Tricks of the Trade featuring Special Guest Co-Host: Jon Cherry, Head of U.S. Options, Northern Trust - Capital Markets.

• Looking back at the recent tariff-induced market volatility.
• We've seen violent selloff and equally violent rallies.
• What are your thought on the recent market volatility?
• How can options be implemented on behalf of clients in these types of markets?

The Buzz: What do informed advisors need to know?

• The numbers from OCC are in for February - and they were good (surprise).
• U.S. options-based funds grow in number despite volatility lull: study, Reuters

Office Hours: What is on your mind?

• Question from Ed Bankert - Debating on using covered calls or short puts. Which is better for a less experienced options trader who wants to make money?
• Comment from Tom -Let's be honest. If any of us had size bitcoin we would have sold out ages ago and probably be kicking ourselves right now.
• Question from JohnnyBananas -Quick question, if you buy a put option and the strike price is $5 and the stock drops to $3, is it still worth $ even if it's 3$ under - even though my strike price is 5$?? So if the stock price is $7 drop to 5(strike), but end up going to 3, my option is worth ~$4? So I don't have to sell if I reach my strike price? Is this the same with call options? What confuses me is the strike$. #learning

The Buzz:

• Looking back at one of the craziest weeks in market history.
• What are everyone's thought on the historic developments in the market last week? Specifically the VIX surge and SPX selloff.
• What was the outlook in the Swan offices last week? How did the DRS perform?
• What were ORATS clients asking about last week?
• Some thought about the value of hedging in these market environments?
• This week we all were reminded about the value of proper risk management.
• The great inverse Vol ETP debate continues.
• What are your thought about the XIV meltdown and the place of inverse VIX ETFs in the marketplace? Should they exist? Should retail be using these products?
• VIX Inventor Discusses the Dangers of Inverse, Leveraged VIX Indexes
• Did VIX Manipulation Cause the Massive Surge Last Week - as Alleged by Bloomberg?
• Last Week's Volatility Cost Options Traders Over a Billion in Slippage

Tricks of the Trade: Using options in retirement accounts.

• What are the limitations of trading options in a retirement account?
• What strategies can you utilize?
• Stock replacement strategy: what is it?
• Long-term stock replacement strategy with a covered call, aka fig leaf strategy.

The Buzz: What do informed advisors need to know?

• 2017 turned out to be a pretty good year for options - even with no volatility - also ETFs
• The new tax bill - not many changes for options users.
• akeaways from the 2017 Fidelity RIA Benchmarking Study.

Office Hours: Listener questions and comments

2017 was the "Year that Volatility Died". So our first question of the week for 2018 is a puzzler. Quite simply: where do you think $VIX will close at the end of the year?

• Between 7.5-9.99
• Between 10- 12.49
• Between 12.50 -14.99
• Above 15

Listener questions: What's on your mind?

• Question from L Penguin - I'm a new options trader and I want to buy a LEAP call because it looks like the stock is going to go to up in the next 12 months, but I don't want to commit yet. I also want to generate income while I hold that position. What are your thoughts on selling the call while I have the leap? Also, this stock has an attractive dividend that I'd like to capture. Is this even possible? Interested in your thoughts, thanks!...I was thinking about buying a deep in the money call for the LEAP, and then depending on where the stock is trading at the time, sell closer to the money.

Options 101: Exploring Expiration Myths & Misconceptions

• What is expiration?
• Why do options expire?
• What do some of these scary terms mean, i.e. triple witching, and quadruple witching?
• How does expiration impact the Greeks?
• Myth busting: Is it true that options control the stock market on expiration Friday?
• Is max pain a real concept?
• Pinning/Pin risk: What is it? Why does it matter? How do you avoid it?
• What happens when you exercise an option?
• American vs. European exercise?
• Can you exercise options early? Should you?
• How does auto-exercise work?

The Buzz: Looking back on 2017: The year without volatility.

• VIX has been under 10 for about 45 days this year, and under 12 for a little over 200 days.
• "Stealth hedging" shows investors not so complacent
• We are all now living in a post-Bitcoin world now - when will we be able to trade the options?

Tricks of the Trade:

• What is the Fitness Function?
• How can an option-oriented advisor/asset manager use this?

The Buzz

• OCC Cleared contract volume up 20% in October.
• Big names outperforming during earnings season.
• How to approach trading into an earnings announcement.
• Volatility and Market History in the Age of Trump.
• The Rise and Fall of Modern Portfolio Theory

Office Hours: Listeners have their say

• Comment from Don - Guys, If I live to be 100, I will never, ever, understand utter gibberish such as this article. All the technical analysis, all the pseudo-science, charting, etc., all to reach what conclusion? In essence, that the market is due for a correction and is going to tank! Why use VIX for that? Does he want any sane, rational human being to conclude that VIX has a mind of its own and is going to explode all by itself, and THEN, a market correction will ensue?? Now, don't get me wrong: we could certainly have a massive market correction at any time. But, it is beyond asinine to imply that what will set it off will be a huge rally in the VIX. The entire investment public is made up of 99% horses' asses. And garbage like this article doesn't help. Don.

Options question of the week: Bitcoin just blew past $100B in "market cap." If options were available how would you trade them?

• Buy Calls/Call Spreads
• Buy Puts/Put Spreads
• Sell Covered Calls
• Other/Hate #Crypto

Tricks of the Trade: An overview of VIX settlement. How does it work? Can it be manipulated?

The Buzz: FINRA Orders Wells Fargo to Pay $3.4M Over Volatility-Linked ETPs.

Office Hours: Listener questions and comments

• Question from T_Aldo - Just came across this on the Advisor section of Investopedia. I found it somewhat alarming. What are your guys thoughts? Refers to article: The Best Options Trading Advice: Don’t!

Today's co-hosts are Marc Odo, Director of Investment Solutions, Swan Global Investments and Matt Amberson, Principal, Option Research & Technology Services.

Tricks of the Trade: How do options fit into the active vs. passive debate? Active vs. Passive? It Doesn’t Matter, by Marc Odo. How do you incorporate options into a "passive" portfolio?

The Buzz: Advisors Sticking With Active Investments: Practical Perspectives. ETF Use Keeps Growing (and Growing). An update on the ongoing DOL fiduciary battle.

Office Hours: In which the listeners take over the show.

Options question of the week: First #Harvey, then #Irma an #Jose and now #Maria. We prep houses/cars/family for #disasters. How do you prep your portfolio?

• 31% - Get Long $VIX/$VXX/$UVXY
• 15% - Go To Cash/T-bills
• 27% - Buy Index/Stock Puts
• 27% - "Risk Assets" - Gold, etc.

Listener questions and comments:

• Question from JV Cavalia - Question for Advisors Option on annuities. Hello Mark, Randy, Mike and Eric. I am very much enjoying your program. I am still new to options and I am interested in annuities. But most of them seem to be overly complex and riddled with hidden fees. Many of them also seemed to utilize some form of derivative to achieve their investment goals. The obvious question then is can I achieve the same results myself just using options? Would writing a quarterly call on a broad index achieve the same long-term income results for example? Do you have other suggestions. Thanks again.

Co-Hosts:

• Chris Hausman, Portfolio & Chief Technical Strategist, Swan Global Investments.
• Aash Vyas, Director of Portfolio Strategy and Overlays, Swan Global Investments.
• Matt Amberson, Principal, Option Research & Technology Services.
• Carolyn Leonard, Former CBOE Member, Co-Founder - DyMynd

The Buzz: Bringing women and advisors into the options fold - a look at IMCA, Boston Options Exchange & Dymnd's upcoming "All Women Want Options" webinar.

• A new report on the "typical" advisor from Investment Advisor Association.
• All advisors should pay attention to Amazon after their multibillion acquisition of Whole Foods.

Office Hours/Advisors Option Flash Poll.

With $VIX hitting new lows and $SPX new highs, what is your financial advisor telling you about using #Options?

• 13% - Write covered calls
• 35% - Buy protective puts
• 22% - Do Both - Use Collars
• 30% - They Won't Touch Options

Listener Questions and Comments:

• Question from Tancray - Do you think the trend toward passive investing will help or hurt options focused advisors?
• Question from Nick Sassela - I've read a lot about robo advisors encroaching on the domain of the traditional financial advisor. I would think complicated assets like options wouldn't be well-suited to algorithms and machines. Is it fair to say that options then are the silver bullet to the rise of the robo advisors?

Options 101: Gamma: Measuring the Changes in Delta

• What is the relationship between gamma and Delta?
• What are the properties of gamma? What is put-call parity?
• At the money options and gamma? Out of the money options and gamma? Time and gamma?

The Buzz: The low volatility regime continues: 7 of the 11 days in the past 20 years where VIX has been below 10% have occurred since mid-May 2017. Two studies, two different conclusion about alts & hedge funds.

Office Hours: Listener questions and comments:

Advisors Option Flash Poll. With $VIX hitting new lows and $SPX new highs, what is your financial advisor telling you about using #Options?

• Write covered calls?
• Buy protective puts?
• Do Both - Use Collars
• They Won't Touch Options

Listner Questions:

• Question from LCB - Hey guys. You mentioned on the show that this is a challenging time to sell options due to low volatility. So does it stand that the opposite is true? Is it a good time to buy options? Particularly protective puts?
• Question from TIM D. - How high do rates need to be before I need to worry about rho?

In this episode Mark is joined by co-hosts:

• Chris Hausman, Portfolio & Chief Technical Strategist, Swan Global Investments
• Aash Vyas, Director of Portfolio Strategy and Overlays, Swan Global Investments
• Mike Tosaw, RCM Wealth Advisors
• Ilya Feygin, Senior Strategist, Wallachbeth

Tricks of the Trade: Selling options in a low volatility environment.

What are some ways that advisors/asset managers can maintain the income component of their portfolios, without taking unnecessary risks?

• Selling ITM options?
• Selling longer-term options?
• Changing underlying?

Options 101: Information advisors need to know

• Rho: Interest Rates Impact on Option Pricing - by Chris Hausman

The Buzz: What is happening in the industry?

• Why Volatility Is an Investor’s Worst Enemy: Searching for Alpha, May 2017
• DOL Will Not Delay June 9 Fiduciary Rule Compliance Date: Acosta.

Office Hours: Question from Ian Wagner - Why trade volatility vs direction or income? Preference? More favorable risk/reward profile?