Sometimes the market doesn't work in your client's favor. This episode explores the ways that protective puts can insulate your clients from the dramatic swings of the marketplace.
The Option Block all stars look back on trends, headlines, and crazy trades from 2011, as well as look forward to what might happen in 2012
Sometimes the market doesn't work in your client's favor. This episode explores the ways that protective puts can insulate your clients from the dramatic swings of the marketplace.
A brief hiatus
Trading Block: A weak rally going into the holiday — not too much going down on the street except for the continued annihilation of volatility. GLD and GVX ended the year down. Not much movement otherwise given the time of year. Odd Block: A look back at some usual activity from the past, including GLD and Darden Restaurants, Inc. (DRI). Xpress Block: Rob K talks about straddles and strangles given the fact that volatility has been crushed lately.Around the Block: The bulk of the holiday weekend has already come out. Have a happy holiday!
Trading Block: A volatility/VIX rundown — it's up, it's down, it's in lockstep with the market, it does its own thing. It's VIX madness. Zenga, a new tech name to hit the market — can it follow in the footsteps of Linkedin, Groupon, Angie's List or the other 2011 tech bubble names? A Metals/commodity rundown Odd Block: Unusual activity in Norfolk Southern Corp. (NSC), St. Jude Medical, Inc. (STJ), and an Odd Block review from 10/27 on Hecla Mining Co. (HL).Xpress Block: Tim Navabi discusses the busy Friday expiration, taking calls from customers about deep in-the-money spreads and other goings on at OX.Around the Block: What are we watching this holiday week? Buffalo Wild Wing (BWLB) joins the Wheel of Fun, also game developer Take 2. It's a holiday week, so plan accordingly if you are long premium.
Volatility Review: This was an intriguing week for volatility action. Strange week in the world of VIX, with it finally returning to "normal." The novel concept of being fully insured. The seasonality of VIX–general uptrend in market plus professionals taking money off the table equals a perfect storm in VIX. Euro VolContract updates–December one-month went out at 11.12, three-month at 12.84.Volatility Viewpoint: Mark and Don discuss volatility with Stephen Figlewski, Professor of Finance at NYU's Stern School of Business, founding editor of the Journal of Derivatives, and Director at the Nasdaq OMX Derivatives Research Project.Crystal Ball: VIX at a much more tolerable level, but Mark thinks it will vacillate in this "new mean" for quite a while. January Euro VolContract is fairly new, but volatility is forecasted to be lower going out.
Volatility Review: This was an intriguing week for volatility action. Strange week in the world of VIX, with it finally returning to "normal." The novel concept of being fully insured. The seasonality of VIX–general uptrend in market plus professionals taking money off the table equals a perfect storm in VIX. Euro VolContract updates–December one-month went out at 11.12, three-month at 12.84.Volatility Viewpoint: Mark and Don discuss volatility with Stephen Figlewski, Professor of Finance at NYU's Stern School of Business, founding editor of the Journal of Derivatives, and Director at the Nasdaq OMX Derivatives Research Project.Crystal Ball: VIX at a much more tolerable level, but Mark thinks it will vacillate in this "new mean" for quite a while. January Euro VolContract is fairly new, but volatility is forecasted to be lower going out.
Trading Block: SPY and other expirations on ETFs–close out your shorts! More put buyers are rolling into VIX – even the Journal is starting to pick up on it. Given this erratic movement, how risky is hedging the VIX? GLD put options, a relatively inexpensive option if you still need to hedge you're GLD downside. A Reuters article debating and discussing the sideways movements of the market, which gained popularity of the site recently, recommended straddles as a way to play with market. Should it even be allowed to recommend straddles without following it up with the appropriate discussion on gamma scalping? RIMM earnings after the close ? at-the-money straddle trading $1.75 with one day to go. Odd Block: Unusual activity in Walgreens Co. (WAG), Credit Suisse Group (CS), and an activity review from November 17Louisiana-Pacific Corp. (LPX). Xpress Block: John Grigus from OX discusses the Van Eck ETFs and Sears (SHLD), which came out with a re-org. The December futures contracts will go off and stop trading at 8:30 CST. Strategy Block: Mike Tosaw talks about diagonal spreads and the diagonal butterfly given the weekly options being the great fascination of the retail world and gives us his two cents. Around the Block: An update on RIMM – that straddle still not paying the bills, trading about a dollar lower. Will VIX continue to decline? Will the market head north from here?
Trading Block: It's been quite the roller coaster ride for VIX as of late, a lot of people picked up their insurance and are sitting fully hedged, just riding out the storm. Over at KYO, Dollar General and GNC stocks continue an upward climb. Gold down today, as well as crude oil, bonds may be next. Plus, Netflix, aka the widow-maker, makes a return cameo. Odd Block: Unusual activity in Activision Blizzard, Inc. (ATVI), Targacept, Inc. (TRGT), and revisiting an 11/28 activity review on MGIC Investment Corp. (MTG). Xpress Block: Tim Navabi discusses corporate restructuring and how once they announce some news it can affect the stock and options. Around the Block: Retail sales tomorrow, crude inventories Wednesday. Best Buy could be interesting to watch along with other names in the Wheel of Fun.
Volatility Review: VIX has been up and down around the 30-handle, but now it is time for it to begin to settle at a more normal level. Friday was quarterly expiration day in the Euro VoContract futures, with the front one-month and the December three-month going out. Volatility Viewpoint: Today's guest, Chris Cole, Managing Director at Artemis Capital Management, sits down to discuss VIX options and futures, volatility doldrums, and the trading approach at Artemis. Crystal Ball: VIX is a coin flip with regard to both the long-term and short-term mean. The gang looks at the January one-month and March quarterly Euro VolContracts and their implied volatilities versus potential realized vol.
Volatility Review: VIX has been up and down around the 30-handle, but now it is time for it to begin to settle at a more normal level. Friday was quarterly expiration day in the Euro VoContract futures, with the front one-month and the December three-month going out. Volatility Viewpoint: Today's guest, Chris Cole, Managing Director at Artemis Capital Management, sits down to discuss VIX options and futures, volatility doldrums, and the trading approach at Artemis. Crystal Ball: VIX is a coin flip with regard to both the long-term and short-term mean. The gang looks at the January one-month and March quarterly Euro VolContracts and their implied volatilities versus potential realized vol.