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. 30
8:30 AM Personal income Sept. 0.40% 0.20%
8:30 AM Consumer spending Sept. 0.90% 0.10%
8:30 AM Core inflation Sept. 0.10% 0.10%
TUESDAY, OCT. 31
8:30 AM Employment cost index Q3 0.70% 0.50%
9:00 AM Case-Shiller home prices Aug. -- 0.30%
9:45 AM Chicago PMI Oct. -- 65.2
10:00 AM Consumer confidence index Oct. 121 119.8
WEDNESDAY, NOV. 1
8:15 AM ADP employment Oct. -- 135,000
9:45 AM Markit manufacturing PMI Oct. -- 54.5
10:00 AM ISM manufacturing index Oct. 59.30% 60.8
10:00 AM Construction spending Sept. 0.10% 0.50%
2:00 PM FOMC announcement   1-1.25% 1-1.25%
Varies Motor vehicle sales Oct. 17.5mln 18.6 mln
THURSDAY, NOV. 2
8:30 AM Weekly jobless claims 28-Oct -- 233,000
8:30 AM Productivity Q3 2.90% 1.50%
8:30 AM Unit labor costs Q3 0.60% 0.20%
FRIDAY, NOV. 3
8:30 AM Nonfarm payrolls Oct. 310,000 -33,000
8:30 AM Unemployment rate Oct. 4.20% 4.20%
8:30 AM Average hourly earnings Oct. -- 0.50%
8:30 AM Trade deficit Sept. -$43.5bln -$42.4bln
10:00 AM ISM nonmanufacturing index Oct. 58.90% 59.80%
10:00 AM Factory orders Sept. 1.30% 1.20%

 


 

How to Webinar: Trading Options on Stocks and Futures 

Spend an afternoon with "Uncle" Mike Tosaw


You know him from the Option Block, and now you have a chance to learn from the man himself. Join Option Block all-star, financial advisor, author, and former NFL player, Mike Tosaw, as he shares his knowledge of stocks options, followed by Joe Natoli, a hedge fund manager focused on delivering returns via options on stock index futures markets.

Avoid the Pitfalls of Options Trading: Wednesday, November 8th, 12:00 CST / 1:00 EST 

 

Whether you're a beginner Options trader or a seasoned pro, the vagaries of options pricing can often wreak havoc on your strategy if you're not prepared. RCM Alternatives is bringing together two pros: one a 15 year pro in stock options; the other a long time trader in the related, but different, options market on stock index futures.

In this webinar, they will start with the basics and quickly move to explain the pitfalls many options traders fall into, as well as both of their perspectives of Options trading in the current market environment. 

Register today for this free webinar.



 

Options Insider Radio Network 

Episodes you may have missed from Options Insider Radio last week

 

Option Block 663: Earnings Palooza: AMZN, TWTR, GOOGL and More

Posted October 27th, 2017

Trading Block: Earnings!

  • Chipotle (CMG) - ATM straddle: $20, approx. 6.25%
  • Twitter (TWTR) - ATM straddle: $1.50, nearly 9%
  • Amazon (AMZN) - ATM straddle: $39, approx. 4%
  • Google (GOOGL) - ATM straddle: $41, approx. 4%
  • Microsoft (MSFT) - ATM straddle: $1.75, approx. 2.2%

Odd Block: Review from 8/7: Call frenzy in Procter & Gamble (PG)

Strategy Block: Uncle Mike Tosaw discusses SPY and risk reversals.

Mail Block: Listener questions and comments

  • Question from Hawkeye - To ye merry band of Magical Voice, grease laden Meatballs, favorite Uncles, and Lobsters with Tubs of butter: I already get that SVXY, XIV, and other short ETF/ETNs can go bust overnight due to the front 2 futures doubling. What would happen if I held long SVXY puts in an IRA and the fund had to close because the SHTF? How would I exercise them if the fund doesn't trade? I can't cover due to underlying frozen, but I can't exercise without covering because that would put me short in an IRA? Or would they still allow it as an exception? How would it all unwind? Thanks for all you guys keeping me learning, laughing, and most of all, thinking.

Around the Block: Reviewing what's happening post-earnings. Earnings. Earnings. Earnings. Is North Korea testing hydrogen bombs? After-hours options trading would have been fun this week.


Options Insider Radio Interviews. Talking Regs, Data Privacy and Crypto Tax with RSM

Posted October 26th, 2017

In this episode, Mark is joined by Matt Gill, Director of Risk Advisory Services at RSM US LLP.

They discuss:

  • What is RSM?
  • How to deal with the fluid regulatory environment
  • Dodd-Frank
  • Data privacy
  • Cyber security
  • A global view on data privacy regulation
  • Choice Act/Volcker Rule
  • System safeguards and regulator
  • Crypto currency from an accounting point-of-view
  • Today's Bitcoin event
  • And more...


Options Playbook Radio 181: AMZN Skip Strike Butterfly into Earnings

Posted October 26th, 2017

This is probably the biggest week of earnings reporting, when the most valuable stocks report. There are things to take into account because of earnings:

  • Remember that implied volatilities rise around earnings
  • Why a skip strike butterfly?
  • Setting up the trade to pay for itself
  • Where is AMZN trading right now?
  • What is the long straddle aka the expected move
  • Using the long straddle to select strikes
  • Earnings-related risks
  • What is the expected move?
  • Setting up the trade
  • What is the upside? Downside?
  • Nuances of options pricing
  • Remember time premium


Options Insider Radio Interviews: Crowd Sourcing Algos with QuantConnect

Posted October 25th, 2017

In this episode, Mark is joined by Jared Broad, Founder and CEO of QuantConnect.

They discuss:

  • The genesis of QuantConnect
  • What is QuantConnect?
  • Fast-tracking people's development
  • Making data more accessible
  • The challenge of the crypto market
  • What kinds of algos are coming up for Bitcoin?
  • What is the Broadcast tab?
  • And more


Options Insider Radio Interviews: Talking Real-Time Margin with Hanweck

Posted October 25th, 2017

In this episode, Mark is joined by Tom Watson, Head of Sales at Hanweck.

They discuss:

  • What is Hanweck's enhanced data feed?
  • Going beyond implied vols and Greeks
  • Real-time margin functionality
  • The benefits of outsourcing
  • Parallell processing capabilities
  • Working with The OCC
  • The fluid regulatory environment
  • Filling a void in broker capacity
  • And more


Option Block 662: The Great After Hours Debate Continues

Posted October 24th, 2017

Trading Block: Earnings!

  • Tuesday - McDonalds, GM, Chipotle, AT&T. Chipotle Mexican Grill (CMG), ATM straddle - $20, approx. 6.25%
  • Wednesday - VISA
  • Thursday - Twitter, Amazon, Google, Microsoft
  • Friday - ExxonMobil, Merck

Odd Block: Calls trade in Fortuna Silver Mines Inc. (FSM). Combo/straddle trade in iShares MSCI Japan ETF (EWJ). Size buy/write in West Fraser Timber Co. Ltd. (WFT)

Mail Block: Options question of the week

It looks like you all REALLY want after-hours #Options trading. The question now - what is the best way to make it happen?

  • Pilot For Earnings Season
  • Top Names Only -$AMZN, etc.
  • Basic Limit Order Book
  • Other

Listener Questions and Comments: What's on your mind?

  • Question from John Hopkins - Hi I was inquiring if Al Sherbin's spreadsheets from his book, how to price and trade options is still available, it is not on the Wiley website anymore. And I cannot get it from my O'Reilly subscription service either. I have developed my own Kelly spreadsheet, but I would like an experts to see if I am right, mine works ok, it has increased my winning trades greatly. Thanks I realize this is not part of your usual discussion, many apologies.

Around the Block: What are we looking at for the rest of the week? Earnings!


Volatility Views 277: The Birth of Modern Volatility Skew

Posted October 23rd, 2017

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

Black Monday. Happy 30th Birthday to Volatility Skew!

The numbers:

  • VIX - 93.33
  • CBOE Skew Index - 146
  • VXN - 14.64

Russell's Weekly Rundown:

  • VIX ADV - 876k
  • VIX call/put - 4.1
  • VXX - 34.39
  • XIV - 105.87

Volatility Voicemail: Options question of the week

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

  • 27% - Tesla - $TSLA
  • 34% - Amazon - $AMZN
  • 23% - Apple - $AAPL
  • 16% - Alphabet - $GOOGL

Listener questions and comments:

Comment form MoneyEngine X3.5 - Buying CVS calls.

  • Crystal Ball: Wild and reckless prognostication

Last week:

  • Mark L. - 9.55
  • Mark S. - 10.25
  • Ghost of Russell - 28
  • Kevin - 10

This week:

  • Mark L. - 9.65
  • Mark S. - 10.16
  • Russell - 9.87

 

This Week in Futures Options 74: Copper Records and Natural Gas Surprises

Posted October 23rd, 2017

Today in the CME hot seat is Derek Sammann, CME Group Global Head of Commodities and Options Products.

Topics this week include:

  • Looking back on "Black Monday"
  • Crude Oil/WTI
  • Gold/Metals
  • Winner this week: Lean Hogs

Futures Options Feedback: Listeners have their say

  • Comment form T6BTL -Big on Fed watch. Any other cool tech coming to the site?

Options question of the week: Do you think #Options should be traded after-hours like stock?

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


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: 9.74 - 13.20
  • S&P Cash Range: 2544.00 - 2582.98
  • SPX 30-Day Implied Volatility: 6.88
  • SPX 10-Day Realized Volatility: 5.92
  • SPX 30-Day Realized Volatility:  4.40
  • SPX Risk Premium (30-Day Implied - Realized): 2.28
  • Market Risk Premium (VIX Cash - SPX 30-day Implied Volatility): 2.92


 

Strategy 101: Brought to you by Ally Invest

Options Playbook Radio 157: FB Iron Condor into Earnings

Posted May 4th, 2017

Last week we looked at an inverse, skip-strike butterfly on AAPL before earnings (page 112). Today, we will explore a FB iron condor (page 126). This is always available on OptionsPlaybook.com, or on the Amazon Kindle edition.

In this episode, Brian covers:

  • A review of last week
  • What are the benefits and risks of the skip-strike butterfly?
  • What has happened since we put the trade on?
  • What should you have done?
  • What is going on with FB?
  • Setting up the trade
  • What is the expected move after earnings?
  • Selecting the expiration
  • Selecting the strikes
  • What is the maximum risk? Reward?
  • What is the ideal 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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