Articles from the Experts
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 Option Block 353: Crazy Combos and the Great Open Interest Debate Trading Block: A volatile day on the street - S&P got as low as 1952. VIX cash ticking up nearly one handle. Gold a big mover today - to the delight of Uncle Mike Tosaw. It’s time for the Trading Patterns guessing game again - this time with GLD! Lumber Liquidators (LL) gets crushed, down over 20% today. Options volume already 10x ADV on new that they are cutting 2014 earnings outlook. Sprecher calls for market-wide purge for order types. Chicago Fed joins the HFT conversation calling for curbs. Odd Block: Calls roll in Thermo Fisher Scientific (TMO), closing combos trade in CBS Outdoor Americas Inc. (CBSO), call buyers trade in Goodyear Tire and Rubber Co. (GT), dividend trade calls trade in Freeport McMoRan Copper (FCX) Xpress Block: A reminder at IdeaHub for futures is out. Please be aware that firms are trying to rein in exposure fees. Mail Block: Listener questions and comments
Around the Block: On Thursday: weekly jobless claims, May wholesale inventories as well as Fed talk: Stanley Fischer, Vice Chair of the Fed Reserve, gives his first speech (financial reform in Cambridge, MA) and KC Fed President Esther George (economy and monetary policy in Oklahoma). Problems in Portugal: parent of Portuguese banks delayed payments on some short-term debt.
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Option Block 352: Hot GoPro Action Trading Block: A mild selloff ahead of earnings. The newcomer GoPro was very active today, as well as everyone’s favorite fruit company, Apple.
Odd Block: Call buyers trade in URS Corp. (URS), puts buyers with stock trade in King Digital Entertainment (KING), call buyers trade in Zions Bancorp (ZION), and put spread buyers trade in iShares MSCI Germany Index (EWG).
Xpress Block: A lot of speculation in fixed income.
Strategy Block: Tosaw discusses how not trading can also be an option when you can get what you want.
Mail Block: Listener Question
Around the Block: ALCO kicks off the earnings madness again tomorrow. |
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Option Block 351: Dollar General Insider Loses Millions Trading Block: A quiet day on the street, given the shortened trading week. A stealth rally in Gold. Traders preparing pre Google earnings. Under 400K ADV in VIX today.
Odd Block: Call spreads trade in Dollar General Corp. (DG), size ratio spreads trade in Carnival Corp (CCL), puts sellers trade in Companhia Energetica Minas. (CIG), and small call buyers trade in Amicus Therapeutics, Inc (FOLD).
Xpress Block: Alex discusses premium harvesting in IdeaHub.
Strategy Block: Uncle Mike Tosaw discusses when it’s OK to break the rules and to make new ones.
Mail Block: Question from Aviatrix - Hello all-star panel! Great program. I have a question about option open interest. I don’t really understand it. I’ve read some blogs that say open interest can impact a stock’s direction during expiration week. Is this just, as Mark would say, the “tin foil hat crowd” or is there something to this? Should I be tracking open interest as an indicator? Keep the “wit and wisdom” coming!
Around the Block: Be aware - this is a shortened holiday week. |
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Option Block 350: TWTR Risk Reversal Rundown Trading Block: Interesting intra-day activity, but ended up closing basically unchanged. VIX cash back in the 11 handle range. A resurgence in Twitter. A banner day for Valero. Odd Block: Calls trade in PowerSecure International, Inc (POWR), calls roll in Ashland Inc. (ASH), puts trade in SM Energy Co. (SM), put spreads roll in Tractor Supply Co. (TSCO), puts trade in MagicJack Volactec ltd. (CALL). Mail Block: Listener questions and comments Question from JG - Hi guys! Love the show(s), I like really really love the show(s). Last Option Block you mentioned us providing our trades and you dissecting them. Just happens to be a very opportune time because I am currently in a trade and I'll provide my analysis and would like to hear you guys discuss. Question from Roger Edwards - Hi. Unusual options activity has drawn my attention to company A, which led me to discover that it's a takeover target by company B. Of course takeover timing is the big challenge. I know that company A has an upcoming ex-div date. Is an ex-div date relevant (factored into takeover timing) at all? Is there any advantage in company B timing its takeover of company A before or after the ex-div date? I'm just trying to use whatever information I can to select the right option expiration. Thanks so much. Question from Kaiserdog76 • - "The Dumbest Investor In the World" - Made good money on UA stupids and FB. Played for a bounce in IWM using options. As that one looks like it has the most room to run. Decent jobs numbers and the "Goldilocks" rally continues. - P.S. Rock Lobster would be proud of me. I even traded a couple Apple calls for a nice pop….Oh, Bita,bita,bita,bita........ Gotta love those China Tech stocks that Retail usually has no clue about. Excellent heads up. Maybe I will look for a bottom and get long again. I had bought 100 shares back when it was trading at $30. In less than a week I was up $600 and figured it could go down just as fast as it went up. Sold and never looked back. I might be breaking some rules here but I like to circle back to winning trades after I feel enough time has passed. Is that a bad habit? I do not have % stats or anything but I know that many have worked more than once. Thanks for refreshing my memory on BITA!
Around the Block: Andrew is amazed. Short trading week next week. Not expecting too much activity. Look out for early cash-settled indexes. Be prepared. |
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Option Block 349: A Bonafide Covered Strangle Trading Block: Lululemon had a big move today, as did Facebook and Tesla. Is time once again for the Trading Patterns Guessing Game!. Odd Block: Put butterflies trade in Dow Jones Industrial Average ETF (DJX), call sellers trade in AerCap Holidings NV (AER), call and put sellers (covered strangle?) trade in PG&E Corp. (PCG), and same month call rolls trade in Six Flags Entertainment Corp (SIX) Xpress Block: What is your take of the covered strangle? Adding names to the IdeaHub. Strategy Block: Tosaw discusses the enhanced collar strategy. Around the Block: How long can the market continue to ignore what happens in Iraq, higher oil prices, etc.? Whoa to the complacent. Where’s the conviction? |
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Option Block 348: Rampant Insider Trading The Trading Block: More of a micro, rather than a macro day today. Gold up on the day. Is VIX too low? Lululemon had a stealth rally last week. New Amazon Fire phone. Visa popped up the day. A study by professors at NYU and McGill University in Montreal shows insider options trades precede about a fourth of US M&A deals. Odd Block:Call sales trade in Verso Paper Corp. (VRS), and bullish risk reversal/Combos trade in Exterran Holdings Inc. (EXH) Xpress Block: New premium harvesting tools now available in IdeaHub. New features for the Walk Limit. Mail Block: Listener Questions & Comments Question from Shane Hamilton - Hey Mark, How about a new segment called the "Success Block" where listeners submit winning trades and your cohorts comment how it could have been improved, done differently or kudos exactly the way it was played. Just an idea that seems like that might be fun. Besides we all love to talk about our winners. Question from ITrumpDoom - Hello. If I expect a stock to move significantly over the next six months, but I do not have a prediction for direction: Is it reasonable to sell a short put butterfly, and a short call butterfly on that stock, with all the long strikes at or very near the money? I think I would cover the risk in one of the flys, by the profit in the other, since it would be impossible for both of them to expire with maximum loss (not that I would hold to expiration). Is my logic sound on this? Is six months an unreasonable expiration to use on these given potential IV increases?
Around the Block: Weekly jobless claims and Regional manufacturing survey (Philly Fed). Keeping an eye on the Iraq situation, crude and Brent oil prices. |
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Option Block 347: Bringing Guns to the Trading Pit Trading Block: A very mild day on the street. Everyone still loves Tesla. What is up with gold volatility?
Odd Block: Calls spreads trade in Fairchild Semiconductor Intl. (FCS), calls trade in Nexstar Broadcasting Group, Inc (NXST), calls trade in St Jude Medical, Inc. (STJ), puts roll trade in SPDR Barclays Capital High Yield (JNK).
Xpress Block: You could quality for a commission waiver on options trading if you belong to the Schwab Private Client Group. Idea Hub did very well in May. Premium harvesting now available for both securities options and futures options.
Strategy Block: Remember, this week is the ex-dividend date on SPY
Around the Block: Monday - NY Fed Empire Manu survey. Industrial production and capacity utilization for May and June. NAHHB Homebuilders survey. |
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Option Block 346: Say Hello to Exposure Fees Trading Block: A sea of red on the broad street today. VIX: more fear than fear itself? A big day for energies. Lululemon missed their earnings mark. Odd Block: An update of recent activity in Dollar General (DG), newsletter put seller trade in Galena BioPharma Inc (GALE), risk reversals/collar in Jet Blue Airways Corp (JBLU), and size put buyers trade in the iShares Dow Jones Transport (IYT) Xpress Block: A lot of activity in portfolio margining. More news on the upcoming futures for IdeaHub. Strategy Block: An update on the ratio-hedged risk reversal on Apple. Finding ways to finance the hedge. Mail Block: Listener questions and comments. Question from Ivan - I have heard some people say I should not sell naked short puts because of “gap risk”. I always respond that it is the same thing as working a limit order in the stock. Who is right - me or these worry warts?
Around the Block: Thursday: Import price index and business inventories are estimated to climb. The World Cup begins and the rest of the world will be on vacation for the next month. |
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Option Block 345: Beating the Street on Dollar General Trading Block: A mild day on the street. Apple stock split. A possible Deutsche Bourse sale of ISE. Odd Block: Activity review from last week: Carl Icahn disclosed a 9.4% stake in Dollar General (DG) and shares soared. We knew something was up last week. Call buyers in USG Corp (USG), puts rolls trade in Kodiak Oil and Gas Corp. (KOG), and crazy call buying in Clorox Group (CLX) Xpress Block: Apple dominates the housekeeping, speculating on Lululemon earnings, and a stealth rally in Oil
Mail Block: Listener questions and comments
Around the Block: S&P 500 edging toward the 2,000 mark. It could happen in the next few weeks. Lululemon earnings 6/12.
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Option Block 344: Premium Palooza in Dollar General Trading Block: A great day on the market. Amazon rises after announcing that they will be making an announcement. What is lurking under the low VIX? Complacency? Odd Block: Unusual activity in Tesoro Corp (TSO), Target Corp. (TGT), Dollar General Corp. (DG), and NuStar (NS) Xpress Block: Alex discusses about how a few select clients may be able to trade commission free. Enhanced capabilities in Schwab mobile, including Hub for Futures.
Around the Block: Friday = Unemployment Numbers and Non-Farms |