The implied correlation indices measure the correlation between the implied volatility of long-term S&P 500 index options and the implied volatilities of long-term options for the top 50 individual stocks in the index.
Stocks enjoyed a substantial run in September. In fact, it was the best September in most of our lifetimes.
NetApp, Inc. (NASDAQ: NTAP) may have been trading up, contrary to the prevailing market sentiment on Monday, but the shares are starting to see an increased trading in put options as investors may be hedging gains or possibly that the company has become too large to be a takeover candidate in the consolidating technology sector.
I don't think many traders follow the CBOE's implied correlation index, but lately it's been on the rise.
First it was monthly options. Then came weekly options expiration dates. If there is a way to bet on it, Wall Street will figure out a way to butcher it further it seems.
Data and opinion on just how successful the new weekly stock and index options are is still a work in progress.
Weekly options may have added a new metric to evaluating stock options expiration dates each month, but the main action still seems to revolve around the more widely quoted and more widely followed monthly put and call options.
Lululemon Athletica Inc. (NASDAQ: LULU) has been an amazing story if you have followed the company since its 2007 stock debut. This is a stock that has been more a theme-based run company and it effectively has no direct peers for investors to compare on an apples-to-apples basis.
Regardless of your view on the movement of a stock, you can have theta working for you or against you.
This is generally viewed as a contrarian indicator. More calls being traded is often viewed as a short-term bearish signal, while more puts being traded may indicate short-term market bottoms.
A plea to CBOE on behalf of Zecco posters….
After Potash Corp. of Saskathchewan received the buyout offer from BHP Billiton plc, now formal and in a cash tender, it seemed as if investors decided to look elsewhere for other buyout targets.