Your Inside Source for Options Information

October 16, 2017



Register Today for Your Chance to Discover Scientific Options Trading

Free Options Trading Webinar this Wednesday

Join us for this special training:

  • How to Know When an Option Strategy is Doomed to Fail
  • How to Match the Right Option Strategy to the Right Stock
  • How to Exploit Pre-Earnings Momentum in Tech Stocks
  • How to Turn a Losing Strategy into a Potential 65% Gain with a Mouse Click
  • Why you Don't Need Luck with 11 to 1 Winners and a 286% Return
  • How a Little-Known 'Long/Short' Straddle Could Generate 207%
  • A Simple Way to Exclude Losing Strategies from Your Trading Plan

The results are simply staggering and a reminder that there's a lot less luck to successful option trading than many people realize.

Want an example?  Trading Pre-earnings Momentum in Microsoft

Join Capital Markets Labs on Wednesday, October 18 at 4:00 PST for this powerful webinar.

Register today.

 


Upcoming Economic Reports


A preview of what may move the market this week

TIME (ET) REPORT PERIOD PREVIOUS
MONDAY, OCT. 16
8:30 AM Empire state index Oct. 24.4
TUESDAY, OCT. 17
8:30 AM Import price index Sept. 0.60%
9:15 AM Industrial production Sept. -0.90%
9:15 AM Capacity utlilization Sept. 76.10%
10:00 AM Home builders' index Oct. 64
WEDNESDAY, OCT. 18
8:30 AM Housing starts Sept. 1.180mln
8:30 AM Building permits Sept. 1.272mln
2:00 PM Beige book    
THURSDAY, OCT. 19
8:30 AM Weekly jobless claims 14-Oct  
8:30 AM Philly Fed Oct. 23.8
10:00 AM Leading economic indicators Sept. 0.40%
FRIDAY, OCT. 20
10:00 AM Existing home sales Sept. 5.35mln

 


 

Options Insider Radio Network 

Episodes you may have missed from Options Insider Radio last week

Option Block 659: The Dark Side of Vertical Spreads

Posted October 13th, 2017

Trading Block: Roku hit the trading floor. We present some stats from the first week.

  • ADV: 4413 contracts
  • OI: 12,800 contracts, puts slightly outnumber calls 1.2/1.

Plus, the craziest gold trade of the year.

Odd Block: Size put roll in iShares S&P 500 Index Fund (XSP), funky prints in Applied Materials, Inc. (AMAT) and combo Swap/Roll in Edwards Lifesciences Corp (EWW).

Strategy Block: Uncle Mike Tosaw discusses managing vertical spreads.

Mail Block: Options question of the week

EarningsSeasons 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

Around the Block: Everything macro and the lack of reactions to everything macro. VIX futures. Earnings are coming up. AI rally?


Options Playbook Radio 179: The In-Between Greeks

Posted October 12th, 2017

It's time to tackle listener questions again on Options Playbook Radio. In this episode, Mark and Brian cover:

  • Question from Albert Deckel - First, I want to thank you for all the effort you place into the options playbook. I find your lessons absolutely clear, understandable and instructive....a rare combination!! I bought your book and find that, also, clear and concise and very informative. Two questions: While I understand how to convert a "Delta" into meaning, I really don't understand what consists of a "high" vs. "low" Gamma, Theta or Vega. For example, when is theta so high that it makes the purchase of a contract dubious, or Vega so high that it makes the purchase of an OTM contract desirable? Also, if I were to write an ITM put, what combination of Delta, Gamma, Theta or Vega am I looking for? Thanks so much!! Al
  • Question from Tim - Why isn't it standard or maybe required to let people close out shorts for free below $.10?


Best of Option Block: Does a High Skew Signal the Zombie Apocalypse

Posted October 10th, 2017

Recorded on March 20, 2017, this Best of Option block looks back on when the SKEW index finally popped.

Trading Block: Apple continues to rally. NASDAQ touches fresh intra-day record, but stocks fight for traction. CBOE Skew Index trending higher. It's about time.

Odd Block: Puts trade in GameStop Inc. (GME), call spreads trade in FireEye Inc. (FEYE) and puts trade in Grupo Televisa SAB (TV).

Mail Block: Polls, upsets, questions, and more.

Options #BrokerMadness tournament going on now.

  • Tough battle today in #options #BrokerMadness as @optionsXpress takes on @IBKR, Who will emerge to take on @TradingBlock?
  • @LSFinancial crushing @tradier

Options #QuestionoftheWeek: In #BrokerMadness spirit, let's bring the fight to exchanges. What is your fav? Where do you send your business?

  • CBOE/BATS
  • NYSE/Arca/AMEX
  • NASDAQ/PHLX/ISE
  • Other: BOX,MIAX, etc.

Listener question:

  • Question from JVao - Sell put + buy call = long delta exposure = cheaper than buying the underlying = maximizing skew = why does everyone not do this?

Around the Block: What's coming up this week?

Earnings!

  • Tuesday - Nike, FedEx
  • Thursday- GameStop

This week in the market:

  • Mar 22: Existing Home Sales
  • Mar 23: Jobless Claims, New Home Sales
  • Mar 24: Durable Goods


Volatility Views 275: Fed Data Rebukes Crowded VIX Trade Myth

Posted October 9th, 2017

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

  • VIX Cash - A low of 9.13 on Oct. 5
  • VVIX - 91.79, CBOE Skew Index - 140

Russell's Weekly Rundown

  • Fed Survey on Firm Uses of Equity Volatility, By Russell Rhoads, CFA
  • VIX Options - VIX Call/Put: 3.7, Total 12.0m (9.44m Calls, 2.52m Puts)
  • VXX - 37.95, XIV - 100.57

Volatility Voicemail: Options question of the week

Break out your #VOLATILITY #CRYSTALBALL: $VIX is at new lows. Is an 8 $VIX looming or is this just a blip? Where will $VIX close Friday 10/6

  • Right Here: 9-9.30
  • Lower: < 9
  • Slightly Higher: 9.3-9.60
  • Much Higher: > 9.6

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

  • Question from Gunjan Banerji? - What were the hot $VIX strikes this past week?
  • Question from PBiggers - What strategy will long VIX while minimizing contango?
  • Comment from FContangotrader - I took personal loan and I bought VXX put spreads long term while I'm long some gamma on $SPY, speaking of crazy.
  • Question from Lenz - When is the CBOE Asia conference?
  • Crystal Ball: Wild and reckless prognostication

Last week:

  • Mark L. - 9.7
  • Andrew - 9.99
  • Russell - 9.42

This week:

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


This Week in Futures Options 72: The Craziest Gold Trade of the Year

Posted October 9th, 2017

Topics this week include:

  • Crude hitting an important psychological number
  • Comment from Alan: I'm down for some lean hogs and livestock
  • Hogs, hog skew (gesundheit) and going hog wild
  • Gold, no love for the weeklies, but standard contracts are golden
    • 15,000 Dec 2018 3000-strike calls trade; plus 7,500 each of the 2000 and 2600 strikes.
    • Fat fingers?
    • Doomsday prepper?
    • Mark is rendered speechless

Futures Options Feedback: What is on your mind?

  • Question from GNDLF: Which product has the crazies skew? The juiciest calls, puts, or both?
  • Question from IML: Could the put skew in WTI potentially be due to electric car makers scrambling to hedge their primary risk?
  • Question from Mike T.: Where do I get all this CME research?
  • Question from NN78: If they did list Bitcoin options, how do you think the skew will look?

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: 9.44 - 10.66
  • S&P Cash Range: 2541.60 - 2557.65
  • SPX 30-Day Implied Volatility: 6.47
  • SPX 10-Day Realized Volatility: 3.81
  • SPX 30-Day Realized Volatility:  5.03
  • SPX Risk Premium (30-Day Implied - Realized): 1.44
  • Market Risk Premium (VIX Cash - SPX 30-day Implied Volatility): 3.14


 

Strategy 101: Brought to you by Ally Invest

Options Playbook Radio 155: AMZN Skip-Strike Butterfly

Posted April 20th, 2017

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

In this episode, Brian covers:

  • A review of last week's UAL butterfly
  • Lesson to learn: Don't try to hit a home run with a butterfly
  • Putting on a skip-strike butterfly with calls
  • Picking the expiration
  • Looking at the implied volatility
  • Picking strikes
  • 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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