Your Inside Source for Options Information

December 4, 2017

November Options Volume & Market Share

Options volume up one percent year-over-year 

On December 1, OCC announced exchange-listed options volume reached 385,892,412 contracts in November, a one percent increase from November 2016. Year-to-date average daily options volume is up three percent from 2016 with 16,682,201 contracts.

Equity options volume last month was 340,420,039 contracts, up slightly (0.13 percent) from November 2016. This includes cleared ETF options volume of 134,905,417 contracts last month, a decrease of 18 percent from November 2016 volume of 163,480,195 contracts. Index options volume in November was up five percent with 45,472,373 contracts.

Details on volume and market share follow. (Source: OCC)

 

Upcoming Economic Reports

A preview of what may move the market this week

 

 

Options Insider Radio Network 

Option Block 673: TSLA, XRT, CZR, Olive Garden Babies and More

Posted December 1st, 2017

Trading Block: Dow sets new record by hitting 24,000 and SPX hits 2,657. This was the fifth 1,000-point milestone for the Dow this year, first hitting 20,000 on Jan. 25. The market is still in rally mode, awaiting tax deal. North Korea unable to spook the market.

• Question from Henry Gannett - Is $VIX way up today due to call buying/pricing? It's at 11.70 right now, instead of maybe 9.0 at other, recent SPX all-time highs. The VIX is umbrage-ing me right now!

Odd Block: More Jan 2019 50 "Catastrophe" puts on the tape yesterday - OI breaks 30k. Funky ratio risk reversal in SPDR S&P Retail ETF (XRT). Put spread vs. near-term calls in Aetna Inc. (AET). Near-term Dec call love in Caesars Entertainment Corp. (CZR).

Strategy Block: Uncle Mike Tosaw discusses buying front month OTM calls and the power of gamma.

Mail Block: Listeners weigh in

Options question of the week: SPY always dominates the options volume charts. But what do you think people are actually trading in SPY? Take a guess at the Top OI position in SPY right now. No cheating (or checking with your broker) - use your grey matter & your "gut" to pick the right one.

• Jan 262 Call
• Dec 2019 150 Put
• Dec 280 Call
• Jan 240 Put

Questions and comments:

• Comment from FContangotrader - @OptionPit @Options @OptionVol The best way to show off your Italian heritage :) gluten free. RE: Couple names first child after Olive Garden.
• Question from Real Yute - I see that every strike have its own bid and ask prices, with different volatility. Now my question is.....can options be day trade....are scalped just like with stocks...? Are is volatility only move few times maybe a month....are from the options market open....the prices for options (strikes) will start to change just like how its changing in the stock market....?

Around the Block/ Economic Reports this Week:

• Nov 30: Jobless Claims, Personal Income
• Dec 1: Construction Spending

Options Playbook Radio 185: Trading into the End of the Year with AAPL Covered Calls

Posted November 30th, 2017

In this episode, Brian explores covered calls to get out of positions before the end of the year. You can find more on page 134 of The Options Playbook, which is always available on OptionsPlaybook.com, in on the Amazon Kindle edition.

Specifically:

• If you need to thin out your portfolio before the end of the year, consider covered calls
• Looking at AAPL
• Selecting an expiration
• Selecting strikes
• What is the cost?
• What do we want to happen?
• An alternative strategy
• What is the moral to the story?

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 atquestions@theoptionsinsider.com.

 

Options Bootcamp 70: Mistakes to Avoid When Trading Options

Posted November 28th, 2017

In this episode, Mark, Dan Passarelli and Jill Malandrino take on listener questions.

Options Drills: Today's topic was inspired by this listener question:

Question from MarkLitwin: How do you lose money in options in the most effective way?

• Don't by ATM straddles
• Don't load up on far OTM options because they're cheap
• Don't trade earnings
• Be careful with trading weeklies
• Watch out when selling options going into weekends or holidays

Mail Call: Listeners take over

• Question from ejh4isu: IF I buy/sell a vertical on SPX (or any equity stock for that matter) and hold until expiration, and SPX settles between the strikes, what happens? Example: sell 2395/2400 and SPX settles at 2397.
• Question from Darqane: Assigned on short SPX puts means getting long the underlying? But how does that work if it's cash settled?
• Question from Lesnod: How do you get out of the straddles? One side of a straddle is always a loss correct?
• Question from Bobster: Can you trade options outside of U.S. trading hours?
• Question from ejh4isu: Let's say you're short naked a bunch of puts and the trade goes against you, and you don't have the money to pony up? What can your broker do?
• Question from BULZEYE7: Are options worth it for day-traders? Or just for swing-traders?

 

The Option Block Episode 672: Comfortably Craptastic

Posted November 27th, 2017

The Trading Block: SQ and QCOM dominating the options charts today. Looks like QCOM activity is actually a dividend play. Light on earnings this week. Goldman execs cash out decade-old options just days before they expire.

The Odd Block: TSLA tracker; Weird house-money put roll in WDC; Tons of Dec 26 puts in DKS; Size near-term call love in NEM.

The Mail Block: Options question of the week

SPY always dominates the #options volume charts. But what do you think people are actually trading in SPY? Take a guess at the top OI position in SPY right now. No cheating (or checking with your broker) - use your grey matter and your "gut" to pick the right one.

• Jan 262 call
• Dec 2019 150 put
• Dec 280 call
• Jan 240 put

Listener questions and comments

• Question from PBiggers: how will the market react if the tax bill fails to pass in the senate on Thursday? Bullish, modest correction or major correction?
• Comment from Robert Baker: in response to your questions regarding TSLA catastrophe puts Jan 19 $50; I believe that they are insurance policies for model 3 depositors to recover their $5000 deposit in the event that Tesla goes bankrupt. After all, it's the cheapest form of insurance because the $50 put will be worth $5000 if TSLA goes to zero. Keep up with your show - it's fun.

 

Options Insider Radio Interviews: Exploring the Irrelevant VIX with OptionMetrics

Posted November 27th, 2017

In this episode, Mark is joined by David Hait, founder of OptionMetrics, LLC.

They discuss:

• Is VIX irrelevant? The Pros and Cons of VIX, the Market's Fear Gauge
• Are the answers lurking in the VIX futures term structure?
• What would an ideal VIX look like?
• Single name volatility products?
• Skew analysis and volatility
• Findings and takeaways from ORC 2017
• The Risk Premium That Never Was: A Fair Value Explanation of the Volatility Spread?
• Thoughts on Bitcoin
• And more

Where to Find Options Insider Radio?

               

Options Insider Radio Network Live Recordings

As always, you can join in the fun at http://mixlr.com/options-insider/