Your Inside Source for Options Information

January 2, 2018

Happy New Year

Featured Interview

Options Insider Radio Interviews: Revenge of the Trading Pits

Posted April 21st, 2017

In this episode, Mark is joined by Kevin Kennedy, Senior Vice President and Head of U.S. Options at Nasdaq.

They discuss:

• Everything old is new again: new PHLX trading floor opens

• Why update a physical trading floor?

• Fifteen legs!

• Smaller footprint, larger impact

• Happy 227th anniversary!

• What products are available?

• What has the response been from the industry?

• Strong marketshare on the PHLX

• What's next for Nasdaq?

• Is six exchanges enough for Nasdaq?

• Education outreach efforts

• Is there a visitor’s gallery for the new floor?

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

Option Block 680: 2017 Year-End Palooza - All Smoke, No Fire

Posted December 29th, 2017

Trading Block: Review of the last trading day of the year. VIX barely holding on to double digits. Big meh into the end of the year. Silver is on a tear. The highs and lows of Bitcoin. Cboe announces six Bitcoin ETFs. Uncle Mike creates a new product...Fitcoin.

2017 Year-in Review: The good, the bad, and the inexplicable.

Final Options Question of the Week for 2017: What is your enduring market memory/event/trend/etc of 2017? Have a suggestion of your own? We encourage you to choose "Other" and send in your thoughts.

• Death of Volatility/VIX

• Rise of Bitcoin

• The Unstoppable Bull

• Other: Reply/DM w/ ideasUncle Mike's silver collar was not, in fact, the second coming of AAPL.

  • Comment from OptionsAlliance: The surprise resurgence of #options volume in 2017.
  • Comment from OliveWanaBroker: The oats bull market. Very important.

• All smoke, no fire

• Crypto fever

Odd Block: Crazy paper from the year

• TSLA options tracker: The explosion of interest in TSLA catastrophe puts. OI exploded in 2017. Interest also expanded to Jan 2020 50 puts.

• The 250,000 contract VIX three-way, rolled thrice

• Extended Stay America - giving up the ghost

• The way-out-of-the-money gold trade with a further out-of-the-money kicker.

Strategy Block: Uncle Mike waxes poetic about his trading strategy from 2017

Around the Block: Will the outlier trends continue? Andrew brings us down with debt talk. What would it take for volatility to return to normal?

 

Options Playbook Radio 189: Bitcoin, Dividends and Exercising Worthless Calls

Posted December 28th, 2017

Mark and Brian are back to answer listener questions. In particular:

• Question from Taj Penaso - Hi, will there be options for bitcoin once the futures are traded?? Or just the futures until there are tradeable ETFs available? Thanks.

• #Options #QOTW - Now it's a party! #Bitcoin futures are live on both @CMEGroup & @CBOE. But everyone's asking us the $1M question - "When will we get #Bitcoin #Options?" So we thought we'd ask you - When will we be able to trade #options on these futures? 52% - Q1 2018, 19% - Q2 2018, 14% - Q3 2018, 5% - Q4 2018

• Question from L Penguin - I have a question for the option playbook. I'm a new options trader and I want to buy a LEAP call bc it looks like the stock is going to go to up in the next 12 months, but I don't want to commit yet. I also want to generate income while I hold that position. What are your thoughts on selling the call while I have the leap? Also, this stock has an attractive dividend that I'd like to capture. Is this even possible? Interested in your thoughts, thanks!...I was thinking about buying a deep in the money call for the LEAP, and then depending on where the stock is trading at the time, sell closer to the money.

• Question from VLL98 - What happens to my options if the company declares bankruptcy? Can I still exercise my calls and buy the stock at the strike price?

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.

 

Advisors Option 62: The Problems with Expiration

Posted December 27th, 2017

Options 101: Exploring Expiration Myths & Misconceptions

• What is expiration?

• Why do options expire?

• What do some of these scary terms mean, i.e. triple witching, and quadruple witching?

• How does expiration impact the Greeks?

• Myth busting: Is it true that options control the stock market on expiration Friday?

• Is max pain a real concept?

• Pinning/Pin risk: What is it? Why does it matter? How do you avoid it?

• What happens when you exercise an option?

• American vs. European exercise?

• Can you exercise options early? Should you?

• How does auto-exercise work?

The Buzz: Looking back on 2017: The year without volatility.

• VIX has been under 10 for about 45 days this year, and under 12 for a little over 200 days.

• "Stealth hedging" shows investors not so complacent

• We are all now living in a post-Bitcoin world now - when will we be able to trade the options?

This Week in Futures Options 83: How the Bitcoin Has Fallen

Posted December 26th, 2017

Topics this week include:

• Bitcoin

• Crude Oil

• Gold

• Winners - RBOB, Platinum

• Losers - Feeder Cattle, Oats

Futures Options Feedback: Listeners have their say

• Comment from TinySpec - @Options @QuikStrike1 @CMEGroup "Donald Trump might be long bitcoin! "?!?!?!?!?

• Question from MarkClydeBrant1 - Should CL be priced in BTC value of GC to strip out USD risk? Can't wait to see the COT reports on BTC Commercial Shorts: BANKS.

• Comment from Ezpreso - Good bit on gold v #bitcoin from CME - openmarkets.cmegroup.com/12749/bitcoin-gold-growth-comparison

• Comment from Bilc - Good job on the show Nick! Mark left the show in good hands. He can take vacations more often.

• Question from LV67: Why is futures and FO data so hard to get?

• Question from Camper: Do you notice any interesting patterns in corn volatility skew ahead of crop planting or harvesting?

• Question from Tim Haver: What's the cost for the premium version of QuikStrike? I like the free stuff that I play with during the show and I'm thinking about taking the plunge.

• Question from NOZ3T: Is it possible to hedge some of these aggregate commodity ETFs with puts in their underlying itself - so hedge USO with WTI puts, Corn with corn puts - you get the idea?

• Question from NOMNOM: I was excited about #bitcoin but this is giving me pause.

From the article: About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. (Brown is a contributor to the Bloomberg Prophets online column.) What's more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.

Because bitcoin is a digital currency and not a security, he says, there's no prohibition against a trade in which a group agrees to buy enough to push the price up and then cashes out in minutes.

Other investors say the whales won't dump their holdings, because they have faith in the long-term potential of the coins. "I believe that it's common sense that these whales that own so much bitcoin and bitcoin cash, they don't want to destroy either one," says Sebastian Kinsman, who lives in Prague and trades coins. But as prices go through the roof, that calculation might change.

 

Volatility Views 286: Bitcoin Futures vs VIX Options

Posted December 26th, 2017

Volatility Review: Looking back on 2017, the year without volatility. VIX has been under 10 for about 45 days this year, and under 12 for a little over 200 days.

The numbers:

• VIX Cash - 9.56

• VVIX - 92

• CBOE Skew Index - 132.5

Russell's Weekly Rundown:

• VIX Options: ADV - 721k

• VIX call/put: - 4, Total 9.38m (7.51m Calls, 1.88m Puts)

• Commodities: Volatility is low but ambiguity is sky high.

Volatility Voicemail: Options question of the week.

Now it's a party! Bitcoin futures are live on both CME Group & CBOE. But everyone's asking us the $1M question - "When will we get Bitcoin Options?" So we thought we'd ask you: When will we be able to trade options on these futures?

• Q1 2018

• Q2 2018

• Q3 2018

• Q4 2018

Listener questions and comments:

• Comment from FContangotrader - You should call #optionblockchain... forget Bitcoin, if you short $vxx since 2011 now you own an island at the Bahamas, if you own gamma and hedge with vol products, now you own 2 islands.

• Question from Javier - Is there a Bitcoin VIX from the CBOE?

• Question from JediGuy - What were your favorite volatility events and trades from 2017?

• Question from Taj Penaso - Hi, will there be options for bitcoin once the futures are traded?? Or just the futures until there are tradeable ETFs available? Thanks

Crystal Ball: Wild and reckless prognostication

Last week:

• Mark S. - 10

• Russell - 9.74

• Bill - 8.99

This week:

• Mark L. - 9.65

• Andrew - 8.99

• Russell - 9.25

 

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/