Markets Reporter, Nasdaq

Introduction Segment: What are Nasdaq's options education initiatives? Why are options and options education so important to Nasdaq going forward? Creating content for RIAs.

Options 101: Going back to the Basics

Basic Options Primer

  • What are options?
  • Basic options terms
  • Why trade options instead of stocks?
  • What are the Greeks?
  • Why should traders care about volatility?
  • Buying options versus selling options
  • Start with paper trading
  • Know where you are going to get out before you get in

 

OICs Wide World of Options 41: Strategies for Earnings Announcements and Trading Tools

Posted October 18th, 2017

Roma Colwell-Steinke of CBOEs Options Institute joins Joe Burgoyne in a conversation about strategy considerations for earnings announcements and then Karen Sood of CBOE Vest discusses how trading tools and technology can impact investment decisions.

 

Option Block 660: NFLX Kicks off Earnings Season

Posted October 17th, 2017

Trading Block: Earnings!

  • Netflix, ATM straddle - $15.30, approx. 7.5%
  • Tuesday - IBM
  • Wednesday -Alcoa
  • Thursday - Verizon, PayPal, E*TRADE
  • Friday - Honeywell, P&G

Odd Block: Size upside love in Comcast Corp. (CMCSA), size roll in Alerian MLP (AMLP) and funky ratio vertical/stupid in Himax Technologies, Inc. (HIMX).

Mail Block: Options question of the week

Earnings Season is almost upon us! What's your favorite way to trade earnings using #Options?

  • Sell Strad./Fly/Condor
  • Buy Strad./Fly/Condor
  • Sell Puts/Put Spreads
  • Buy Calls/ Call Spreads

Listener questions and comments:

  • Comment from PeterPan @pierhk - ATM straddle...Buy with ATR>2
  • Comment from Trader J Rae @traderjrae -Usually a collar or protective put. Everything else held over earnings is a gamble, not a trade.

Another options question of the week:

Earnings Season is here! Which name do you plan to trade most actively this cycle?

  • Tesla - $TSLA
  • Amazon - $AMZN
  • Apple - $AAPL
  • Alphabet - $GOOGL
  • Comment from Trade With Bulls LLC - $INTC

Still more questions:

  • Question from McGillIMontreal: Had a question regarding $GIL and two large 3K 30 strike puts on 10/9 with earnings 11/2. Can you guys explain any rationale around that?
  • Question from Ascentaa - What can happen to the current options being held of KITE which is acquired by GILD and is being delisted

Around the Block: GS tomorrow before the bell, ATM straddle - $6.10, approx. 2.5%.

 

Volatility Views 276: Crazy VXX Puts and VIX Put Spreads

Posted October 16th, 2017

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

Secrets to the Hottest Trade - Shorting VIX

the Numbers:

  • VIX - Hit a low of 9.13 on Oct. 5 - still flirting with single digits.
  • VVIX - 97.79, CBOE Skew Index - 146, VXN - 14.33

Kevin's Weekly Rundown

  • VIX Options: ADV - 868k, VIX Call/Put: 3.8
  • Total 13.4m (10.6m Calls, 2.77m Puts)
  • VXX - 35.97, XIV - 105.87, UVXY - 17.36

Volatility Voicemail: Options question of the week

Earnings Season is almost upon us! What's your favorite way to trade earnings using #Options? Reply/DM/email with others.

  • Sell Strad./Fly/Condor
  • Buy Strad./Fly/Condor
  • Sell Puts/Put Spreads
  • Buy Calls/ Call Spreads

Crystal Ball: Your VIX prognostication headquarters

Last week:

  • Mark L. - 9.65
  • Mark S. - 10.01
  • Russell - 10.31

This week:

  • Mark L. - 9.55
  • Mark S. - 10.25
  • Kevin - 10.00

 

This Week in Futures Options 73: More Crazy Gold Fun, Plus Collar Questions

Posted October 16th, 2017

Topics this week include:

  • Gold
  • Crude Oil
  • Winners: Nat Gas, Palladium
  • Losers: Class 3 Milk, Wheat

Futures Options Feedback: Listeners tell us what's on their minds

  • Question from TMD4817: Which is a better timeframe for maxing a 1-3 day "swing" trade with options: wkly expire vs out 1 month vs out 2-3 month
  • Question from Patrick Rooney: Do you use futures in your strategies? For hedging perhaps? If so, which? $ES_F? $VX_F? Other?
  • Question from OpeningBellCo: Which English soccer team do you support? $MANU or not?
  • Question from GGLee: Buying collars means buying skew and paying up. So does it stand that the best spy trade is selling skew by selling 25 delta puts and buying 25 delta calls? Maybe add a cheap hedge with 5 or 10 delta put in case worst comes to pass? Right now I can sell the SPY Oct 25D put for $.55, buy the Oct 25D call for $.55 and then buy put hedge for about $.20 net outlay. Thoughts?

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: 9.29 - 11.10
  • S&P Cash Range: 2547.92 - 2575.44
  • SPX 30-Day Implied Volatility: 6.77
  • SPX 10-Day Realized Volatility: 3.15
  • SPX 30-Day Realized Volatility:  4.32
  • SPX Risk Premium (30-Day Implied - Realized): 2.45
  • Market Risk Premium (VIX Cash - SPX 30-day Implied Volatility): 3.20


 

Strategy 101: Brought to you by Ally Invest

Options Playbook Radio 156: AAPL Inverse Skip-Strike Butterfly

Posted April 27th, 2017

It's earnings season again. As such, we're looking at an inverse skip-strike butterfly to capture some earnings move. You can find skip-strike butterflies with calls on page 108, and inverse skip-strike butterflies with calls on page 112 of The Options Playbook, on OptionsPlaybook.com, or on the Amazon Kindle edition.

In this episode, Brian covers:

  • A review of last week's AMZN butterfly
  • Lesson to learn: Time makes the trade cheaper
  • Determining strike prices
  • Making sure you do not get blown out
  • Looking at the implied volatility
  • How to use time premium
  • What is the net credit?
  • What is the maximum risk?

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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