Trading Block: GOOG after the bell. ATM Straddle: Approx. $21 - a 3.5% move. Last earnings: 19 handle move from close to open, approx. 3.5%. Volume: Approx. 3x ADV. Calls nearly 3 to 1 over puts. Bank of England urges longer jail terms for market manipulators. On July 16th, 2004 - Martha Stewart was sentenced for insider trading, conspiracy, and obstruction of justice in the ImClone trading scandal.

Odd Block: Calls trade in C&J Energy Services Ltd (CJES), calls trade in Regions Financial Corp (RF), and calls roll in US Bancorp (USB)

Mail Block: Listener questions and comments

• Comment from Anonymous - I listened to your talk on Options Insider Radio. (That is a very good program!) It seems that there are a lot of misunderstandings about the cracking down on short sales in China.

In fact, there is no limit on short short sales in China as long as you can borrow shares. Very similar to the US shorting stocks. But the main problem in China is the leverages with loans from outside financial companies.

A subsidiary of BABA is enabler of such outsider loans. That subsidiary company in Hangzhou (where I am from) has software called HOMS, which expand the single brokerage account into a multiple user account with or without brokerage firms knowledge. The original intended users are fund management firms. But the loan companies use the software to provide loans and control the account for margin risk management. They provide margin loans up to 1:10 ratio.

When the market initially dropped 15~20%, many accounts will have margin problem. Later on, the loan companies started manipulation operation: They purposely push down the index futures at certain hours, trigger the market sales, and then they forcefully close customer accounts.

Finally the Chinese police department stepped in. That really scared those loan operators.

Overall, I think it is great idea to forceful interrupt the vicious feedback loop, and return the market to more normal operations.

In China, the communist part[y] has to take responsibilities for the wellbeing of the general population, instead of "following the rules" to allow or protect a few successful guys who figured out how to take advantage of the system shortcomings.

So I think it is a good. In the US, no one was charged and put into jail for 2008 crisis. Here, we think that following rules is more important than the results. But the rules have been set up the guys who purposely keep holes they can exploit.

In this case, I totally support the Chinese government. It demonstrates that Chinese government can correct the problem much more effectively and efficiently.

For a society, it is better to protect 1,000,000 people from losing $1,000 each than to allow a guy to make $1B through "successful" trading.

• Question from SB94 - What’s up with Chinese stock options? Are options going to be listed in China anytime soon?
• Question from Sean - I like to follow an indicator that determines the strength of a trend going in a certain direction. How do these typically reflect in the options market?

Around the Block: Earnings! Citigroup, Google, eBay, UnitedHealth Group, America Movil, Blackstone, Goldman Sachs, Philip Morris International, Schlumberger, Advanced Micro Devices, Mattel, General Electric, Honeywell