Option Block 710: You Are All Stupid

04/24/18 • 62 min

Trading Block: VIX down. Vol futures down. Gold vol is very low. 10-year yield at 3%. Metals get the crap kicked out of them.

Earnings: GOOGL - ATM straddle: 54, approx. 5%. More tech earnings to come.

Odd Block: More Jan 2019 50 "catastrophe" puts in Tesla Motors (TSLA). Puts trade in Chicago Bridge & Iron Company (CBI). Calls trade in D. R. Horton Inc. (DHI). Puts trade in CBL & Associates Properties, Inc. (CBL).

Strategy Block: Uncle Mike Tosaw discusses hedging during earnings.

Mail Block: Options question of the week

VIX is back in the mid-teens. Are you buying this Volatility reprieve or is this merely calm before the storm? Quite simply - Where do you think VIX will end the week?

24% - Here: 16-18
19% - Higher: 18-20
18% - Even Higher: 20-25
39% - Lower: 14-16

Options Flash Poll: The proposed third exchange from @MIAXexchange will raise the total number of U.S. Options Exchanges to 16. Is this a good thing for the options market? Is it the straw that finally breaks the camel's back? Or are you too busy getting great fills to care?

44% - More Exchanges the Better
22% - Please Make It Stop
34% - Don't Care: I get filled

Listener feedback:

Question from LNC - SVXY calls suck now. What about selling the puts? Is there any juice in those or have they been drained as well by the bid redo last week?

Around the Block: GOOGL post-earnings. Andrew wants to let it all out. SVXY makes him angry. Will tech earnings produce a higher SPX?

Trading Block: VIX down. Vol futures down. Gold vol is very low. 10-year yield at 3%. Metals get the crap kicked out of them.

Earnings: GOOGL - ATM straddle: 54, approx. 5%. More tech earnings to come.

Strategy Block: Uncle Mike Tosaw discusses hedging during earnings.

Mail Block: Options question of the week

VIX is back in the mid-teens. Are you buying this Volatility reprieve or is this merely calm before the storm? Quite simply - Where do you think VIX will end the week?

24% - Here: 16-18
19% - Higher: 18-20
18% - Even Higher: 20-25
39% - Lower: 14-16

44% - More Exchanges the Better
22% - Please Make It Stop
34% - Don't Care: I get filled

Listener feedback:

Question from LNC - SVXY calls suck now. What about selling the puts? Is there any juice in those or have they been drained as well by the bid redo last week?

Around the Block: GOOGL post-earnings. Andrew wants to let it all out. SVXY makes him angry. Will tech earnings produce a higher SPX?

Previous Episode

Option Block 709: Tech Wreck, plus Well-Timed VIX Puts

Trading Block: That's right. We are up to 16 exchanges now. MIAX Options and MIAX PEARL options exchanges, today announced that it intends to launch MIAX Emerald as its third fully electronic options exchange in 2019.

Options Flash Poll: The proposed third exchange from MIAX exchange will raise the total number of U.S. Options Exchanges to 16. Is this a good thing for the options market? Is it the straw that finally breaks the camel's back? Or are you too busy getting great fills to care?

More Exchanges the Better
Please Make It Stop
Don't Care: I get filled

Earnings:

E-Trade - 58.50, ATM straddle ~ 2, approx. 3.5%
Netflix (from Monday) - 307, ATM straddle ~ 28, approx. 9%

Odd Block: Well-times paper in VIX (VIX). Put love in Market Vectors Semiconductor ETF (SMH). Deep ITM calls in NXP Semiconductors NV (NXPI). Call spread in Alcoa Corp (AA).

Mail Block: Last week's options question of the week.

SPOT is the latest hot IPO to join the Options market. So many recent Options listings started off hot then suddenly cooled so we have to ask - which hot recent IPO will you be slinging Options on in 2019?

38% - SPOT
16% - DBX
41% - SNAP
5% - Other

This week's options question of the week:

VIX is back in the mid-teens. Are you buying this Volatility reprieve or is this merely calm before the storm? Quite simply - Where do you think VIX will end the week?

Here: 16-18
Higher: 18-20
Even Higher: 20-25
Lower: 14-16

Listener questions and comments:

Comment from J3dingle -Mark, do you realize this is what almost won your Broker Madness tournament?
Question from Dhasone Riley -I have a general question because I'm struggling with hedges. Do most people buying calls or put options as hedges, hedge in, at or out the money?

Around the Block: ETrade rallied a bit after earnings, but still a meh. The more exchanges the better? Silver is moving again. Will the maket move back above 2700? Sebas is more bullish than Tosaw.

Next Episode

Option Block 711: AMZN, MSFT and INTC Earnings Palooza

Trading Block: Earnings:

AMZN - 1460, ATM straddle 90, approx. 6%
MSFT - 92, ATM straddle 4, approx. 4%
INTC - 51.38, ATM straddle 2.40, approx. 5%
GOOGL - ATM straddle 54, approx. 5%

Odd Block: More Jan 2019 50 "catastrophe" puts in Tesla Motors (TSLA). Apr 12.5 Puts in CNH Industrial NV (CNHI). Line in the sand puts in L Brands Inc. (LB). Line in the sand puts in Dicks Sporting Goods Inc. (DKS).

Mail Block: Options question of the week

We dig up many strange options positions at the Options Insider. Some seem credible while others are just head scratching. Which of the following open options positions do you think has the best chance of actually becoming a winner?

49K TSLA Jan 2019 50 P
197K VXX Jan 2019 10 P
65K GLD Jan 2019 200 C
146K SPY Dec 2019 150P

Listener questions and comments:

Question from BTavares -Hey great show. I'm looking at this chart from FT and it makes me wonder if I should concentrate my trading in the last 30 minutes of the day to increase the liquidity for my options trades. I wonder if this also applies to less-liquid options names.
Question from Yancy - I heard Tom Sosnoff say on your interview show that there are 20 active names and 75 tradeable names in the options market for retail and that's about it. Do you concur?

Around the Block: What's on the radar for the all-stars?