Option Block 753: VIX Prediction Umbrage, Plus AMZN, TWTR and more

10/23/18 • 59 min

Trading Block: Economic Calendar - Top 5 Things to Watch This Week and U.S. midterms a mere blip on equity options traders' radar.

Odd Block: Call sale in EnLink Midstream Partners LP (ENLK), puts trade in Mellanox Technologies, Ltd. (MLNX), and risk reversal/collar in Harley-Davidson Inc (HOG)

Mail Block: Options question of the week

Earnings are back with big tech names on the docket. Which of the following will be lighting up your options trading this week? Bonus points for your preferred strategies - e.g. call vertical, straddle, etc.

Microsoft MSFT
Amazon AMZN
Alphabet GOOGL
Twitter TWTR

Listener questions and comments:

Comment from Kelly Lef - Thought the user tip to exercise deep ITM calls to save on the spread was a good one. So I checked a few of my stock replacement positions that had gone ITM. Turned out the spreads were fairly similar to the spread on the underlying stock index so the any savings were pretty small. Not really worth the hassle to go through the exercise process. Maybe I'm just trading a more liquid index than that listener or am I missing something?

Around the Block/This Week in the Markets

Oct 24 - New Home Sales, Beige Book
Oct 25 - Durable Goods, International Trade, Jobless Claims
Oct 26 - GDP, Consumer Sentiment

Trading Block: Economic Calendar - Top 5 Things to Watch This Week and U.S. midterms a mere blip on equity options traders' radar.

Odd Block: Call sale in EnLink Midstream Partners LP (ENLK), puts trade in Mellanox Technologies, Ltd. (MLNX), and risk reversal/collar in Harley-Davidson Inc (HOG)

Mail Block: Options question of the week

Microsoft MSFT
Amazon AMZN
Alphabet GOOGL
Twitter TWTR

Listener questions and comments:

Comment from Kelly Lef - Thought the user tip to exercise deep ITM calls to save on the spread was a good one. So I checked a few of my stock replacement positions that had gone ITM. Turned out the spreads were fairly similar to the spread on the underlying stock index so the any savings were pretty small. Not really worth the hassle to go through the exercise process. Maybe I'm just trading a more liquid index than that listener or am I missing something?

Around the Block/This Week in the Markets

Oct 24 - New Home Sales, Beige Book
Oct 25 - Durable Goods, International Trade, Jobless Claims
Oct 26 - GDP, Consumer Sentiment

Previous Episode

Option Block 752: The Funky Bunch

Trading Block: What a week - volatility is coming back down, and the crystal ball is looking nice! Dow tumbles 350 points as technology and communication-services stocks tank in midday trading.

Odd Block: Tesla put summary, funky put palooza in General Electric Company (GE), put sale in Activision Blizzard Inc. (ATVI) and call palooza in KeyCorp (KEY).

Mail Block: Options question of the week

Time to break out your crystal balls. Volatility is on everyone's mind these days. Will earnings season add to the growing storm? Or will cooler heads prevail this week? Quite simply - Where will $VIX close this Friday 10/19?

Here: 19-22
Higher: > 22
Lower: 17-18.99
Even Lower:

Next Episode

Option Block 754: What The Heck Is Going On?

Trading Block: Holy crap and holy crap!

Earnings:

World Wrestling Entertainment (WWE): Earnings topped views but revenue missed as ticket sales to live events fell, and the company plans to go ahead with an event in Saudi Arabia.
Twitter (TWTR): The stock shot up 16%, near 32, during morning trading on the stock market today.
Amazon (AMZN): ATM straddle: $102, approx. 6%
Alphabet (GOOGL): ATM straddle: $57, approx. 5%

AND Chinese operatives were able to infiltrate motherboards made by a US company that sold to Apple and Amazon: Bloomberg

Odd Block: Put summary in Tesla Motors Inc. (TSLA), call sale in Plains All American Pipeline (PAA), and call sale in Magellan Midstream Partners (MMP)

Mail Block: Options question of the week

Earnings are back with big tech names on the docket. Which of the following will be lighting up your #Options trading this week? Bonus points for your preferred strategies - e.g. call vertical, straddle, etc.

Microsoft $MSFT
Amazon $AMZN
Alphabet $GOOGL
Twitter $TWTR

Listener questions and comments

Question from RonS6 - What's your suggested minimum account size to start trading options?
Question from Tony - Is $HMNY the most option-like stock on the planet?

Around the Block/This Week in the Markets