Your Inside Source for Options Information

March 12, 2018

It's the Most Wonderful Time of the Year

Sixteen will enter the ring, but there can be only one winner

There are only a few things that The Options Insider staff takes as seriously as options trading, but one of those things is March Madness. In the spirit of one of the greatest events in college sports, every year, we pit broker against broker, and you, the people who use them get to decide who comes out on top. 

Without further ado, we present this year's lineup for Options Broker Madness.



Vote early. Vote often. Make your voices heard on Twitter, Facebook and StockTwits. Who will claim the title? That's up to you!

This year's fabulous prizes are: 

Third Place: Exclusive Options Insider Gear

 

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

Options Insider Radio Interviews: Talking Options and Advisors with Northern Trust

Posted March 9th, 2018

In this episode, Mark is joined by John Cherry, Head of U.S. Options at Northern Trust.

They discuss:

• What does Northern Trust do in options?
• Who are their clients?
• What services do they provide?
• What are the most common uses of options for Northern Trust clients?
• How have clients responded to the recent changes in the market?
• The benefits of the consultative approach
• What products do they use most often?
• The explosion and implosion of inverse volatility products
• What's to come from Northern Trust in options?

Option Block 697: Delicious Futures Melt

Posted March 9th, 2018

Trading Block: Markets unchanged mid-day. VIX back around the 17-handle. A rundown of CBOE RMC.

Earnings: Highlights:

• Friday- Revlon, Big Lots
• A lot of big box retail this week, too - Costco, Target, Kroger, etc.

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors Inc. (TSLA). Line in the sand puts in Victoria's Secret (LB). Size call fly/roll in Electronic Arts (EA).

Strategy Block: Mike Tosaw discusses rolling SPY puts.

Mail Block: Are you ready for Broker Madness?

• The Options Insider: It's almost time for our annual Options Broker Madness Tournament! Nominate your broker to compete in this year's #BrokerBattle. 16 firms can enter....but in the end there can be only one. Get your nominations in now & prepare to battle. #BrokerMadness starts 3/12.
• Question from CVT -The Rock Lobster suggested other ways to play VXX erosion other than buying puts. What was he talking about?

Around the Block/Economic Reports:

• Mar 9: Unemployment

 

Options Playbook Radio 199: Comparing a Butterfly and an Iron Condor in Costco

Posted March 8th, 2018

Last week we talked about a Costco butterfly. Let's revisit what has happened since. You can find more on page 102 of The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

• A review of last week
• Where is Costco trading now?
• Setting up the trade
• Why timing matters
• Comparing this to an iron condor
• Why timing matters, part two
• More risk, more reward?
• Selecting strikes
• What is the desired outcome

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.

 

Option Block 696: Trade War, Plus More SVXY Debate

Posted March 6th, 2018

Trading Block: Today we feature special guest host Lex Luthringshausen founder and CEO of Tradehawk, powered by Option Eyes.

Headlines of the day:

• What trade war?
• SPX up over 1% intraday.
• VIX is back into the teens.

Earnings Highlights:

• Tuesday - Target
• Wednesday - Dollar Tree, Costco
• Thursday - Kroger
• Friday - Revlon, Big Lots

Odd Block: More JAN 2019 50 "Catastrophe" puts in Tesla Motors Inc. (TSLA). Trade war sparks put roll in Materials Select Sector SPDR (XLB). Long-term call action in Ultra Petroleum Corp (UPL).

Mail Block: Listeners have their say

• It's almost time for our annual Options BrokerMadness Tournament! Reply/DM to nominate your broker to compete in this year's BrokerBattle. 16 firms can enter....but in the end there can be only one. Get your nominations in now & prepare to battle. BrokerMadness starts 3/12.
• Comment from AlphamakerChris - A lot of people were robbed in their sleep, it's absolutely disgraceful. They should've given several weeks’ notice, not 1 day. People lost fortunes overnight for reasons not of their own doing.
• Comment from Scott Somer - NO fun if you were long anything accept deep ITM Options on SVXY or UVXY. Highlights unexpected danger of trading options on leveraged products. TVIX TVIZ...Would have caused disorderly option markets if they did during the trading day. SVXY UVXY Shot across the bow if you are trading options on VolocityShare products as well....Wonder how many of them took people to "The Horse"?
• Question from Stifl - Great show. Agree with Mark about the OI change graph in LiveVol it's very useful. Only problem is that it only goes back a few months. Any tools out there that go back farther?
• Comment from DannyBzak - These funds are tracking an index. The index itself was down 96% on 2/5. This is a flaw in index design, not a fund problem. ETP's just can't decide to suddenly not track the index they are mandated to track. Someone needs a better mousetrap to track short vol in index form? Or a more realistic conclusion is that short vol is not a realistically scalable concept in index/ETP form. IMO short vol is something that is better served by active management, not a passive index...Which is the design flaw of thinking one should make an index designed to replicate a short position on anything. In reality someone who is smart enough to be short is smart enough to manage the risks of being short. These indexes have zero risk management built in.

Around the Block/Economic Reports This Week

• Mar 6: Factory Orders
• Mar 7: International Trade, Productivity and Costs, Beige Book
• Mar 8: Jobless Claims
• Mar 9: Unemployment

 

This Week in Futures Options 93: Inverse Volatility Craziness

Posted March 5th, 2018

Topics this week include:

• Emini
• Energy/Oil
• Gold
• Bitcoin
• Winners: KC Wheat, Soybean Meal
• Losers: Lumber, Lean Hogs

Futures Options Feedback: Listeners have their say

• Comment from MJobain - Tell Erik he needs to do some research on bitcoin volatility.
• Comment from Luis J -Good show. Caught it on podcast. Checked out the VIX/Yield curve chart on CME website. I have to admit that looks like nonsense to me.
• Question from Scott Somer -Which products are closest to their 52 week highs in implied volatility?
• Question from Phil Bremer -Does Nick have any thoughts on the inverse volatility craziness?
• Comment from Patricky -Any more research notes for the show?
• Question from Revert -What's historical AVG for Nat Gas skew? Is it typically bid to the calls?

 

Volatility Views 296: Pending Trade War and Volatility

Posted March 5th, 2018

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

• A weird day in the markets, started with a massive selloff then ended unchanged.
• VIX cash - 22.5
• VIX futures - super backward again
• VIX options: ADV - 1.05M, VIX call/put: 2.1 - Total 12.0m (8.15m Calls, 3.87m Puts)
• Goldman says options-market activity suggests pain ahead in these sectors
• Nearly half of 2017's Cryptocurrency 'ICO' Projects Have Already Died

Volatility Voicemail: Options question of the week

There's much debate about SVXY these days. Will it survive 2018? Is it poised for serious upside? We'll table those questions for now and instead ask all of you out there slinging SVXY. What is your weapon of choice?

• 63% - Naked Long SVXY
• 20% - Long SVXY Calls/Spreads
• 10% - Long SVXY Puts/Spreads
• 8% - Long SVXY w/ Put Hedge

Listener questions and comments:

• Comment from Boris Ilyevsky - Maybe their FCM partners didn't give them a choice. SVXY UVXY
• Question from J3dingle - Hi Mark, Given that both RexxShares and ProShares have re-jiggered their Volatility ETPs, what are the odds that VXX does too? Thanks, Joseph
• Question from Tills - Any chance the recent changeup with SVXY is just to appease regulators. Maybe it will switch back later in the year?
• Comment from Volatility Analytics - SPX 37% of days this year have had a 1% change in SPX. Last year we had 8 total days.
• Comment from Ragin1234 - (RE: SVXY) XIV SVXY uneducated customers are to blame for not doing their due diligence.
• Comment from LLLC1 - I think the world just woke up to a new risk for vol products - "issuer panic risk". We all knew it was in the prospectus but now we've seen it materialize. I wonder how this will affect risk premiums in these products going forward.
• Comment from John Schryber - Those stocks got sold to cover the inverse leveraged trade. It's all connected. Passive funds are...passive.

Crystal Ball: Wild and reckless prognostication

Last week:

• Mark L. - 16.75
• Bill - 14
• Mark S - 15

This week:

• Mark L. - 17.75
• Mark S. - 28

 

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/