Articles from the Experts

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Trading Block: S&P over 2000. Is Tosaw a bull again? VIX weekly options launch today - after a long wait they are finally here! BlackRock proposes remedy for extreme volatility. Insider trading spreads outside of stocks - New York attorney general Eric T. Schneiderman has launched an inquiry into DraftKings and FanDuel

Odd Block: Strange and unusual activity in P, UUP, and AMX.

Listener Mail: Listeners take over

  • Question from Dave - Would you say the options market leads the underlying from a price perspective?
  • Question from NKX - How do entries work on options strategies? Is entry random? Should we care when we are filled? Should we adjust often? How often should we adjust on a strategy like an iron condor?

Around the Block: Earnings season kicks off with Alcoa

Trading Block: The streak is broken - VIX Cash finally breaks 20! "More execs should have gone to jail after financial crisis" Bernanke says. Stocks jump as expectations ease of U.S. rate hike; oil gains. The London Metal Exchange (LME) introduces measures to grow options trading on exchange.

Odd Block: Puts trade in Materials Select Sector SPDR (XLB), calls trade in Conoco Phillips (COP), and calls and puts trade in Valeant Pharmaceuticals Intl. (VRX)

Strategy Block: Tosaw discusses dealing with covered calls that are going against you.

Around the Block: Alcoa, PepsiCo kick off Q3 earnings season.

Trading Block: A mild selloff at the end of another volatile session: S&P High - 1927, Low - 1900. The S&P 500 slumped 2.6% in September, and posted its first back-to-back quarterly decline in four years. VIX Cash 23.42. US stocks advance, shaving worst quarterly rout in four years. Short sellers cash in Apple bets as stock declines. Metals are getting massacred.

Odd Block: Calls trade in SPDR S&P Metal and Mining (XME), calls trade in EV Energy Partners, LP (EVEP), and puts trade in Apache Corp (APA).

Listener Mail: Listener questions and comments

  • Question from TennisGr8 - Last week you mentioned being a market maker made you quick on your feet. This would be similar to a doctor in the emergency room. Does a retail trader need to be that fast and, if so, where can they learn to be that fast?
  • Question from Pat - Can you discuss the pros and cons of hedging a portfolio with put back spreads in the respective index, done for a credit? Love all the shows. Thanks for all the education. PS Please do not say Rocktober this year.

Around the Block: September jobs report issued by the Labor Department Friday

Trading Block: An aggressive selloff on the street today. Profits from Chinese industrial companies down 8.8%. GLD taketh away recently.

Odd Block: Strange and unusual activity in BBY, KRE, and MU.

Strategy Block: Uncle Mike discusses trading and managing risk as a perpetual bull.

Around the Block: Will the Chinese bloodbath continue?

Option Block 465: The Feckless Fed

Trading Block

Auto-parts suppliers option implied volatility increases on Volkswagen probe.

U.S. stocks decline as investors crave more guidance from the Fed.

 

Odd Block

Calls and puts trade in DISH network Corp. (DISH)

Calls trade in Horizon Pharma PLC (HZNP)

Puts trade in Merck & Co. (MRK)

 

Strategy Block

Uncle Mike Tosaw discusses rolling options on vertical and single-leg puts

 

 

Listener Mail

Question from Fred - Being a market maker on the floor was a good way to learn options trading. Can you explain how MM worked and why it was the best way to learn options trading?

 

 

Around the Block

Nike and BlackBerry highlight another quiet earnings week.

The Option Block 465: The Great Internet Meltdown

Trading Block

  • The Skype Gods conspired against the All-Star Panel on this episode. But we're back nonetheless with more options analysis, unusual activity, listener mail and more. 
  • Topics covered in the Trading Block today include: the still wonky VIX futures term structure, the endless debate over the FED, 70X returns on Volkswagen puts and much more

ODD Block

  • Strangle Selling Palooza!
  • Ensco PLC - ESV
  • Boardwalk Pipeline Partners -  BWP
  • FMC Technologies Inc. - FTI

The Mail Block

  • This week the listeners want to know what the All-Star Panel thinks about pin risk.

Around the Block

  • Keep your powder dry while this crazy volatility shakes itself out of the market

Trading Block: August US listed options volumes grew 12% compared to July, reaching a new monthly high in 2015. VIX dips below 20.00 for the first time since August 20th after FOMC statement. No hike: Fed keeps benchmark rate near zero. Citing global economic weakness and financial market turmoil, the Federal Reserve agreed Thursday to keep its benchmark interest rate near zero despite the rapidly improving U.S. labor market. Alt-Options launches Bitcoin derivative market.

 

Odd Block: Strange and unusual activity in PBR, WLL, and QLIK.

Strategy Block: Uncle Mike Tosaw discusses trading the Fed.

Listener Mail: Listener questions and comments.

Comment from Hawkeye - Mark- A few things- Too bad the daily dose of Lobster was too much of a cholesterol bomb for those guys at TOS.  Bummer.  I liked the show. With respect to the OIC study on various options strategies since 2003 - Are you really surprised the highest return was gained by a synthetic short put stupid in what has mostly been a bull market?  (covered strangle => short call + long stock = ITM short put, plus OTM short put). So, YES!  Selling 2 puts brings in more money than selling only 1! Yes, the Lobster and Meatball have taught me enough to figure this out and they should feel good that something has stuck.

Keep the great shows coming- Hawkeye

 

PS- A while back Uncle Mike answered a question I had about holding.  I sent a thank you back, but I was not sure you ever got it.  Anyways, please tell Uncle Mike THANKS that that was an outstanding answer and it made perfect sense.

Trading Block: Alibaba - Shares of Alibaba Group Holding Ltd. (BABA -4.05%) have tumbled recently amid an array of problems. U.S. stocks decline amid focus on Fed rate decision this week. Traders are preparing for massive Fed-driven volatility. The SPDR S&P 500 (NYSE:SPY) put-call ratio dropped hard to well below its 20 DMA on Friday.

Odd Block: Calls trade in Anheuser Busch Inbev SA (BUD), puts trade in Chesapeake Energy Corp. (CHK), and calls trade in EMC Corp (EMC).

 

Mail Block: Listener questions and comments

  • Question from Mark Brant - I guess if you place the long side first then your margin will be lower for the short side so maybe the long side is hard?
  • Question from Joe Joe - What happens when I sell a call? Does that money hit my account right away, or do I have to wait until I close the position?

 

Around the Block: Fed Meeting this Wednesday and Thursday.

Trading Block: Federal Reserve may bring new life to fed-funds options pit. Apple plans land with a thud. Apple is pulling out all the stops, but nothing it seems, can get the stock moving or get investors jazzed again.

 

Odd Block: Calls trade in Whiting Petroleum Corp. (WLL), calls trade in Qualcomm Inc. (QCOM), and calls trade in Rite Aid Inc. (RAD).

Listener Mail: Listener questions and comments

  • Question from MB2 - Heard you chat about legging spreads on the show. The strategy guy seemed to not be a fan of legging. Can he expand on that and his reasoning behind it? I have utilized legging many times as a way to improve my execution prices on spreads. I think it is a legitimate trading technique.

 

Around the Block: Earnings season is coming? 

Trading Block: Panel of ex-Fed officials say no rate hike will come at September meeting

 

Monthly Volume Breakdown:

  • OCC cleared contract volume rose 33% in August.
  • Year-to-date average daily cleared contract volume is up 0.15 percent from 2014 with 16,809,864 contracts in 2015.
  • Exchange-listed options volume reached 426,328,677 contracts in August, a 33 percent increase from August 2014 volume of 320,155,407 contracts.
  • Year-to-date average daily options volume is up 0.21 percent from 2014 with 16,554,221 contracts in 2015.
  • Equity options volume in August was 373,616,786 contracts, a 30 percent increase from August 2014.
  • Index options volume in August was up 60 percent from August 2014 with 52,711,891 contracts.

Odd Block: Puts trade in Cobalt International Energy Inc. (CIE), calls trade in CIENA Corp. (CIEN), and puts trade in Wisdom Tree India Earnings (EPI)

Listener Mail: Listener questions and comments

  • Question from Mousin - Could it be that the huge options portfolios in macro hedge funds are to blame for the big vow in the market on Monday?
  • Question from ADM - During activities on Monday, were there any options exchanges that failed?

 

Around the Block: Non-Farms out tomorrow. 

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