Option Block 426: Hedging Crude Oil Is Not Rocket Science

Trading Block: NASDAQ composite rises above March 2000 record close. Roots of 'flash crash' go back further than you thought at CME. Oil jumps 3 percent, hits 2015 high on Yemen, supply concern. Earnings today include (before the bell): GM, Procter and Gamble, Caterpillar, Dow Chemical, Southwest Airlines, Dunkin Brand Groups; and (after the bell): Google, Microsoft, Starbucks, Amazon, Capital One, E-Trade Financial, Pandora.

Odd Block: Giant put buyer in The CBOE Volatility Index (VIX), and calls trade in iShares MSCI Taiwan Index (EWT)

Mail Block: Listener questions and comments

• Question from Vegan - What oil products do airlines use to hedge their crude exposure?
• Question from Nick - I have heard markets spend 30% of time trending and 70% of time bracketing. Can I use options to trade both of those environments?
• Question from Alan - Why is rolling a position so prominent? Is that no just averaging into a losing trade?
• Question from Evan - For Uncle Mike - I am long the Apple July 130-140 call spread. What do you think about this both for an earnings play, as well as for some longer term bullish exposure to Apple? What are some other bullish strategies you could recommend for a modest ten-point rally over the next three months?
• Comment from Mark Brant - Great Option Block episode! I got even smarter about options again! The gift that keeps on giving: OIR. Thx!

Around the Block: More earnings. Friday, April 24 - American Airlines, Xerox, Tyco International. Monday, April 27 - Apple, Inc.