Your Inside Source for Options Information

June 4, 2018

May Options Volume & Market Share

OCC Cleared Contract Volume Increased Eight Percent in May

On Friday, OCC announced that total cleared contract volume in May reached 411,264,931 contracts, an eight percent increase from May 2017 volume of 380,010,098. OCC's year-to-date average daily cleared contract volume is up 25 percent from 2017 with 21,321,765 contracts compared to 17,079,884 contracts in 2017.

Overall exchange-listed options volume reached 403,748,267 contracts in May, up 10 percent from May 2017. Equity options volume reached a total of 366,176,065 contracts, a 12 percent increase from May 2017. This includes cleared ETF options volume of 150,994,638 contracts last month, a 12 percent increase over May 2017 volume of 134,835,545 contracts. Index options volume was down four percent with 37,572,202 contracts in May. 

Here are the details on market share:

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

Option Block 719: The Rock Lobster Loves Asian Options

Posted June 1st, 2018

Trading Block: Trade wars are back on the table. Credit Suisse announces 1-to-10 reverse split for TVIX and TVIZ effective June 8th.

Odd Block: Put palooza in Deutsche Bank AG (DB). Opening size call sale in Exeton Corporation (EXC). Calls and puts trade in PagSeguro Digital Ltd (PAGS)

Mail Block: Options question of the week

Holiday Weekends are notoriously tough for VIX traders. The markets love to crush Volatility going into these events. So we thought we'd poll the savvy VIX traders in our audience - where do you think VIX will OPEN on Tues 5/29?

• 39% - Here: 12-14
• 30% - Higher: 14-16
• 18% - Lower: 10.5-12
• 13% - Much Higher: >16

Options Flash Poll: Let's stick with our Volatility theme to round out the week. Which product do you think has the highest 30-day implied Volatility? No cheating (or checking with your broker)! What does your gut tell you? VIX? Bitcoin? TSLA? RUSSELL2000/RUT? IWM?

• Tesla, TSLA
• VIX
• Bitcoin
• Russell 2000: Emini, RUT

Listener questions and comments:

• Comment from Charlie Tunsen - I would like to add my vote for after-hours options trading. It's ridiculous that the underlyings keep trading while the derivatives of those products are locked in an artificial deep freeze. I don't care if it's entirely illiquid or just a resting order book. Some liquidity is better than none when everything is melting down.
• Question from Mads Melken - Why don't you guys talk about Asian options?

Around the Block: What is on our radar?

 

Options Playbook Radio 211: Unpacking Listener Questions

Posted May 31st, 2018

Huddle up, listeners. It's all listener questions today on Options Playbook Radio.

Including:

• Is there a rule of thumb on how many strikes to skip in a skip strike butterfly?
• What is Brian's favorite underlying for trading options
• Do you trade options on stocks below $5?

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.

 

Options Bootcamp 74: Trading Options in a High Volatility Environment

Posted May 30th, 2018

Basic Training: The Return of Volatility!

• VIX is not dead.
• VIX jumped from 13.99 on 2/2 to 38.30 on 2/5, and 46.34 on 2/6.
• What are you thought on the recent resurgence of volatility in the marketplace?
• Do you think this is a temporary aberration or have we transitioned into a new volatility regime?
• What is the impact of higher volatility on options strategies? What is the impact of this change for options traders?

Mail Call: Options Flashpoll

The proposed third exchange from MIAX will raise the total number of U.S. Options Exchanges to 16. Is this a good thing for the options market? Is it the straw that finally breaks the camel's back? Or are you too busy getting great fills to care?

• 44% - More Exchanges the Better
• 22% - Please Make It Stop
• 34% - Don't Care: I get filled

Listener questions and comments:

• Question from Allan Tullman - There was a lot of research last year regarding selling put options to harvest risk premium. Now that volatility is back is this an ideal time to harvest premium via put selling or does the increased volatility increase the probability of getting whipsawed?
• Question from Scott Somer - For Jill Malandrino: When CBOE does their floor reports there is an open outcry din from the SPX, VIX areas. Are there areas on the Nasdaq PHLX floor that also have that type of din, and if so, what names are getting this din?

Advisors Option 67: Swan CIO Summit Overview, plus Your Questions

Posted May 30th, 2018

The Buzz: Hot off the heels of the Swan CIO Summit

Highlights included:

• Making Vol Great Again
• Perspectives on Risk Management
• A Strategy to Define Risk
• Where Hedged Equity Fits
• Many Options with Options

Office Hours: What do you want to know?

• Question from Allan Tullman - There was a lot of research last year regarding selling put options to harvest risk premium. Now that volatility is back is this an ideal time to harvest premium via put selling or does the increased volatility increase the probability of getting whipsawed?
• Question from Charlie C. - Quick Q for the show: What's the weirdest thing you've seen in the options market?
• Question from Seveny - When can we expect Swan Crypto? Sure would have been nice in the recent selloff.
• Question from Dajakal - Is there a good rule of thumb for when to use a ratio spread and how much of a ratio to use? 2X? 3x? More? Also what is best time or scenario for ratios?
• Question from Duffy - How do you handle the fixed-time aspect of trading options? Most of my client strategies have a 1-2yr time horizon so trading a 1 month or 3 month option doesn't really suit my needs.

 

Volatility Views 306: Setting Things Straight on VIX Manipulation

Posted May 29th, 2018

Volatility Viewpoint: Today's guest is Tom Lee, Managing Director at Investment Strategy and Research at Parametric.

He discusses:

• What is Parametric?
• Who are their customers?
• What do they trade?
• Harvesting risk premium
• VIX: Is it rigged?

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

• VIX Cash - 12.53
• VVIX - 90.5
• VIX Options - ADV: 592k, VIX call/put: 2.8/1, Total 6.67m (4.94m Calls, 1.72m Puts)
• VXX - 33.81

Volatility Voicemail: Options question of the week

Holiday Weekends are notoriously tough for VIX traders. The markets love to crush Volatility going into these events. So we thought we'd poll the savvy VIX traders in our audience - where do you think VIX will OPEN on Tues 5/29?

• Here: 12-14
• Higher: 14-16
• Lower: 10.5-12
• Much Higher: >16

Listener questions and comments:

• Comment from James1 - I took a flyer on a couple hundred VXX Jan 10 puts for .03 after learning about them on your shows. Seems like I'm not alone as a few hundred thousand others appear to have joined the party. It's a fairly cheap roll of the dice on long term VIX erosion without massive risk or expense.
• Question from Malik - VXX puts to spec on contango in VIX futures makes sense to me. Do you think it's worth it to have a few VXX OTM call spreads in the back pocket as well to help protect or spec on a few reversals that buck the long-term trend? Or is it just wasted money on anything bullish VXX?
• Question from TGeek -Thx for the show. Can you include a breakdown of OTC variance swaps on an upcoming episode?

Crystal Ball: Wild and reckless prognostication

Last week:

• Mark L. -13.25
• Mark S. - 12.75

This week:

• Mark L. - 12.95
• Mark S. - 13.50

This Week in Futures Options 103: Gold Bugs Are Smiling

Posted May 29th, 2018

Topics this week include:

• Gold
• Equities
• Crude

Futures Options Feedback: Options question of the week.

CME Group just announced a new Ether index this week expanding the universe of Crypto indices. But, at the end of the day, we all want more tradeable products. Which derivatives product would you like to see next in the Crypto space? Bitcoin? Ether? Ripple? LightCoin?

• 76% - Bitcoin Options
• 9% - Ether Futures
• 6% - Ripple Futures
• 9% - LightCoin Futures

Listener questions and comments:

• Comment from Patrick Snoke: The title got me excited for Talking TACOs on TWIFO, I thought we were going to talk about a 2:1 beef-fish pairs trade. Just a suggestion for next time
• Question from Flyer: How is Bitcoin's volatility calculated? Is the limited supply and abundant demand a current driver upwards for the price?
• Comment from Milton FMR Institute: Trying to short lumber (LSN18) for two days now but guess what - no way to get the order filled
• Question from 0OZEI: Can I trade gold-silver spread options on CME? 

 

Where to Find Options Insider Radio?

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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/