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Highlights of this week in options: top stories, the most unusual options trades,Â the best in unusual activity, and more.

October 3, 2016 Options Insider Trader Newsletter

The Holy Grail of the Options Market

It's time to get reacquainted with the collar

You don't have to be a registered options advisor to love the Advisors Option, but it doesn't hurt. The Advisors Option was created to fill the knowledge gap that we observed in the financial services community. There are so many great ways that options can be used safely in a client's portfolio, but somehow they are often overlooked.

The most recent episode, Advisors Option 47: Collars Revisited, looked at what has been called "the Holy Grail of the Options Market." Collars.

Here's how it went down:

Options 101: Collars Revisited. Inspired by a listener question, we review the collar strategy

Question from Talos - I enjoyed your panel presentation on The Holy Grail of the financial markets with Randy Swan and Mike Cavanaugh. I realize this panel was from a few years ago. Have there been any updates with regards to data on collars? Are they still effective tools for advisors looking to mitigate portfolio risk? On a specific note are they applicable to concentrated equity positions? I would appreciate any information you could provide.

If you want to hear the episode that inspired this question, you can find it at:Â The Holy Grail of the Options Market

It's time for an update on collars!

What are collars?
What makes them so effective for financial advisors?
Why are they the "Holy Grail"?
Types include:
- Collars with a kicker
- Zero cost collars

The Buzz: New Wilshire Analytics study finds options indexes offered noteworthy returns over 30 years.

Office Hours: Listener questions and comments

Question from Nick Tanner, CFA - The most recent Janus report on metals discusses their outlook for these "volatile products." What is your opinion of the recent volatility in these products? Does that make them less suitable for options-oriented clients or more suitable? Are there particular products you recommend for different clients?Â Read report here.
Question from Javier Mendoza - We are in a relatively low volatility environment right now which is contrary to the seasonality of volatility which points to Sep and Oct as the most volatile months. Do you think we're headed for a return of volatility this month or next month? Is it worth adding a few VIX calls to my holdings?
Question from LVX65 -Â Great breakdown of the problems with 60/40 this episode. I'm curious what part you feel options should play in a traditional portfolio. Should there be an options allocation? What about volatility. Do you agree that volatility is its own asset class and should have an allocation in every portfolio?

You can download the episode here.

Join Us at ALTSO's 5th Annual Rocktoberfest Chicago

A Leg To Stand On's (ALTSO) Rocktoberfest unites over 400 leaders from the alternative investments and financial services industries for a night of rock & roll and acoustic music, featuring bands whose talented performers are industry members. The event originated in New York twelve years ago, and now celebrates its fifth anniversary in Chicago.

Rocktoberfest gathers colleagues, friends, current and prospective clients for what has been recognized as one of the most unique, highly anticipated and effective events in the charitable and finance sectors. This year's event will celebrate the continued mission of ALTSO and the 15,000 children treated to date.

Date:Â Thursday, October 6 2016
Time:Â 6pm - 11pm
Location: City Winery, 1200 W Randolph Street, Chicago

Options Insider Radio Network Live Recordings

Do you want to be a part of the fun?

Here are the LIVE shows for this week:

Monday:Â
Option Block LIVE atÂ 3pmÂ Central TimeÂ

Thursday:Â
Option Block LIVE atÂ 3pmÂ Central TimeÂ

Friday:Â
Volatility Views LIVE at 12pm Central Time
This Week in Futures Options LIVE atÂ 3pmÂ Central TimeÂ

All of these recordings can be accessed atÂ http://mixlr.com/options-insider/

Sponsor Spotlight
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Socially Speaking

Are you following the Options Insider on Twitter?Â

Options #QuestionOfTheWeek. Snappy headlines. Updates on options activity as they happen. News about shows, unusual activity, and more. That's what you will find on the Options Insider Twitter feed. Follow us today!

Stats of the Week

VIX Cash Range:Â 12.14 - 15.69
S&P Cash Range:Â 2141.55 - 2175.30
SPX 30-Day Implied Volatility:Â 11
SPX 10-Day Realized Volatility: Â 11
SPX 30-Day Realized Volatility: Â 12
SPX Risk Premium (30-DayÂ Implied - Realized): 1-
Market RiskÂ Premium (VIX Cash - SPX 30-day Implied Volatility):Â 2.29
S&P Skew Index

09/26/2015 Â 121.72
09/27/2015 Â 123.74
09/28/2015 Â 126.85
09/29/2015 Â 122.67
09/30/2016 Â 124.58

That's So Unusual

The week in unusual activity

Modified Risk Reversal Trades in ECA:Â 7000 ECA Oct 11/12 calls traded over Oct 9 puts in 3 blocks on the PHLX.Â

Large Ratio Call Trades Go up in ATVI: 10000 and 20000 ATVI Oct 44.5 and 45.5 calls went up on the PHLX marked spread.Â

Calls Trade in NE:Â 5539 NE Oct 7 calls went up in one block on the ISE.Â

VNDA Parity Calls and Combos Trade:Â 3120 VNDA Nov 11 calls went up in one block on the PHLX.

Size BHI Call Buyers:Â 3890 BHI Nov 52.5 calls went up on the ISE on a sweep.

Size PFE Time Spread Goes Up:Â 27400 PFE Nov04 Nov18 33 call spreads went up in 3 blocks on the PHLX.

Calls Trade in CX:Â 868 CX Nov 8 calls went up in q block on the PHLX as part of 5000 contracts that went up on most exchanges with paper lifting the available offer.Â

Possible EWW Risk Reversal Goes Up:Â 10000 EWW Nov 52 calls traded over Nov 46 puts on the ARCA marked spread.Â

DNKN Calls Trade with Stock:Â 2740 DNKN Dec 52.5 calls went up in 1 block on the AMEX. Shares of DNKN went up as well but on a light ratio of only 32665 as printed.

EWY Combos Trade:Â 3000 EWY Nov 57 puts over Oct 56 puts and Nov 60 calls went up in 3 blocks on the PHLX.Â

XOP Puts Roll:Â 6000 XOP Oct 34 puts went up on the CBOE marked spread.Â

Possible CCJ Combo Trades with Stock:Â 15000 CCJ Mar 10 calls over Mar 7 puts went up in 2 blocks on the AMEX marked spread Â along with 600000 CCJ shares.

Massive Volatility Brings in a DVAX Buy-Write:Â 6136 DVAX Jan2017 18 calls went up on the PHLX marked buy write.Â

Size Upside TCK Call Spreads Trade:Â Over 10,000 TCK Oct14 18.5/21 call spreads went up in dozens of blocks on all exchanges marked spread.Â

EWG Puts Roll Up:Â 25000 EWG Oct 25/25.5 put spreads went up in 2 blocks on the AMEX.

WDC Call Spreads Roll Up & Out:Â 9600 WDC Oct 47.5/52.5 calls and Jan2017 57.5/62.5 calls went up in 4 block on the PHLX marked spread.

Strategy 101: Brought to you by TradeKing

Back when we recorded Options Playbook Radio 105: AMZN Iron Condor it was earnings season. This was back on April 28, 2016. Given that, Brian decided to look at a strategy around AMZN earnings. You can always find information on iron condors on OptionsPlaybook.com.

In that episode, Brian discussed:

A review of the GOOG skip-strike butterfly from last week
Taking a look at AMZN going into earnings
Where is the long straddle of the nearest-term expiration?
Why a skip-strike butterfly didn't work in this case.
Why was this the case?
How to make the most of the high implied volatility?
How to get way out-of-the-money?
Setting up the iron condor
What is the maximum risk? Gain?

If you want to hear it for yourself, you can download it now. Oh, and did you know you can submit questions to Brian Overby (aka the Options Guy) through Facebook? It's true!