June 30, 2014

Advisors Option 20: Volatility and Options

1 hour 1 minute

In this episode, Mark and Randy are joined by Joe Cusick, Vice President of Wealth and Asset Management at MoneyBlock.

Options 101: "Low VIX" is all over the financial media these days. Which makes it an excellent time to review the relationship between volatility & options. Haven't discussed volatility on the program since Feb 2013 and the VIX products since October 2013 so we'll review the following topics:

What is implied volatility?

Difference between realized and implied volatility?

How does high and low implied volatility impact options pricing?

If you trade options for your clients do you want high or low volatility?

What does it mean to have a "low VIX"? Is this level of implied volatility actually low?

Should advisors use VIX options to hedge their client's portfolios?

The Buzz: Credit unions help advisers expand use of options:

Listener Mail: Listener questions and comments

Question from Charlie Durant. I love the advisors show. Can you guys recommend a good tool or platform that will help me roll covered calls on my spy and individual equity positions more effectively? Right now I’m pretty much running a spreadsheet for my clients and then manually trading in and out of each position. Seems like there should be a better or easier way.

Question from Firestar. Can I use VIX options in my IRA accounts or are futures options banned due to leverage?

...more