Option Block 726: Amazing VIX Predictions...and Hiccups

06/26/18 • 60 min

Trading Block: Trump's trade war spooks the market. Again. Bitcoin manipulation via tether. Who out there is trading or interested in Crypto? What are you trading?

Odd Block: Call writing frenzy in Campbell Soup Company (CPB). Call palooza in Market Vectors Oil Services ETF (OIH). Call love in Fiat Chrysler Automobiles (FCAU).

Mail Block: Listeners take over

Options question of the week. Let's have some fun. These "entertainment" stocks are pricing in big moves. Gun to your head: Which July ATM straddle would you rather own in your portfolio? $WWE $DIS $WYNN $SEAS #DegeneratePremiumBuyers #PalmsIn #FearNoTheta

17% - $WWE July ATM Strad: $7
37% - $WYNN July ATM Strad: $12
16% - $SEAS July ATM Strad: $2
30% - $DIS July ATM Strad: $5

Listener questions and comments:

Comment from SecretlyPsyched: Is it possible to short-sell a campaign? Or how about an entire state party? Some sort of derivative strategy?
Question from Nowledg3ispowerl: So turns out you guys are absolutely right. I have a very poor understanding of options. What's the best podcast episode for beginners?
Comment from the chat room re: TSLA.
Question from HeyBartenderman: Hi. I have a question for you. If I'm interested in buying options in a stock, what's the best way to go about finding the best strike/expiry?...Basically, if I sold a stock for a nice profit, but then wanted to participate in a move higher should it keep going up (for example $IQ). Or if I've been watching something, and think it's about to break out, but don't know exactly when, which options should I be looking at? Weeklies, monthlies, leaps, etc....When is it better to do one length of option over another, I think is basically the question I have. Thanks.

Around the Block: Will they or won't they re: trade wars.

Trading Block: Trump's trade war spooks the market. Again. Bitcoin manipulation via tether. Who out there is trading or interested in Crypto? What are you trading?

Odd Block: Call writing frenzy in Campbell Soup Company (CPB). Call palooza in Market Vectors Oil Services ETF (OIH). Call love in Fiat Chrysler Automobiles (FCAU).

Mail Block: Listeners take over

17% - $WWE July ATM Strad: $7
37% - $WYNN July ATM Strad: $12
16% - $SEAS July ATM Strad: $2
30% - $DIS July ATM Strad: $5

Listener questions and comments:

Comment from SecretlyPsyched: Is it possible to short-sell a campaign? Or how about an entire state party? Some sort of derivative strategy?
Question from Nowledg3ispowerl: So turns out you guys are absolutely right. I have a very poor understanding of options. What's the best podcast episode for beginners?
Comment from the chat room re: TSLA.
Question from HeyBartenderman: Hi. I have a question for you. If I'm interested in buying options in a stock, what's the best way to go about finding the best strike/expiry?...Basically, if I sold a stock for a nice profit, but then wanted to participate in a move higher should it keep going up (for example $IQ). Or if I've been watching something, and think it's about to break out, but don't know exactly when, which options should I be looking at? Weeklies, monthlies, leaps, etc....When is it better to do one length of option over another, I think is basically the question I have. Thanks.

Around the Block: Will they or won't they re: trade wars.

Previous Episode

Option Block 725: Well-Timed Puts and Funky Verticals

Trading Block: Trump trade war spooks markets again. We are fully into zone two. Will vol explode, or is it just a bunch of nothing? Will there be a 50-handle move in the S&P within the next three days? Will this be another year of record volume? Which exchange is dominating the flow so far?

Odd Block: TSLA takes a drubbing. Returning to the Rent-A-Center trade from Tuesday. SBUX closing some locations. Is IQIY Inc. being impacted by the threat of trade war?

Strategy Block: Managing risk comes before sentiment. Going from a diagonal spread into a put spread.

Mail Block: Listener questions and comments

Options question of the week: Let's have some fun. These "entertainment" stocks are pricing in big moves. Gun to your head: Which July ATM straddle would you rather own in your portfolio? WWE? DIS? WYNN? SEAS? #DegeneratePremiumBuyers #PalmsIn #FearNoTheta

WWE July ATM Strad: $7
WYNN July ATM Strad: $12
SEAS July ATM Strad: $2
DIS July ATM Strad: $5
@PatrickSnoke: Just pull the trigger so I don't have to choose the least worst option.

Listener questions:

Question from Running Roger: Forgive me for asking but I need some help and have done something I didn't mean to. I bought ETSY puts at 40.00 strike and then wanted to sell to close. I accidentally sold a put contract, same strike price and same expiration date. Do they wash out? At this point I'm not even worried about the couple of hundred bucks I lost on the spread. I'm worried about selling the put contract. I used Robinhood on this one (instead of TOS) and I can't find a way to sell to close. Some help would be appreciated.
Question from nowledg3ispower: I think I understand most things about calls. But I can't figure out and no one is able to give me an estimate if I have an option in the money. And I want to sell the option as opposed to letting the contract expire and buying the shares. What's my ballpark profit? I've been looking at this option for Twitter. If you have to provide an example.

Around the Block: What are we watching for the near future? Watching VIX. Andrew doubles down on a big move in the S&P.

Next Episode

Option Block 727: Slinging VIX By Way of Mexico, Maine

Trading Block: A review of the week in trading

VIX Cash - started at 18.99, ended at 16.70
Earnings: Nike after the bell - $71.70, ATM straddle - $3.40, approx. 5%

Odd Block: Size money call roll in Devon Energy Corp (DVN). Call vertical in CVS Health Corp (CVS). Size puts in PowerShares DB US dollar Index (UUP)

Strategy Block: Uncle Mike discusses selling a call spread versus selling a call.

Mail Block:

Question form Jack Daniels trades: Pump me up $WWE don't fade! Huge TV deal billionsss. Let's go.
Question from BuddyBoy79: Can you please explain what relative strength and weakness mean as they pertain to options trading?

Around the Block/This Week in the Market