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The Options Insider Radio Network
The Option Block All-Star Panel breaks down the latest developments in the options market, analyzes unusual options activity, explains cutting-edge options strategies, answers listener questions and much more. Whether you're an active options trader or just getting started in the options market, The Option Block will keep you informed and entertained.
Option Block 550: Buy Your War Bonds Now
Trading Block: The one- year anniversary of the 8/24 flash crash looms near. Yellen speech at Jackson Hole set to dominate mood on Wall Street. VRX continues its roller coaster ride. Up another 8% today - volume 1.5 ADV by 12PM. Calls 1.5 /1 over puts, IV 30 61. Sep. ATM straddle approx. $4, approx. 13%. Confirmed Monday that it has hired Zoetis executive Paul Herendeen as its new chief financial officer. Odd Block: Calls trade in Starbucks Inc (SBUX), calls trade in Marvel Tech Group (MRVL), puts trade in General Growth Properties Inc (GGP) Mail Block/Options #QuestionOfTheWeek: $USO $11, up 19% in Aug, SEP ATM steaddle= $.80, 10 Put= $.10, 12 Call = $.09. Would you: Sell the Straddle Buy the Straddle Buy put/Collar Sell Put/Bull Risk Reversal Question from Natalie L. - I keep receiving email promotions from an “expert” who says his top rule of trading is that he never buys options. He only sells them. What is this about? Is this a reliable approach to options trading or should I delete these emails? Around the Block: A look at this week in the market: Aug 23: New Home Sales Aug 24: existing Home Sales Aug 25: Jobless Claims, Durable Goods Aug 26: GDP, International Trade, Consumer Sentiment
01:03:0723/08/2016
Option Block 549: Squeezy Mcheesenstein
Trading Block: Earnings today (before the bell): Wal-Mart, Hormel Foods, MSG Networks); (after the bell): Gap, Ross Stores. Wal-Mart closed at $73. ATM straddle $2.75, approx. 3.8% Options #QuestionoftheWeek: $VRX $26.66 up 7% Monday. IV30 is 63. HV30 is 99. Looking out 1 month would you rather: Buy Calls? Buy Puts? Sell Premium? Will not touch $VRX Odd Block: Calls trade in JA Solar Holdings Co. (JASO), puts trade in iPath SP Crude Oil ETF (OIL), puts roll in Eli Lilly and Co (LLY), and puts trade in Harley-Davidson Inc (HOG). Strategy Block: Uncle Mike Tosaw discusses long-term collars and bonds. Mail Block: Listener questions and comments Question from RealRK: Speaking about bonds, any better option than buying puts on HYG in anticipation of rate hikes and since it was lagged the price of oil? Question from Vegs: Lots of big fat options OI tied to big ES 2200. How do I see this information? Does this mean big traders are betting on 2200? Does that mean pros or retail? Around the Block: Earnings highlights for Friday include: Deere & Company, Estee Lauder Companies, Foot Locker, Stein Mart
01:04:1719/08/2016
Option Block 548: Chatting About VRX, VIX, AMZN, PAAS and more
Trading Block: New all-time highs across most major indices. Oil rallies yet again; up 1.5%. VIX cash still below the 12-handle. Earnings Tuesday: BMO. Stock $137. ATM straddle approx. $4/3%. Odd Block: Vertical put buying in Polaris Industries Inc. (PII), vertical call buying in Energy Transfer Partners LP (ETP), buying calls in Akamai Technologies Inc. (AKAM) Mail Block/Options Question of the Week: What is your preferred way to trade crude oil? #QOTW WTI Options/Futures USO Options/ETF XLE Options/ETF Brent Options/Futures Question from Joe736: Do you think VRX will selloff a buck to open tomorrow? Around the Block: This Week in the Market Aug 15: Treasury International Aug 16: CPI, Housing Starts, Industrial Production Aug 17: Fed Minutes Aug 18: Jobless Claims
01:03:3716/08/2016
Option Block 547: TWTR Frenzy, BABA Bounce and VRX Volatility
Trading Block: Strong earnings, surge in oil power Dow to record intraday high. Earnings today: Before the bell: Alibaba Group Holding Ltd, Kohls Corporation, Macys Inc.; After the bell: Cosi, Inc., Nordstrom Inc. VRX: ATM straddle approx. $3, 13%. So much for put buyers Stock opened $1.50 higher and closed nearly $6 higher - surrendered most of those gains today. Odd Block: Calls trade in Twitter Inc (TWTR), calls trade in Alibaba Group Holdings (BABA), puts trade in SPDR Retail ETF (XRT) Mail Block: Options Question of the Week Options #QuestionoftheWeek. What is your preferred way to trade crude oil? #QOTW WTI Options / Futures USO Options / ETF XLE Options / ETF Brent Options / Futures Question from Rpatel117 - Do you guys think DIS cross 100 this week?" Question from Matrix - Never sold options before. Why do some people prefer to sell them when they can buy them instead? Question from Cucas - What are the best resources for weeklies? Around the Block: This Week in the Market Aug 9: Productivity and Costs Aug 10: JOLTS, Treasury Budget Aug 11: Jobless Claims, Export Prices Aug 12: Retail Sales, Consumer Sentiment
59:3612/08/2016
Option Block 546: VRX and Buffett's Weapons of Mass Destruction
Trading Block: Earnings today include (before): Dean Foods, Sotheby's, Tyson Foods; (after) Hertz Global Holdings, Rackspace, WebMD Health Corp. Options bears descend on Valeant ahead of earnings. Traders are betting shares are due for even more pain. Non-farm payroll brightens the U.S. economic outlook. Odd Block: Puts trade in Tupperware Brands Corp. (TUP), puts trade in SM Energy Co. (SM), calls trade in Targa Resources Corp. (TRGP) Strategy Block: Uncle Mike Tosaw discusses money management Around the Block: Earnings highlights for the week. Tuesday: Coach, Exelon Corporation, Tribune Media Company, Valeant Pharmaceuticals, Walt Disney Company, Yelp Wednesday: Michael Kors Holdings, JD.com, Ralph Lauren, Shake Shack, The Wendy Company Thursday: Alibaba Group Holding Ltd, Kohls Corporation, Macys Inc., Nordstrom Inc. Friday: JC Penney Company
01:03:2509/08/2016
Option Block 545: Dump Like an Elephant
Trading Block: Earnings today: AMC Networks, HH Gregg, Icahn Enterprises, MGM Resorts International, Nokia Corporation, Starwood Property Trust, Time Inc. (before); Activision Blizzard, Almo Group, Bats Global Markets, LinkedIn Corporation, Lions Gate Entertainment Corporation, Weight Watchers International, Zillow (after). ATVI at $40.84, approx. 7%. Takeover rumor sparks busy day in Twitter options. Odd Block: Aug call buyers in Comcast Corp (CMCSA), selling calls in Noble Corporation PLC (NE), and put buying in Market Vectors Gold Miners ETF (GDX). Mail Block/Options Question of the Week: Twitter poll AND listener questions and comments What is most important to you when choosing an options broker? Commissions Platform Features Support/Service Educational Offerings Question from Grasshopper: I have heard options strategies may be vulnerable to "dump like an elephant" concerns criticism. Are the losses big, are high win rate strategies a cause for suspicion? Question from Fred: Would trading options change that way I look at/trade futures? Question from Anthony Cioffi: I have got a somewhat off-topic question from the show. I know Mark is a fight fan. What does he think of the recent sale of the UFC for $4.2 billion?Good deal, or did they dramatically over pay? What are the odds that the UFC will eventually go public as a result of this deal? It would be fun to trade options on that name. They would probably be very volatile heading into big fight cards. Around the Block: Earnings on Friday:Virgin America. This Week in the Market: Aug 4: Jobless Claims, Factory Orders Aug 5: Non-Farm Payrolls, International Trade
56:2505/08/2016
Option Block 544: The Great Options Broker Debate: Commissions Vs. Platform
Trading Block: Earnings today include: AMC Entertainment Holdings, Loews Corporation (before), and Dunn & Bradstreet, General Growth Properties (after). U.S. stocks pressured as oil losses mount. Crude back below $40. BATS to launch “BAM” Options Auctions, offering competitive price improvement opportunity. Odd Block: Calls selling and buying in MetLife (MET), calls selling in FDC First Data Corp (FDC), and LEAPS put buying in Trina Solar Limited (TSL). Strategy Block: Uncle Mike Tosaw discusses portfolio margining Options Question of the Week: What is most important to you when choosing an options broker? Commissions Platform Features Support/Service Educational Offerings Around the Block: Earnings Highlights for the Week. Tuesday: Avis Budget Group, CVS Health Corporation, Ecolab, Electronic Arts, Etsy, Fitbit, Intercontinental Hotels Group, La Quinta, Pfizer, Potbelly Corporation, Royal Caribbean Cruises Wednesday: Cedar Fair, Crocs, GoDaddy, Herbalife, Intercontinental Exchange, Office Depot, Tesla Motors, Time Warner, Twenty-First Century Fox Thursday: Activision Blizzard, Almo Group, AMC Networks, Bats Global Markets, HH Gregg, Icahn Enterprises, LinkedIn Corporation, Lions Gate Entertainment Corporation, MGM Resorts International, Nokia Corporation, Starwood Property Trust, Time Inc, Weight Watchers International, Zillow Friday: Virgin America
01:01:2702/08/2016
Option Block 543: Broker Buying Sprees and Earnings Breakdowns
Trading Block: Big news! OptionsHouse is now the sponsor of The Option Block. Earnings today include CME, FORD, DOW. Ford off nearly 9% AMZN: $748.50. ATM Straddle approx. $50, 6.6% GOOG: $742. ATM Straddle approx. $38.50, 5%. Odd Block: Calls trade in ETSY Inc. (ETSY), calls trade in The Technology SPDR (XLK), calls and puts trade in Yandex NV (YNDX) Mail Block: Listener questions and comments Question from AWorth: Can the Options House guys explain how their short buyback program works? Is it only for outright shorts, or if I have a short leg of a spread that is near the money on expiration but trading under $.10, can I close that out without commission or do I have to close the whole spread? Question from Thomas Hatch: I like dividend yield stocks. I listened to an earlier show and you mentioned writing covered calls to generate dividends. Can I apply this strategy to dividend yield stocks? Any risks I should watch out for when doing this? Question from 777: Are you aware of any specific gold arb between chinese gold derivatives and their U.S. equivalents? Around the Block: Earnings on Friday include CBOE, Exxon-Mobil (XOM), Merck (MRK) and UPS (UPS). This weekin the market sees GDP, Consumer Sentiment on July 29.
01:01:3529/07/2016
Option Block 542: VZ Buys YHOO, plus AAPL Downgrade
Trading Block: Earnings! Not many earning today, but a big week is ahead. Apple after the bell tomorrow. Stock at $97.27, ATM Straddle approx. $2.90, or 3%. Oil prices fell to two-and-a-half month low. Verizon owns the internet from the 90s, AOL last year, Yahoo today. Odd Block: Calls trade in Crown Castle Inter. (CCI), call buying in Bank of America (BAC), call selling in iShares MSCI Japan ETF (EWJ), and put selling in Lululemon Athletica Inc. (LULU). Strategy Block: Uncle Mike Tosaw discusses selling put spreads on a dip in the marketplace. Around the Block: Upcoming earnings include: AMZN F GOOG TWTR FB
01:01:3726/07/2016
Option Block 541: Revenge of the Schwartzotron
Trading Block: Most major markets off 0.5% or more. VIX cash watch. Earnings today (before) Dunkin Brands,General Motors, Marriott Vacations, Southwest Airlines; (after) AT&T, Chipotle Mexican Grill, E*Trade Financial (ETFC). Apple Watch is a flop! Odd Block: Calls trade in Nobel Corporation (NE), calls trade in Teucrium Corn Fund (CORN), calls and puts trade in Ebay Inc (EBAY), and calls trade in Mattel Corp (MAT). Mail Block: Listener questions and comments....LIVE! Size aside, what are the primary benefits of using SPX instead of SPY. What is going on in the VIX Aug 13 puts? Which names are the most reliable premium writes each quarter? Is there a tradeable pair between VIX and another member of the family of volatility products? What to do with the upcoming UVXY reverse split? Around the Block: Earnings on Friday: American Airlines, General Electric Company, TCF Financial, Whirlpool Corporation.
57:3322/07/2016
Option Block 540: Free Trades with Every Pokemon
Trading Block: The coup that wasn't. Earnings today include Bank of America, Hasbro, Charles Schwab Corp., (before) and IBM, Netflix, Yahoo (after). A Brexit swoon boosts US options volume to a 10-month high. Odd Block: Size puts in IZE iShares MSCI Turkey Market Index ETF (TUR), calls trade in Nobel Energy (NE), calls trade in Market Vectors Russia ETF (RSX), and calls and puts trade in ArcelorMittal SA (MT). Strategy Block: Uncle Mike Tosaw diagonal spreads and when to know the market is at a low. Around the Block: Earnings! Tuesday: Discover Financial Services, Electronic Arts, Goldman Sachs, Interactive Brokers, Microsoft Corporation, TD Ameritrade Wednesday: Abbott Labs, American Express, eBay, Intel Corporation, MB Financial, Morgan Stanley, Northern Trust Thursday: AT&T, Chipotle Mexican Grill, Dunkin Brands, E*Trade Financial, General Motors, Marriott Vacations, Pandora Media, PayPal, Southwest Airlines, Visa, Inc. Friday: American Airlines, General Electric Company, TCF Financial, Whirlpool Corporation
01:07:5219/07/2016
Option Block 539: Transaction Taxes, Call Frenzies, and Fake Dividends
Trading Block: Earnings today include: JPMorgan Chase, Delta Air Lines. Legislation to impose financial transactions tax introduced. Clinton aims "Wall Street" tax at Flash Boys, not banks. Odd Block: Calls trade in ConAgra Foods Inc. (CAG), calls trade in HollyFrontier Corp (HFC) and calls trade in Credit Suisse Group (CS). Mail Block: Listener questions and comments Question from Dmitry: What happens to Leaps for tickers that get delisted before expiration? Question from Mark Davis: Hello, I am a new listener. There was a mention of using covered calls to generate a "dividend". I am having trouble tracking down more information on this. Being still new to all of this, I am hoping to get a clearer picture of how it works. How far out on expiration should I look at to figure the stock price? Thanks! Around the Block: Earnings on Friday include Citigroup, PNC Financial Services, US Bancorp, Wells Fargo
01:02:1115/07/2016
Option Block 538: The Hottest Girl at the Dance
Trading Block: Today we have a specail co-host, Steve Claussen, Chief Investment Strategist, OptionsHouse. What do the all-stars discuss? Earnings today: Alcoa Inc. ATM Straddle approx. $.65-6.5%. The S&P hits new all-time high, Nasdaq above 5,000. CBOE to list SPX Monday-expiring Weeklys Options. Pokemon Go craze sends Nintendo stock soaring. Odd Block: Short-term bulls go shopping at Macy's (M); calls trade in Sprouts Farmers Market Inc. (SFM); calls trade in Lifelock Inc (LOCK), and; puts trade in Deutsche Bank AG (DB) Strategy Block: Uncle Mike Tosaw discusses alternatives to covered call trading. Mail Block: Listener questions and comments Around the Block: Earnings! Wednesday: Yum! Brands, Inc. Thursday: JPMorgan Chase, Delta Air Lines Friday: Citigroup, PNC Financial Services, US Bancorp, Wells Fargo
01:04:0512/07/2016
Option Block 537: Surprise Options Successes and Failures
Trading Block: Post-Brexit market update. OCC Cleared contract volume up 11% in June. The urgency of the Fed to hike has faded away as Brexit further clouded the outlook. SEC approves NYSE request for new market volatility rules. Twitter Poll Options Question of the Week: Which products' performance post-#Brexit surprised you the most? 43%: Volatility (VIX, etc) 0%: Rates (10yr, etc) 52%: Equity Index: (SPY, etc) 5%: FX (GBP/USD, EUR/USD etc) Odd Block: Size call seller in Kinross Gold Corp (KGC), call buyer in General Electric (GE) and put seller in Interval Leisure Group Inc (IILG) Mail Block: Listener questions and comments Question from RazMichaghian: Info on how to set my stock scan on TOS on pre meters? Thank you Question from JViz: Why do people trade options with stock? Why do they buy calls and then sell stock in the same trade? What advantage does that offer? Question from AJones: Shame about Mini options. Great breakdown of the failing that doomed that product. Are there any other products out there that surprised you-either with their success or failure? Around the Block: Friday, July 8: The health of the job market (Non Farm Payrolls Report)
57:4408/07/2016
Option Block 536: Hershey Insiders and VIX Iron Condors
Trading Block: Earnings today before the bell: ConAgra. U.S. lawmakers seek more money, authority for derivatives regulators. CFTC charges ex-Chicago Board Options Exchange director with fraud. Options Question of the Week Twitter Poll: Where will $VIX close on Friday in this first trading week post-#Brexit? #QOTW 6%: Above 25 13%: 22-24.99 22%: 19-21.99 59%: Below 19 Odd Block: Calls go up in Hershey Co. (HSY), call buyers in Mondelez International Inc. (MDLZ), and put spread buyers in Encana Corp (ECA) Mail Block: Listener questions and comments Comment from Frank: @OpenOutcrier He must have ripped off somebody really important then... Comment from BruceX555: Some nimble-footed traders have made a lot on Brexit, and I reckon plenty have lost plenty. Question from Robert K.: Hi, on a debit spread is the most you could lose is your credit? Question from Tor: Hello, I am (restarting) my options trading on a shoestring; any thoughts on mini-options? Thanks. Around the Block: Vol coming in due to holiday weekend. Non-farms next week. Will there be a selloff due to quarter end? Will bonds come down at all? Mike is married....in gold.
50:2501/07/2016
Option Block 535: The Brexit Maelstrom
Trading Block: Brexit provides a review of pitfalls for options and futures traders. Oil extends decline as Brexit fallout spurs market volatility. Could the Fed potentially reverse course and cut rates? Odd Block: Calls trade in Crown Castle Inter. (CCI), puts trade in Starbucks Corporation (SBUX) Strategy Block: Uncle Mike Tosaw discusses how to select the correct collar size. Listener Mail: Listener questions and comments Question from David Shanabrook: Can you check the $AAPL weekly options for this week? Huge open interest (put and call) at $100, $105 accelerated repurchase by Apple? What is the effect? Around the Block: Earnings! Tuesday: Nike, Inc. Wednesday: General Mills, Monsanto Company, Pier1 Imports Thursday: ConAgra Foods
01:02:1128/06/2016
Option Block 534: Should I Stay or Should I Go?
Trading Block: Brexit, Brexit, Brexit! Results due late Thursday night. Tesla owner Elon Musk wants to acquire SolarCity, another company he owns. Gold. Oil. Odd Block: Bull call spreads trade in RiteAid Corp. (RAD), bull call spreads trade in Vanguard FTSE Europe ETF (VGK) Mail Block: Listener questions and comments Question from Robert K.: I would like to use strategy regarding naked puts. If the naked put is far out of money what strategy could I use to protect myself. Could I use some type of order in case it was getting close to naked put strike price. Thanks Question from Tor: Hello. I am (restarting) my options trading on a shoestring; any thoughts on mini-options? Thanks. Question from Cristoff: Do you guys only trade options, or do you trade futures too? How do you decide when to use which? Question from 777: Are you aware of any specific gold arb between Chinese gold derivatives and their U.S. equivalents? Around the Block: Brexit, Brexit, Brexit!
43:3024/06/2016
Option Block 533: Brexit Volatility Annihilation
Trading Block: Brexit: Much ado about nothing? Market rallies and VIX Cash sells off 2 handles, Dow jumps 200 points. Is that it for volatility? Goldman slashes stock demand estimates. Odd Block: Puts trade in Newmont Mining Corp (NEM), calls trade in Credit Suisse Group AG (CS), and puts trade in Community Health Systems (CYH) Strategy Block: Uncle Mike Tosaw discusses iron condors Around the Block: Earnings! Tuesday: Adobe Systems Incorporated, CarMax, FedEx Corporation, La-Z-Boy Wednesday: Barnes & Noble, Bed, Bath & Beyond Thursday: Accenture, BlackBerry Limited, Sonic Corp. RCM Alternatives Event: Beyond The Stock Market: Investing 2.0 Tuesday, June 28, 2016 6:00 pm - 8:00 pm 1871 Auditorium | 222 W. Merchandise Mart Plaza Fl 12 | Chicago, IL The CBOE & Option Pit Professional Traders Summit Wednesday & Thursday July 20 & 21, 2016 (VIP session Friday morning July 22nd) 8:30 am to 5:30 pm Chicago Board Options Exchange | 400 South LaSalle Street | Chicago, IL
01:01:2821/06/2016
Option Block 532: Dead Pro Wrestlers. And Brexit
Trading Block: Fed keeps rates unchanged, lowering odds for future hikes. Weak Nonfarms number derailed any Fed plans to raise in June. Earnings today: (before the bell) Oracle Corporation; (after the bell) the Kroger Co, Rite Aid Corporation. CME Fedwatch tool: July probability: 7% Sep: 29% Nov: 31% Dec: 47% Options Question of the Week: $VIX surging ahead of FOMC, but for how long? Where will $VIX cash close Friday 6/17? 19% - 18-20 range 47% - 15-17.99 range (Winner) 25% - Above 20 09% - Below 15 Odd Block: Calls trade in Activision Blizzard Inc. (ATVI), calls trade in iShares Barclays 20+ year Treasury ETF (TLT) and calls roll in Wells Fargo & Co. (WFC). Mail Block: Listener questions and comments Question from Vegan: For an options newbie, how would I construct a trade with most possibilities to win? I understand that the potential profit might be small. What time frame is good as well? Question from Jim Duggan: FOMC and Brexit are approaching. What are some good ways to use options to play Brexit or FOMC? Question from John Doe: Do you have any specific strategies near or on expiration to profit from theta decay. Around the Block: Brexit coming up on 6/23. Fade it? Buy into it? Much ado about nothing?
01:01:1317/06/2016
Option Block 531: Shady Options Activity in LinkedIn
Trading Block: Today we have a special guest co-host: Steve Claussen, Chief Investment Strategist, OptionsHouse. What's going on: VIX/VVIX surging ahead of FOMC - VIX Cash over 20, VVIX: 117. Suspicious options activity in LNKD/MSFT ahead of deal A group from Silicon Valley has a serious plan for creating a totally new US stock exchange. Options Question of the Week Results: How are you prepping your portfolio for #BREXIT: 23% Buying S&P / Index Puts 27% Buying Vol -VIX, VXX, etc 15% Moving to Cash 35% BREXIT will not happen was the winner, but down from 50% earlier in the week. Odd Block: Calls trade in JPMorgan Alerian MLP (AMJ), calls trade in SunPower Corp. (SPWR), calls trade in Barclays PLC (BCS) Strategy Block: Uncle Mike Tosaw discusses being a bull ahead to the FOMC and Brexit. Around the Block: What are the all-stars thinking about? Earnings This Week: The Kroger Co, Rite Aid Corporation, Oracle Corporation. Federal Reserve Meeting on Wednesday.
01:02:2714/06/2016
Option Block 530: Option Block from a Train
Trading Block: VIX remains somewhat muted heading into FOMC new week as well as Brexit the following week. Billionaire George Soros returns as a Brexit bear. He's also loading up on gold and GLD options, SPY puts. Odd Block: Calls trade in Market Vectors Oil Services ETF (OIH), calls trade in AT&T (T), and calls trade in Marathon Petroleum Corp (MPC). Mail Block: Listener questions and comments Question from JMFarrare: Do you guys have a service that alerts on unusual options activity in the mornings on a daily basis? If not can you direct me to someone that does? Thanks, your website is great! Question from 777: What adjustments should I make when trading options on expensive stocks vs. regular priced stocks vs. cheap stocks. Question from Eric: The last few days I have traded October OIX calls. I made money, but felt like I left a lot of money on the table due to the bid ask spread. How could I have improved on this? Around the Block: Triple witching plus FOMC equals wild week ahead.
57:4810/06/2016
Option Block 529: Options Scandals and Brexit Battles
Trading Block: Market not spooked by Yellen today. Brexit worry has radiated around world as poll puts traders on edge. Odd Block: Calls trade in Calpine Corp (CPN), calls trade in EI Dupont (DD), and calls trade Enterprise Products Partners (EPD) Listener Questions: In which the listeners take over Question from Andy Noble: What do you guys think about this scandal over the super trader? Another black eye for options? Question from Andre Chiles: I am new to the market, but I was wondering if you could help me learn and make some money. Question from Mr. Niggles: Saw the headline link on Options Insider about the stock replacement strategy. What do you think of using this strategy in the current market conditions? Around the Block: Earnings! Tuesday: Michaels, Dave & Busters Wednesday: Lululemon Athletica, Restoration Hardware Thursday: H&R Block
01:01:5207/06/2016
Option Block 528: Staring into the Eye of Sauron
Trading Block featuring guest co-host Todd Rich, President of OM Media (an affiliate of OptionsHouse). Crude oil and energy stocks It is that time of the month - volume time. OCC announced that cleared contract volume in May reached 319,533,636 contracts, a four percent increase from the May 2015 volume of 308,639,215 contracts. YTD average daily cleared contract volume is also up four percent from 2015 with 16,734,689 contracts. Odd Block: Calls trade in Xilinx Inc. (XLNX), calls trade in iShares MSCI UK (EWU), calls and puts trade in Macys Inc. (M), and calls trade in Marriott International Inc. (MAR). Mail Block: Listener questions and comments Question from Niles - Are there any triple witching levels coming soon? If so, how do they influence the options market and expiration? Question from Fred - I kind of hit a wall in my options development. Maybe my focus was too split between learning about futures and learning about options. Are you familiar with the books by Jim Dalton? He wrote a book about options trading but he does not like the greeks and he does not like many conventional options trading strategies. He only uses them when necessary. I guess this is a long way to asking when I should use options vs. futures Question from Jack - Have you ever used the PREM indicator? It is for arbitrage traders. If so, how does it play out in the options market? Around the Block: Non-Farms on Friday (to be released at 7:30 a.m. CDT Friday)
01:03:4903/06/2016
Option Block 527: Dubious Calls and Silly Stupids
Trading Block Featuring guest co-host Nick Howard, Bantix Soybean rundown: Is the collar skew still favorable? Gold rundown: GLD vs Futures options. The SEC has obtained a court order to freeze the profits of a trader who allegedly manipulated a technology stock through a false regulatory filing traced to a computer in Pakistan. Odd Block: Calls trade in WisdomTree India Earnings (EPI); calls trade in CurrencyShares Euro Trust (FXE); puts trade in Royal Bank of Canada (RY) Mail Block Question of the Week: How many US options exchanges will there be at the end of 2016? 1.) 14 2.) 15 3.) More than 15 4.) Less than 14 Question from Ms Fidious: What the heck is a stupid? Question from MDavis82: Just started listening to the show. In one of the first few shows it was mentioned that you can use selling of options to in essence create a dividend on a non dividend stock. Is there more information about this laid out somewhere (puts, calls, how far out, what strike price, what if underlying goes up or down). Thank you and love the show! Around the Block: What's coming up from the Fed? Holiday weekend. What's happening with the ag markets? Brexit and pound skew. Should we sell in May and go away?
01:04:0327/05/2016
Option Block 526: Options on a Sunny Day
Trading Block: Will anything useful come out of the Fed meeting? Will the United Kingdom leave the EU? Bayer offers to buy Monsanto for $62B Odd Block: Calls trade in Comcast Corp (CMCSA), calls and puts trade in Bed Bath and Beyond (BBBY), calls trade in Corning Incorporated (GLW) Strategy Block: Uncle Mike Tosaw discusses how not to force a trade. Mail Block: Listener questions and comments Question from Trader Shawn - With the recent rise and fall of crude oil, is there an options tell that we can use intraday to see when these movements are setting up? Question from T. Nguyen - G'day Options Insider! Just wanted to know if the members of the Option Block panel ever make use of offline options position modeling software and if so, which would be their recommendations and why? What about tablet/phone apps that model option positions? I am frequently in transit and do not always have the luxury of an internet connection to access my brokerage account, but I love testing and modeling positions, hence the question. Cheers Around the Block: Earnings: Retail Earnings Parade Continues Tuesday - Best Buy Co, Inc., DSW Inc., Hewlett Packard Enterprise Company, Intuit, Kirklands Wednesday - Costco, Express, Guess?, Lions Gate Entertainment, Popeyes Louisiana Kitchen, Tiffany & Co, Williams-Sonoma Thursday - Sears (before bell), Abercrombie & Fitch, Burlington Stores, Dollar General, Dollar Tree, GameStop, Movado, Ulta Salon Friday - Big Lots
58:1324/05/2016
Option Block 525: Causing Confusion and Delay
Trading Block: Earnings Thursday (retail heavy) After the bell: Gap, Inc., Ross Stores, Shoe Carnival, Before the bell: Wal-Mart, Dick's Sporting Goods, HH Gregg, Stein Mart, The Bon-Ton Stores Stocks to watch: Wal-Mart, Monsanto, Advance Auto Parts, Tesla, Urban Outfitters. This S&P 500 Death Cross could be the real deal. Odd Block: Calls trade in Kinross Gold Corp (KGC), call buyers trade Coeur Mining Inc. (CDE) and puts trade in Market Vectors Gold Miners (GDX) Mail Block: Listener questions and comments Question from 777 - With commodity based ETF options - anyway to trade roll risk? Around the Block: Earnings on Friday- Campbell Soup Company, Deere & Company, Foot Locker Inc. Rate hike watch: key dates and data.
01:00:3820/05/2016
Option Block 524: From Footloose to Options Trading
Trading Block: Weekend Review: VIX Options and Futures 5/9 through 5/13. Has VIX bottomed? Yen volatility surges as Central Bank meetings loom. Hedge funds are not what they used to be. Odd Block: Puts trade in Twitter Inc. (TWTR), puts trade in Materials Select Sector SPDR (XLB), and puts trade in CF Industries Holdings inc. (CF) Strategy Block: Uncle Mike Tosaw discusses ratio spreads and sector investing. Mail Block: Last week, the options question of the week was "What is your favorite options trading film?" TWTR weighed in with the following: 69% Trading Places 23% Rogue Trader 8% Quicksilver and Mark B. offered up 9 1/2 weeks because Mickey Rourke was an arbitrageur. Have you ever used the FCOJ scene from Trading Places to explain to people what you do? Around the Block : Where will we see SPX, GLD, crude this week? Fed on Wednesday.
57:4117/05/2016
Option Block 523: How to Get Caught Cheating
Trading Block: S&P was all over the place, to settle down only 0.2%. A little flip on volatility. Apple is no longer the most valuable company in the world. Will online retailers take over retail stores? Are malls dead? Monsanto cheater, could you be more obvious? Odd Block: Big call buying in JNK, massive long-term call buying in JD, and UPS calendar put trades. Around the Block: Bears mini camp. Retail sales numbers. Standard options expiration next week.
34:2413/05/2016
Option Block 522: Options Civil War
Trading Block: Options Civil War: Which side are you on? Earnings today before the bell: Tyson Foods, Liberty Media Group, Sothebys. Traders on edge as Staples-Office Depot deal decision looms. Are markets more sensitive to the Fed these days? Stocks to watch: LendingClub, Krispy Kreme, Freeport-McMoRan, Valeant. Odd Block: Call roll in American Capital LTD (ACAS), buying time call stupid in Nokia Corp (NOK), and put spread buyers in JPMorgan Alerian MLP Index (AMJ). Strategy Block: Tosaw discusses long-dated covered call writing Mail Block: Which Team are you on? 29% - Team Cap 71% - Team Iron Man Listener questions: Question from 777 - Have you heard any rumors that CME or CBOE will be acquired by a bank or insurance company? Question from SkyTrader - If I see a trend, what spread works best for capturing that spread - straight vertical or calendar? Around the Block: This week the big retailers take the earnings stage, and names include: Tuesday - Electronic Arts, Walt Disney Company, Dean Foods, Credit Suisse, Allergan Wednesday - Macy's, Wendy's Thursday - Kohls (before bell), Nordstrom (after bell), Shake Shack Friday - JC Penney, Honda
59:3210/05/2016
Option Block 521: TSLA and BABA Straddle Battle
Trading Block: Earnings "Straddle Battle" pitted Tesla against Alibaba. Who won? Other interest in Blizzard, XLE Odd Block: OTM call buyers in Weatherford International PLC (WFT), long-term collar trades in Market Vectors Oil Services ETF (OIH), and put spread trades in SPDR S&P Metals and Mining ETF (XME). Mail Block: Listener questions and comments Question from Oarmin333 - Hi. I have been learning and using MProfile for a year now, all on an intraday basis using futures, mainly ES. I would like to expand my time horizon a bit to a few days to a few weeks. I have a 25k account I am working with. I understand the mechanics of futures, but I am considering using options due to longer holding periods, specifically being long premium, due to the defined risk. I am really not interested in selling options. Some people say that buying options is a fools errand and better to sell spreads, other say they only buy premium. I am not sure which way to go. If I hold for longer periods, I have to cut size way down in futures, which is fine. However, If I get good at options, there is a lot of flexibility. I am a discretionary trader and a directional trader. I would love to get your opinion on the matter, if you do not mind. Thanks a bunch! Also I can still play intraday moves with weekly options if I see that opportunity. If I am good at picking direction, can simple long/calls (non spreads) be a viable option, no pun intended. Question from Billy Boy: What's your opinion on the binary options from Nadex? Question from Flyer: What are the first steps to learn about options? Around the Block: Earnings! Friday: Cigna Corporation
01:02:2206/05/2016
Option Bbock 520: Imagine an Apple Tesla Mashup
Trading Block: What is going on in the market? Options #QuestionOfTheWeek: Earnings Straddles - $AAPL(4.5%), $FB(7%) & $AMZN(8%). Which will be the most accurate? 45% Facebook - Close $108.89 (Straddle. $7.62) - Open $119.57: Difference. $10.68 / 9.8% - Missed by 40% 29% Amazon - Close $602 (Straddle. $48.16), Open $666 - Difference. $64 / 10.6% - Missed by 33% - WINNER!! 24% Apple - Close $104.35 (Straddle.$4.70), Open $96 - Difference. $8.35 / 8% - Missed by 77% 02% Other Earnings Straddle Battle: TSLA - $241.75, Approx. 8.3% BABA - $4.70, Approx. 6% Odd Block: Call buyer in Direxion Daily S&P 500 Bear 3x Shares, call buyers in Weatherford International PLC (WFT), and put buyers in Cabela’s Inc (CAB). Strategy Block: Uncle Mike Tosaw discusses selling a put to get into a stock Around the Block: Earnings! Tuesday - CVS Health, Pfizer, Etsy, Avis Rental Car, Hyatt Hotels, GrubHub, Spring Corporation, Starwood Hotels Wednesday - Tesla, Whole Foods, Merck & Company, Priceline Group, Zynga, Anheuser-Busch InBev, Kraft Heinz, FITBIT Thursday - Alibaba, Occidental Petroleum, Chesapeake Energy, Friday - Cigna Corporation On the economic calendar this week are the ISM manufacturing index, international trade data and jobless claims on Thursday. Lastly, the week ends with the all-important monthly employment report for April.
01:01:1403/05/2016
Option Block 519: OptionsXpress CEO Joins the All-Star Panel
Xpress Block: We have special guest co-host: Barry Metzger, CEO
of optionsXpress. He discusses:
The latest developments at OX.
Interesting platform upgrades and tech overhauls
What are the OX clients trading during the height of earnings
season?
Any interesting customer questions/feedback?
Trading Block: Options Traders Brace for Amazon Earnings. Amazon
at $612.60. ATM straddle $49, approx. 8%. LinkedIn Corporation -
$123. ATM straddle $16.20, approx. 13%. Earnings before the bell:
CME, Coca-Cola, Ford Motor Company, Honda Motor Company, MasterCard
Incorporated, MSCI Inc, Time Warner Cable, United Parcel Service,
Viacom Inc. It was a rough week for Apple - $96.20 today. Stock
crushed post-earnings, opened down $8.35 or 8%. Icahn bails out on
Apple stock. Nasdaq mulls new exchange to ease trading in illiquid
ETFs.
Odd Block: Calls trade in Methanex Corp (MEOH), calls and stock
trade in Ebay Inc. (EBAY), and calls trade in KKR and Co.
(KKR).
Mail Block: Listener questions and comments
Question from Mohammed - Hi Mark! The Options Insider website
is superb resource for new and experienced options traders. I know
your weekly newsletter you folks you report significant/unusual
done options trading activity across stock and ETFs. After
searching on your site and overall online, I have found it quite
difficult to locate a website which details some of the terminology
used when describing the large blocks traded (e.g. "price
variation"). If you could compile a glossary or an overview of how
to view/assess options order flow that would be excellent. Keep up
the great work! Thanks.
Question from Maha - How difficult is it to become a successful
options day trader?
Around the Block: A review of after-hours prices for LNKD, AMZN.
Earnings parade continues with CBOE and XOM. Will the Icahn dump of
AAPL have a longer-term impact. Central bank flim flammery.
01:05:2829/04/2016
Option Block 518: Earnings Preview: AAPL, AMZN, FB and More
Trading Block: Stocks drop ahead of earnings onslaught. Traders
may just be forced to unwind all those VIX bets.
Earnings today before the bell: Xerox, Haliburton
Earnings today after the bell: The Container Store
AAPL - ATM straddle: $4.90, approx. 4.6%
FB - ATM straddle: $8, approx. 7.2%
AMZN - ATM straddle: $49.50, approx. 7.9%
Odd Block: Calls trade in Health Care SPDR (XLV), calls trade in
BankRate Inc. (RATE), and calls trade in Dollar Tree Inc (DTLR)
Strategy Block: Uncle Mike Tosaw discusses dollar cost
averaging.
Around the Block: Earnings!
Tuesday - Apple, Fiat Chrysler, 3M Company, Ally Financial,
Buffalo Wild Wings, Canon, Chipolte Mexican Grill, ebay, Eli Lilly
& Co, Hershey Company, JetBlue, Office Depot, Panera, Procter
& Gamble, Spirit Air, Whirlpool
Wednesday - Facebook, Boeing, Hilton, Nasdaq, Six Flags,
Speedway Motorsports,
Thursday - Amazon (after bell), Ford Motor Company (before
bell), CME (before bell), Coca-Cola (before bell)
Also, the Fed breaks from its two-day policy meeting Wednesday
at 2 p.m. ET and investors around the globe will be watching to see
what the U.S. central bank says about the timing of its next
interest rate.
01:01:2126/04/2016
Option Block 517: Mega Earnings Spectacular: GOOG, MSFT, SBUX and More
Trading Block: Earnings! Thursday - (Before the Bell): General Motors Company, Southwest Airlines, Under Armour, Verizon Communications; (After the Bell): Microsoft, Alphabet Inc., E*Trade Financial Company, Starbucks Corporation, Visa Inc. MSFT - $56, ATM Straddle $2.37 - approx. 4.2% GOOG - $756.40, ATM Straddle $41.50 - approx. 5.5% SBUX - $60.77, ATM Straddle $2.25 - approx. 3.7% Odd Block: Call spread buyers in Marathon Petroleum Corp (MRO), call buying in Tronox Ltd (TROX), and paper buying in Kilroy Realty Corp (KRC) Mail Block: Listener questions and comments Question from Nick C.: Heard any chatter about CME or CBOE leaving Chicago? Question from Bob: Is the options market the most transparent financial marketplace? Question from Willy: What does the Option Block crew think of the TOS platform? Do you like it for pricing volatility and analyzing the Greeks? Around the Block: Earnings on Friday - American Airlines, Caterpillar, General Electric Company, Honeywell International, Kimberly-Clark Corporation, McDonald’s Corporation. This Week in the Market: Monday - National Association of Home Builders' Housing Market Index Tuesday - Commerce Department releases new figures Wednesday - National Association of Realtors existing home sales data Thursday - Weekly jobless claims from the Labor Department
59:0722/04/2016
Option Block 516: Dueling NFLX Butterflies
Interview Block: Today we are joined by special guest Mal Clissold President and Owner of SCC Capital Group, LLC. We discuss: How frequently and with what percentage do they delve into the individual stock world? What positions do you have that are designed to protect and potentially profit against a major one-day move? What kind of fund does he run? How does he control risk for his positions? What attracts him to a short vol position? What does he have on that he really likes right now? Trading Block: Earnings today after the bell: Netflix. Earnings today before the bell: PepsiCo, Hasbro, Morgan Stanley. Options traders brace for another big move for Netflix shares. Stocks to Watch: Pepsi, Chiasma, Hasbro, Morgan Stanley. Odd Block: Calls trade in The Carlye Group LP (CG), giant call roll in - Western Gas Partners, LP (WES), and upside calls trade in - AK Steel Holdings Corp (AKS). Strategy Block: Uncle Mike Tosaw discusses the importance of diversification. Around the Block: Earnings! Tuesday - Intel Corporation, Discover Financial Services, Goldman Sachs, Interactive Brokers Group, Johnson & Johnson, TD Ameritrade, Yahoo, Inc. Wednesday - Coca-Cola Company, Abbott Laboratories, American Express Company, Mattel Thursday - Before: General Motors Company, Southwest Airlines, Under Armour, Verizon Communications; After: Microsoft, Alphabet Inc., E*Trade Financial Company, Starbucks Corporation, Visa Inc. Friday - American Airlines, Caterpillar, General Electric Company, Honeywell International, Kimberly-Clark Corporation, McDonald’s Corporation
01:02:1219/04/2016
Option Block 515: The Many Joys of Limit Display Rules
Trading Block: U.S. stocks fluctuate on earnings a crude oil retreats with gold. CITI before the bell tomorrow. Stock = $45, ATM straddle - $1.40 / approx. 3%. CME traders say chances of April interest rate hike are zero. Earnings: Thursday (all before bell) - Bank of America, Wells Fargo, Delta Air Lines, PNC Financial Services, BlackRock. Odd Block: Calls trade in Kate Spade Inc (KATE), puts trade in Seagate Technology PLC (STX), and calls trade in Freeport-McMoran (FCX) Mail Block: Listener questions and comments Question from AJ M. - I hope you guys can calm my frayed nerves over this DOL thing. What exactly is going on? Am I not going to be able to sell calls in my IRA anymore? Since the vast majority of my assets are in retirement accounts this would be a HUGE hit to my savings. Please tell me this is not the case. Is there anything I as a retail stock and options trader can do to help prevent this? What if I open an international trading account? Would that do the trick? Help - I need you guys to talk me off the ledge. Question from Jeremy M. - Hey Folks: I thought this might be a great question for The Option Block: Would you mind talking about the "Limit Order Display Rule: Exchange Act Rule 11Ac1-4." How it can help the retail investor? How the rule is applied to SPX and VIX options? When reading the actual rule, it can get a bit confusing because its talking about "odd lots" and "block size order," etc. Would be good to get your take on it. Perhaps the Rock Lobster may have an interesting perspective as a former market maker. Great program! Cheers, JM Around the Block: This Week in the Market Apr 15: Consumer Sentiment Earnings on Friday - Citigroup
58:4915/04/2016
Option Block 514: The Many Flavors of Skew
Trading Block: The fear gauge just hit an all-time high. Turbulence for Delta Air Lines, Inc.: Two earnings trades for DAL stock. Under Armor selling off over 5% today, and over 50% since last week. Earnings today after the bell: Alcoa, Bank of the Ozarks
Odd Block: Calls trade in SPDR GLD Gold Trust (GLD), puts trade Avon Products, Inc (AVP), and calls trade in Steel Dynamic, Inc (STLD)
Strategy Block: Uncle Mike Tosaw selling a call spread against a stock you own vs. selling a covered call.
Mail Block: Listener questions and comments
Twitter Conversation/Question from @4tee7 - Time to heavy my position $UA #masters #jordanspeith #chef #curry #goldenstate #dubnation. @jfhotte Apr 8 @4tee7 UA was overbought already before the split. I see the stock @ 38$ next week @4tee7 3h3 hours ago @jfhotte, good call (sold the class c shares before I felt too much pain), get back into class A once the dust settles $ua @4tee7 I do not understand man... My puts premium at 1.5 day before split.. Today stock is down 4.5% and my option is worth 1.4 ...thoughts? @jfhotte I got nothing, you should collecting on that one??? Is there a trade cost (whose the broker)? @4tee7 what I got after split UA1160715P70 (UA1) it is up only 15% today while the stock down 5%, does not make sense.. @sellputs @Options @jfhotte @sellputs @Options let me know when you find out, I am curious
Question from Fayecuzername - Hey all, quick question. I am a hopium addict at times. Andrew discussed puts and stock, rolling down the put as the stock drops. Is the play to buy stock with the proceeds and dollar cost average or use the proceeds on another trade? This assumes you continue to like the stock. Thanks, you all are my trading methadone.
Around the Block: There is still time to make IRA contributions
01:01:1812/04/2016
Option Block 513: Why, Why, Why
Trading Block: Today we are joined by Nick Howard, Founder & CEO of Bantix Technologies, LLC, and creator of QuikStrike. Stocks tumble amid choppy start to April; Dow drops more than 150. OCC gratified by changes to DOL fiduciary rule that benefit users of listed options. Ally Financial jumps into brokerage business. Earnings: Thursday - Rite Aid, CarMax, ConAgra Foods (all before bell).
Odd Block: Calls trade in Crown Castle Inter. (CCI), calls and puts trade in iPath S&P 500 VIX mid term futures (VXZ), and calls trade in PowerShares DB US Dollar index ETF (UUP).
Mail Block: Listener questions and comments.
March Madness Poll: TradeKing was the final winner. Also, big congratulation to all our contest winners.
Question from MJHill - Earnings season is approaching. What are your views on using an ATM long straddle as an earnings play? I plan on buying the ATM straddle about a week before earnings and closing the position the day before earnings are released. I am hoping to make some money on the increased volatility that comes immediately before earnings, but would like to hear your opinions.
Around the Block: This Week in the Market: The first full week of April and of the new quarter gets under way as the Federal Reserve releases the minutes from its last session. A new round of quarterly earnings is not far off.
01:03:5808/04/2016
Option Block 512: Do Not Smoke the Hopium
Trading Block: March Madness Poll - Winner: TradeKing, which (beat Interactive Brokers in the finals. Drawing winners will be announced on Thursday's Option Block. An update on March options activity from ISE. OCC cleared contract volume up 4% in March. CME Group notches record ADV in Q1, while FX volumes fall. Stocks to Watch: Apple, Tesla, Alaska Air, Intel, Brocade.
Odd Block: Calls trade in Nike Inc. (NKE), calls trade in KKR & Co. (KKR), and calls trade in Reynolds American, Inc (RAI).
Strategy Block: Uncle Mike Tosaw discusses the importance of knowing your exit in a trade before your entrance.
Mail Block: Listener questions and comments
Question from Bruno - Unusual activity in CPD puts. The customer bought and the stock rallied the next day. Does UA actually predict anything?
Around the Block: Earnings!
Tuesday - Walgreen's, Darden Restaurants, International Speedway Corporation
Wednesday - Bed, Bath & Beyond, Constellation Brands, Monsanto Company
Thursday - Rite Aid, CarMax, Con Agra Foods
This Week in the Market:
The first full week of April and of the new quarter gets under way as the Federal Reserve releases the minutes from its last session. A new round of quarterly earnings is not far off.
Apr 4: Factory Orders
Apr 5: International Trade, JOLTS
Apr 6: FOMC Minutes
Apr 7: Jobless Claims
01:00:0705/04/2016
Option Block 511: Revenge of the Time Combo
Trading Block: March Madness Poll - Vote today for TradeKing or E*Trade to find out who will go to the finals against Interactive Brokers, who beat OptionsHouse to make the final round. Stocks higher as the end to a rocky quarter nears. Yellen killed the strong dollar rally. Stocks to watch: Tesla – new electric Model 3 unveiled today. A modest rally for Tesla – up only 5% intraday. Lululemon – earnings announced yesterday and stock looks good, trading up about 10% post-earnings. Odd Block: Calls and puts trade in Dynavax Technologies Corp. (DVAX), calls trade in SPDR Homebuilders ETF (XHB), and calls and puts trade in Pure Storage, Inc. (PSTG). Mail Block: Listener questions and comments Question from Gabe Rich: Mark, this is weird; huge buys for $INTC Apr 33 calls and the IV goes down?! I thought the market makers will push the price up when more buyers are around demand/supply. Thanks, I thought you might explain this since you are a former $INTC market maker. Question from 777 - with commodity based ETF options - anyway to trade roll risk? Question from Flyguy - If I sold a put $1 on Jan 16 with a current trading price of $.50 and stock goes to $5 -what happens and what is my risk? Around the Block: What’s coming up in the week ahead? Thursday - The USDA Prospective Plantings report will provide the official estimate on what farmers across the United States are planting this year. Friday, April 1 - The biggest economic release of the month, the Employment Situation Report, will hit newswires before the market opens on Friday. Earnings: Blackberry
58:3701/04/2016
Option Block 510: Trading Size Stupids in VIX
Trading Block: A bull market in the S&P 500 goes AWOL as history rewards patience. Could Jan. 1, 2018 become the next "Perfect Banking Storm"? Appeals court upholds determination that CBOE patents are invalid. Stocks to Watch: Pandora, Avon, GameStop, Cal-Maine Odd Block: Selling paper in The CBOE Volatility Index (VIX), Aug call buyer in iShares FTSE/Xinhua China 20 ETF (FXI), and strange seller in Pinnacle Foods Inc. (PF) Strategy Block: Uncle Mike Tosaw discusses diagonal call spreads. Mail Block: Listener questions and comments Question from Mike G. - Hello, Mike here. My father got me into selling covered calls by keeping me interested in his trading as a child. Recently, I started learning about other strategies and started listening to programs on the options insider radio network. Thanks. I recently convinced my father to use collars as opposed to simple covered calls, and I am starting to use long deep in the money leaps instead of stock to cover my calls. I have two questions. Given that I can use calls to cover my calls, is there any benefit to owning the underlying? Thanks a lot. Comment from Fayecuzername - Listened to episode 509 today. The listener question about Viceroys favorite Andrew butterfly answer is from episode 389. In the mail block I asked about a fly on expiration date and Andrew set me straight. Around the Block: Earnings! Tuesday - Dave & Busters Wednesday - Lululemon Athletica, Micron Technology, Carnival Corporation, Paychex. Friday - BlackBerry. This Week in the Market: Tuesday - Janet Yellen speech to the Economic Club of New York Thursday - The USDA Prospective Plantings report will provide the official estimate on what farmers across the United States are planting this year. Friday, April 1 - The biggest economic release of the month, the Employment Situation Report, will hit newswires before the market opens on Friday.
01:00:2329/03/2016
Best of Option Block: Theoretical Value & Implied Volatility
It may be a trading holiday, but you still need your Option Block fix, right? We dug through the archives to bring you some of the best of Option Block. This episode was posted in November, 2015.
45:2825/03/2016
Option Block 509: Phenomenally Ingenious Tree Trade
Trading Block: The most up-to-date result of our March Madness Poll. Stocks to Watch: Valeant, Tesla, Starwood, Marriott, Markit, IHS. Stocks dip, dollar advances in wake of Fed comments.
Odd Block: Bullish call action in iShares Dow Jones US Homebuilder ETF (ITB), upside call buyer in Kraft Heinz Co. (KHC), and christmas put tree in US Steel Corp (X).
Strategy Block: Uncle Mike Tosaw discusses out-of-the-money call buying.
Mail Block: Listener questions and comments
Question from Groose - Regarding Eurodollar futures options, are there different quirks between the months?
Question from Trunghi Nguyen - Hey, hello Options Insider. Big fan of al of your work - listen to your shows all the time. Many Option Blocks ago, (around the Viceroys last show before he left, may have been his last show) he mentioned a past show where the Rock Lobster discussed how to trade a butterfly at expiration, and Alex thought it was pure gold. I cannot recall what type of butterfly trade it was, i.e. standard, iron, or broken wing, but Alex seemed impressed by Andrews explanation. Unfortunately, I have not been able to locate which episode this was aired on. Any chance you can find out and let me know? Love your work - when it comes to Options Insider, I go long.
Comment from Joseph A. - Good morning Options Insider. Wanted to stop by and say thank you for providing me and many others with a free source of invaluable knowledge. I hope you do not mind, but I shared your page with a couple of trading groups that I am a member of. Thank again - happy trading!
Around the Block: Earnings!
Tuesday - Nike, Krispy Kreme Donuts
Wednesday - General Mills
Thursday - GameStop (after bell), Signet Jewelers (before bell), Cosi (after bell)
01:00:1123/03/2016
Option Block 508: The Lobster Flies Solo
Trading Block: U.S. crude options volatility sinks as prices bounce off Feb lows. CBOE to list options on FTSE 100 and China 50. Options traders prepare for "worst of all worlds".Fed scales back rate-rise forecasts as global risks remain. Earnings after the bell: Adobe Systems Inc., Aeropostale Odd Block: Calls trade in iShares MSCI Emerging Markets ETF (EEM), calls trade in Genesis Energy LP (GEL), and calls trade in Technology SPDR (XLK) Mail Block: Listener questions and comments Question from Alex - Mark and the Options Block Dream Team, I have to keep it going in the same spirit since this is extremely educational and I am still not converted to shorter term selling. I was unfair to ask such a broad question so I will try to be as specific as possible. Let's revisit why I shorted 1y 25d (cash-secured) Put Option Vol was at its 2 year high (~57%). Vega($70/bp) further out is much higher than shorter term. Example: 14bp drop in 1 year Vol would result in an easy $1000(6% yield) profit in my strategy where 15% yield is if the option expires worthless. A similar kind of theta($5.55/day) premium of $1000 would require around 180 calendar days. Clearly theta premium collection is not interesting in my strategy (yet). Gamma is virtually 0 and hence the underlying needs to both trend down and Gap sharply (30%+) before I need to start worrying. Most likely the next time the underlying will GAP down significantly is during earnings. Hence I can either avoid the period around earnings (close prior to earnings and reopen after) or gamble and keep my position through and essentially taking a risk of becoming a 'long term' investor with the underlying being in high 70s and then do a Wheel of Fortune kind of strategy on it. Speculation aspect of my simple strategy - 1) Volatility will mean revert down 2) I strongly believe that this is a Side-Ways year for the entire US Market including the technology sector. Hence I believe I can capitalize on this speculation if I extend further out in my short selling. Regarding Baby Sitting question. I can do some low frequency rolling on the Delta. I have done once already. I agree there is nothing much else to do here. Lets forget about Shorter Term Selling and Theta Premium for a second and its nice exponential properties near expiry. The follow up question is which is hopefully more particular: are there any practical ways of locking in on Vega Premium for a longer term Short Puts? Vol dropped 7bp since I entered but there is room for much more. I understand that drawing a line in the sand (say I close when vol drops to 40s or 30s) is a very good and practical way. But are there any other ways to lock in some Vega premium without fully closing on the strategy? My background. I am a hardcore Quant guy who understands the theoretical part of Options valuation and Greeks inside out including some very exotic derivatives structures(calendar year asian options, swaptions, generation assets etc). That said, ironically, most folks like me are not very good with the practical aspects of Options trading so I hope I am not dumbing down the show with my impractical questions smile emoticon. Cheers, Alex. Around the Block: Earnings on Friday in Tiffany & Co.
43:0118/03/2016
Option Block 507: Waiting for a Bonehead Political Soundbite
Trading Block: ICE would keep London Stock Exchange if it bought LSE Group. Fed to sit tight on rates at March meet, hint at hikes to come. Earnings today before the bell: 3D Systems Corp.
Odd Block: Put buying in Banco Bradesco SA (BBD), 1-by-2 put spread in CarMax Inc. (KMX), and calls trade in Delta Air Lines Inc (DAL).
Strategy Block: Uncle Mike Tosaw discusses short put spreads.
Listener Mail: Listener questions and comments
Question from Bob - I have heard pros say that when too many retail jump into a trade, then do the opposite - Does that apply to options as well?
Question from 777 - What are the industry sectors least positively correlated to the major indexes? Are there any quirks to trading those using options?
Around the Block: Earnings!
High expectations for Adobe earnings, not so much for Oracle.
Tuesday - Oracle Corporation, Constellium, DSW, Gerdau, HD Supply
Wednesday - FedEx Corporation, Williams-Sonoma
Thursday - Adobe Systems Inc., Aeropostale
Friday - Tiffany & Co.
45:0515/03/2016
Option Block 506: Uncovered Covered Calls and IRA Options Debate
Trading Block: Big news today from an options exchange perspective: Nasdaq announced it has agreed to acquire International Securities Exchange (ISE), an operator of three electronic options exchanges, from Deutsche Borse Group. Investors greeted the Nasdaq deal to buy International Securities Exchange, the US options business of Deutsche Borse, with some skepticism on Thursday, sending Nasdaq shares down as much as 3.5 per cent. Earnings: Dollar General Odd Block: Calls trade in Club Corp. Holdings Inc. (MYCC), puts trade in Peabody Energy Corp (BTU), and calls and puts trade Hilton Worldwide Holdings Inc (HLT) Mail Block: Listener questions and comments Twitter: The Options Insider- With a potential ban on trading options in IRAs looming - Tell us how you trade options in your IRA right now? Question from Alex - In OptionBlock503, we agreed that while it is very unusual, the 25D 1Y Cash-secured Put was entered for all the right reasons. The follow up question is then. What are the various practical ways to Risk Manage/Baby Sit a Long Term CashSecured Put under different scenarios of the underlying (underlying is trending up, down or sideways) and for different regimes of volatility? Cheers. Around the Block: This Week in the Market Mar 10: Jobless Claims, Treasury Budget Mar 11: Import and Export Prices
01:00:2011/03/2016
Option Block 505: Just Buy Upside Calls
Trading Block: Goldman Sachs sees best time in two decades to buy S&P 500 calls. Traders are betting the Federal Reserve will next raise U.S. short-term interest rates about six weeks earlier than previously thought, after the government reported U.S. employers added many more jobs than expected in February. Earnings today after the bell: Shake Shack.
Odd Block: Calls trade in Alcoa Inc. (AA), puts trade in Linn Energy LLC (LINE), and calls trade in VALE SA (VALE).
Strategy Block: Uncle Mike Tosaw discusses getting back into a trade you got out of, that has continued to go your way since.
Mail Block: Listener questions and comments
Question from FlyGuy - Do I day trade options anymore?
Around the Block: Earnings!
Tuesday - Barnes & Noble, Dick’s Sporting Goods
Wednesday - Vera Bradley
Thursday - Dollar General
This Week in the Market:
Mar 9: EIA Petroleum Report
Mar 10: Jobless Claims, Treasury Budget
Mar 11: Import and Export Prices
01:01:5008/03/2016
Option Block 504: What Makes a Butterfly Take Flight?
Trading Block: Continued relief rally. VIX now has a 16-handle. Huge contango in the VIX. Who blew the all-clear signal? Cage match in junk stocks. CBOE reported that total trading volume in February was 92.9 million contracts. OCC announces cleared contract volume increased in February. OCC announced that total cleared contract volume in February was 338,300,969 contracts. . Why CME would want to buy the London Stock Exchange? Why buy when you can make your own? What is Europe going to do?
Odd Block: Puts trade in Chesapeake Energy Inc. (CHK), puts trade in iShares Barclays 20+ year Treasuries (TLT), and calls and puts trade in Boardwalk Pipeline Partners (BWP).
Strategy Block: In his first ever strategy block, Andrew discusses what makes a butterfly take off.
Mail Block: Listener comments and questions
Question from Adam - Thank you for your shows. I am wondering if you know where can I get p/c ratio and call sizzle index and out sizzle index history? I use TOS but this info is not available for the past. Thanks
Question from FutureMD - Is there a directional options strategy that you would suggest for someone who wants to play the 2016 election?
Around the Block: Earnings! Friday - Staples, Big Lots
This Week in the Market
Mar 3: Jobless Claims, Factory Orders
Mar 4: Unemployment Report
36:0404/03/2016
Option Block 503: Tried and True Beats Bold and New
Trading Block: Traders are now taking the possibility of a Trump presidency seriously. What was once thought to be a flight of fancy is moving ever closer to becoming reality, with one of the real estate moguls rivals, Texas Senator Ted Cruz, declaring that Trump may be "unstoppable" if he dominates the upcoming Super Tuesday contests. Gold allure burnished by Fed outlook as treasuries lag: analysis - U.S. Treasury 10-year futures may continue to underperform gold over the medium-term in a global fixed-income environment punctuated by negative rates as the relative opportunity cost of holding the yellow metal decreases. Stocks mixed as oil prices rise above $33 a barrel - Stocks were mixed in lackluster trading Monday as oil prices rose and global stocks fell after a meeting of G20 finance officials ended without pledges for joint action to stimulate sagging global economic growth. Earnings today: Crocs, Inc. (before) Hertz Global Holdings (before) AMC Entertainment Holdings Icahn Enterprises Lumber Liquidators Holdings Tribune Media Company Odd Block: Calls trade in Charles Schwab (SCHW), calls trade in Enbridge Inc (ENB), and calls trade in Signet Jewelers Ltd (SIG) Mail Block: Listener questions and comments Question from Alex - Mark, Thanks again for covering my question. I agree that I am not capitalizing on the Theta curve as much (although $5.3/per day is also decent). However my intention was more to capitalize on the Vega Surface where Vega tends to be much higher at longer maturities and it was especially bloated during the earnings date when volatility spiked to the highest ever level. Given that the Volatility levels are at its highest then Vega itself is expected to be at its highest ever. That said I am not really set-and-forget strategy and collect on theta premium. I just have to wait until the volatility normalizes for LNKD and collect on a decent Vega premium. In a sense I am shorting both Volatility and Vega. Hence further out months give richer Vega to short. And if i were to write shorter maturity puts, then Vega would have lost its juice in a month or two. As a side note, I entered into a CashSecuredPut, I do not trade on margin yet. Yield is approximately 15%. It would be a separate exercise to compute the Vega surface for LNKD. Maybe this question is an overkill for the show but at least this were some of my reasons why I shorted a 1-year put. Cheers, Alex Question from JM - Hey Folks. I thought this might be a great question for The Option Block: Would you mind talking about the "Limit Order Display Rule: Exchange Act Rule 11Ac1-4." How it can help the retail investor? How the rule is applied to SPX and VIX options? When reading the actual rule, it can get a bit confusing because its talking about “odd lots” and "block size order," etc. Would be good to get your take on it. Perhaps the Rock Lobster may have an interesting perspective as a former market maker. Great program! Cheers, JM. Question from 777 -Do I trade Eurodollar futures options? what drives massive OI? Question from TradersOM - Can a trader make a decent living buying calls and puts - or do you have to get crazy with the complex stuff like iron condors? Around the Block: Earnings! Tuesday - JD.com Ross Stores Wednesday - Costco Wholesale Corporation, American Eagle Outfitters, Goldman Sachs, Tribune Publishing Company Thursday - Kroger, Alamo, Barnes & Noble, Burlington Stores Friday - Staples, Big Lots
56:5601/03/2016
Option Block 502: Is Put/Call Worthless
Trading Block: Gold goes for a ride. SeaWorld earnings today after the bell and taking it on the chin. Off approx. 9%.
Odd Block: Calls and puts go up in Restoration Hardware Inc. (RH), call spreads go up in Marathon Petroleum Corp. (MPC), and puts go up in Cypress Semiconductors (CY).
Mail Block: Listener questions and comments
Question from Matt M1000 - Hello Mr. Longo and All Star Cast. I have been enjoying The Option Block and Volatility Views shows for years. You guys are the best! Keep up the great work! I would like you folks to discuss the "put-call ratio"...its use and merits as a tool. I have always discounted this metrics value, since both put and call options could be either bearish or bullish depending on how they are being used (i.e. purchased or sold). So what logic I have leads me to believe a put-call ratio would be pointless. Set me straight on this please. -Beanbag.
Question from SkyTrader - If I see a trend, what spread works best for capturing that spread - straight vertical or calendar?
Around the Block: Earnings!
Friday - JC Penney Company, Hilton Worldwide
This Week in the Market
Feb 26: GDP, Consumer Sentiment
01:00:0726/02/2016