Your Inside Source for Options Information

September 4, 2018

Today's newsletter is sponsored by Fidelity

Options volume up 12% year-over year

This morning, OCC announced that overall exchange-listed options volume reached 426,237,903 contracts in August, up 12 percent from August 2017. Equity options volume reached a total of 384,002,068 contracts, a 17 percent increase from August 2017. This includes cleared ETF options volume of 145,281,116 contracts last month, a five percent decrease compared to August 2017 volume of 153,638,751 contracts. Index options volume was down 18 percent with 42,235,835 contracts in August, but year-to-date average daily volume was up 12 percent from August 2017.

Here are the market share statistics (Source: OCC)

 

Upcoming Economic Reports

A preview of what may move the market this week

 

Options Insider Radio Network 

Episodes you may have missed from Options Insider Radio last week 

Best of Volatility Views 269: One More VXX Reverse Split

Posted August 31st, 2018

This episode was originally posted on August 28th, 2017.

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

• VIX Cash - 12.33, a high of 14.45 on Monday.
• VVIX - 100
• CBOE Skew Index - 130

Russell's Weekly Rundown

• VIX Options: ADV - 764k, VIX Call/Put - 3.4, Total 11.5m (8.88m Calls, 2.66m Puts)
• VXX reverse split trade

Volatility Voicemail: Listener questions and comments

• Comment from JLC - That $VIX 60 guy is just nuts. He's just trying to make a name for himself with that prediction. $SPX wld need to drop over 10% to be right.
• Question from FContangotrader - What is your thought on $VIXH? Maybe every episode you can give an intro into various Vol ETN and ETF. Thanks and keep with good work
• Comment from FContangotrader - Mark Sebastian, so how do you hedge your gamma and your mother in law?

Crystal Ball: Wild and reckless prognostication Last week

• Mark L. - 13.55
• Mark S. - 12
• Kevin - 18.25
• Guest - 14.30

This week

• Mark L. - 11.75
• Mark S. - 11.00
• Russell - 10.80

 

Options Playbook Radio 233: SPX Long Call Spread into the Holiday Weekend

Posted August 30th, 2018

Now that earnings season is over, it's time to get back to the basics. You can find more in The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

• A review of last week
• What happened if you stuck around to the close on Friday?
• How did we do?
• Markets are closed for Labor Day
• How do we take the holiday into account?
• Where is the S&P 500 right now?
• Selecting strikes and expiration
• What do we want to happen?
• What if it starts to go south?
• How to turn this into a butterfly
• 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.

 

Best of Option Block 648: Everyone Loves Cheap Lottery Tickets

Posted August 30th, 2018

This episode was originally posted on August 29th, 2017

Trading Block: A quiet day in the market. Odd Block: Ratio put spread in Expedia Inc. (EXPE), ratio risk reversal in Dollar General Corp. (DG), and put-palooza in Pure Storage Inc. (PSTG). Mail Block: Options Question of the Week Look at #MayweatherMcGregor as #Options traders. @TheNotoriousMMA calls cost $1, pay $3. #Floyd calls cost $4, pay $1. Your trade?

• 30% - Buy #Connor Calls?
• 32% - Buy #Floyd Calls?
• 16% - I'd rather sell premium
• 22 - Whoever Wins We Love

Listener questions:

• Question from Allan8 - Did Mark cash any calls on Floyd?
• Question from LAXX - Is it me or do the Vegas odds makers do a very similar job to options market makers?

Another Options Question of the Week: Let's get cheap! If you had to buy "lottery ticket" December calls for $.05 in one name - which would you choose? #HomeRun

• AMZN
• AAPL
• Tesla
• VIX

MORE listener questions:

• Comment from The_Quantum_Revloution - Which options are trading at $0.05 though that's the question?
• Comment from Randy Wright - AAPL, and I just might join you.
• Question from NTT - Can you clarify the question from last show. Was that SPX put-call spread guy asking about selling OTM calls vs. OTM puts or same strike?
• Comment from Dennis Lyrintzis - Wow over 15,000 Jan 55 calls bought for AAL. Thanks for the Alert.
• Question from ReallyG? - Love your #podcasts! Question: market profile displays limit orders. Is there a service that displays stop orders? Just wondering
• Question from KBX32: What is the cheapest way to hedge my portfolio w options?

Around the Block: Upcoming Earnings LULU (8/31)

 

Best of This Week in Futures Options 66: Hurricane for Crude

Posted August 30th, 2018

This episode was originally posted on August 28th, 2017

Topics this week include:

• S&P and other indexes
• Silver and Gold
• Crude Oil
• Winners: Copper, Soybean oil
• Losers: Lean hogs, corn

Futures Options Feedback: Listener questions and comments

• Question from Sho Odwa -Hi! Which website publishes real-time commodity options quotes
• Comment from Allan -I would have thought KC Wheat would be the winner?
• Question from NN0M -Why did Tosaw put on a two year collar in silver? Why that time frame?
• Question from ReallyG -Love your #podcasts! Question: market profile displays limit orders. Is there a service that displays stop orders? Just wondering
• Question from TheBiggers: Calls are typically more bid in futures options than equity options. So does it stand that collars are more effective in futures options?

 

Options Insider Radio Special Events: The Future of Crypto Derivatives

Posted August 30th, 2018

Mark recently participated in the Voice of Blockchain Conference to talk about crypto derivatives. Panelists included:

• Tony Saliba, CEO at Matrix Holding Group and Mercury Digital Assets
• Matt Amberson, Owner, Options Research & Technology Services
• Julie Winkler, CME Group Chief Commercial Officer

 

Volatility Views 319: Talking VIX, VXX, VOLI and NVDA Volatility

Posted August 27th, 2018

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

• VIX Cash - 12, down one point from last week.
• VVIX - 93, ten handles lower than last week.
• VIX OPTIONS - ADV: 462k, VIX call/put: 3.3/1, Total 6.31m (4.83m Calls, 1.48m Puts)
• Return of the 1x2?
• VXX - 28.65, one and a half points lower than last week.
• Earnings Volatility: NVDA - ATM straddle: $16.50, approx. 6%
• VIX lawsuit press release - Kessler Topaz chosen as co-lead counsel overseeing national antitrust case alleging manipulation of CBOE's Volatility Index

Volatility Voicemail: Options question of the week

We're talking about crypto derivatives at the @BlockchainVoice Conference. So this week we want to know which crypto product you'd like to see listed on a major venue next?

• Bitcoin Options
• Ripple Options/Futures
• Ether Options/Futures
• Litecoin Options/Futures

Listener questions and comments

• Comment from Vixologist: VolTwits should listen to @ScottNations on latest installment of Volatility Views from @Options https://tinyurl.com/yb9uebww Scott talks about the alt volatility measures he has developed.
• Comment from Middling Radical: I have his thinkorswim indices up but confess I find the VIX complex and certain ratios just as helpful.
• Comment from FearMerchant: I have them on my screen and I was tracking a ratio of VIX/VOLI for a while to see when they diverge/converge. It proved to be of little value.
• Comment from David Lincoln : They have some good people on that show....... ;)
• Comment from FContangotrader: VIX at 12.28 and the market at ATH says everyone are hedged with puts SPX,VVIX over 100 says lot of VIX calls buying as a hedge also, market will break to the upside.
• Comment from Nathan L.: All these people buying VIX puts have me confused. How low can this vol bear trend really get - maybe 9? So the downside is quite limited. I definitely prefer bull call spreads in this environment with potentially selling OTM puts as a financing tool.

Crystal BallL Your prognostication headquarters

Last week:

• Mark L.: 12.25
• Mark S.: 11.95

Next week:

• Mark L.: 11.55
• Mark S.: 11.95

 

Best of Option Block 614: Unleash the Liberator Puts

Posted August 27th, 2018

This episode was originally posted on April 25th, 2017

Trading Block: Earnings today

• Alcoa: $33, ATM Straddle $2 - approx. 6%
• Chipotle: ATM Straddle $25.25, approx. 5.4%
• VIX 'fear' gauge plummets as French election results spark global relief rally.

Odd Block: Calls and puts trade in GGP Inc. (GGP), puts trade in Exelon Corp. (EXC) and calls trade in MGM Resorts Intl. (MGM). Mail Block: Question of the Week: Earnings Season is upon us. Big names are reporting soon. Which is your pick for the largest % move post-earnings?

• $AMZN
• $GOOGL
• $CMG
• $MSFT

Listener questions and comments:

• Follow-up comments from GameDay Dog:

You nailed it. I was assigned on 2 of the options. I knew that, but the (-) in my margin account was "alarming". My main thought was losing more than my spread safety net. The math did not make sense immediately. Glad to ask a question that made others ask questions. My bad...just heard episode 608...Yeah, I got assigned 2 of 3 my put spread. Way too early! I will get into better detail next time. Episode 208 had an excellent answer. That big negative number was stupid scary! I closed all the positions & sold the stock. The 1 short put & 3 long puts made it a back ratio spread when I closed it. It's funny now! PS - thanks for managing to get my questions on air. Once I closed the positions, I was able to sleep that night!!! Feels like I lost more than $300 though. By getting assigned the shares, it felt like I had more at risk and loss was influenced by the price of the underlying instead of the option. If that makes sense. Seeing the large margin number was not pleasant. My credit spread had a 30% chance of being ITM when I sold it too! Hahaha.

• Question from Lesnod -How do you get out of the straddles? One side of a straddle is always a loss correct?

Around the Block/This Week in the Market

• Apr 25: New Home Sales, Consumer Confidence
• Apr 27: Jobless Claims, International Trade, Pending Home Sales
• Apr 28: GDP, Consumer Sentiment

 

OICs Wide World of Options 52: Gamma Scalping

Posted August 27th, 2018

Curious about what Gamma Scalping is and how you can use it as a part of your investment strategy? Host Joe Burgoyne has you covered as he welcomes Stan Freifeld of McMillan Analysis Corp who will discuss its trading methodologies. Also, Michael Thomsett, a prolific author of several options-related books, joins Joe for Profiles & Perspectives.

 

Advisors Option 70: Exploring the Dark World of Reverse Calendars

Posted August 27th, 2018

Options 101: A review of the fundamentals

• Short Calendars
• What is it and why use it?
• Any other thoughts on the short calendar?

The Buzz: What do informed advisors need to know?

• The Dow just registered its longest stint in correction territory in nearly 60 years- failing to move 10% above the closing low hit earlier in the year.
• The majority of fund managers expect the next recession to begin in the second half of next year or the first half of 2020.
• Exchange-listed options mean opportunity for pensions and endowments.
• Best& Worst BDs for Advisors: J.D. Power ? 2018
• Average satisfaction score - 726, up from 719 a year ago, on a scale of 1 to 1,000.

Office Hours: Options question of the week

We're talking about #Crypto #Derivatives at the @BlockchainVoiceConference. So this week we want to know which #Crypto product you'd like to see listed on a major venue next.

• 68% - Bitcoin options
• 8% - Ripple Options/Futures
• 18% - Ether Options/Futures
• 6% - Litecoin options/Futures

Listener questions and comments: What's on your mind?

• Question from Allen T. - Does it count as a calendar if it's on two different underlyings? Or is that more of a pairs trade?
• Question from Gall - How many options are actually traded by RIAs?
• Question from D Riley:I have a general question because I'm struggling with hedges. Do most people buy calls or put options as hedges? Do they hedge in, at or out of the money?

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/