The Option Block

Trading Block: Earnings Thursday (retail heavy)

• After the bell: Gap, Inc., Ross Stores, Shoe Carnival,
• Before the bell: Wal-Mart, Dick's Sporting Goods, HH Gregg, Stein Mart, The Bon-Ton Stores
• Stocks to watch: Wal-Mart, Monsanto, Advance Auto Parts, Tesla, Urban Outfitters.
• This S&P 500 Death Cross could be the real deal.

Odd Block: Calls trade in Kinross Gold Corp (KGC), call buyers trade Coeur Mining Inc. (CDE) and puts trade in Market Vectors Gold Miners (GDX)

Mail Block: Listener questions and comments

• Question from 777 - With commodity based ETF options - anyway to trade roll risk?

Around the Block: Earnings on Friday- Campbell Soup Company, Deere & Company, Foot Locker Inc. Rate hike watch: key dates and data.

Trading Block: Weekend Review: VIX Options and Futures 5/9 through 5/13. Has VIX bottomed? Yen volatility surges as Central Bank meetings loom. Hedge funds are not what they used to be.

Odd Block: Puts trade in Twitter Inc. (TWTR), puts trade in Materials Select Sector SPDR (XLB), and puts trade in CF Industries Holdings inc. (CF)

Strategy Block: Uncle Mike Tosaw discusses ratio spreads and sector investing.

Mail Block: Last week, the options question of the week was "What is your favorite options trading film?" TWTR weighed in with the following:

• 69% Trading Places
• 23% Rogue Trader
• 8% Quicksilver
• and Mark B. offered up 9 1/2 weeks because Mickey Rourke was an arbitrageur.
• Have you ever used the FCOJ scene from Trading Places to explain to people what you do?

Around the Block : Where will we see SPX, GLD, crude this week? Fed on Wednesday.

Trading Block: S&P was all over the place, to settle down only 0.2%. A little flip on volatility. Apple is no longer the most valuable company in the world. Will online retailers take over retail stores? Are malls dead? Monsanto cheater, could you be more obvious?

Odd Block: Big call buying in JNK, massive long-term call buying in JD, and UPS calendar put trades.

Around the Block: Bears mini camp. Retail sales numbers. Standard options expiration next week.

Trading Block: Options Civil War: Which side are you on? Earnings today before the bell: Tyson Foods, Liberty Media Group, Sothebys. Traders on edge as Staples-Office Depot deal decision looms. Are markets more sensitive to the Fed these days? Stocks to watch: LendingClub, Krispy Kreme, Freeport-McMoRan, Valeant.

Odd Block: Call roll in American Capital LTD (ACAS), buying time call stupid in Nokia Corp (NOK), and put spread buyers in JPMorgan Alerian MLP Index (AMJ).

Strategy Block: Tosaw discusses long-dated covered call writing

Mail Block: Which Team are you on?

• 29% - Team Cap
• 71% - Team Iron Man

Listener questions:

• Question from 777 - Have you heard any rumors that CME or CBOE will be acquired by a bank or insurance company?
• Question from SkyTrader - If I see a trend, what spread works best for capturing that spread - straight vertical or calendar?

Around the Block: This week the big retailers take the earnings stage, and names include:

• Tuesday - Electronic Arts, Walt Disney Company, Dean Foods, Credit Suisse, Allergan
• Wednesday - Macy's, Wendy's
• Thursday - Kohls (before bell), Nordstrom (after bell), Shake Shack
• Friday - JC Penney, Honda

Trading Block: Earnings "Straddle Battle" pitted Tesla against Alibaba. Who won? Other interest in Blizzard, XLE

Odd Block: OTM call buyers in Weatherford International PLC (WFT), long-term collar trades in Market Vectors Oil Services ETF (OIH), and put spread trades in SPDR S&P Metals and Mining ETF (XME).

Mail Block: Listener questions and comments

• Question from Oarmin333 - Hi. I have been learning and using MProfile for a year now, all on an intraday basis using futures, mainly ES. I would like to expand my time horizon a bit to a few days to a few weeks. I have a 25k account I am working with. I understand the mechanics of futures, but I am considering using options due to longer holding periods, specifically being long premium, due to the defined risk. I am really not interested in selling options. Some people say that buying options is a fools errand and better to sell spreads, other say they only buy premium. I am not sure which way to go. If I hold for longer periods, I have to cut size way down in futures, which is fine. However, If I get good at options, there is a lot of flexibility. I am a discretionary trader and a directional trader. I would love to get your opinion on the matter, if you do not mind. Thanks a bunch! Also I can still play intraday moves with weekly options if I see that opportunity. If I am good at picking direction, can simple long/calls (non spreads) be a viable option, no pun intended.
• Question from Billy Boy: What's your opinion on the binary options from Nadex?
• Question from Flyer: What are the first steps to learn about options?

Around the Block: Earnings!

• Friday: Cigna Corporation

Trading Block: What is going on in the market?

Options #QuestionOfTheWeek:

Earnings Straddles - $AAPL(4.5%), $FB(7%) & $AMZN(8%). Which will be the most accurate?

• 45% Facebook - Close $108.89 (Straddle. $7.62) - Open $119.57: Difference. $10.68 / 9.8% - Missed by 40%
• 29% Amazon - Close $602 (Straddle. $48.16), Open $666 - Difference. $64 / 10.6% - Missed by 33% - WINNER!!
• 24% Apple - Close $104.35 (Straddle.$4.70), Open $96 - Difference. $8.35 / 8% - Missed by 77%
• 02% Other

Earnings Straddle Battle:

• TSLA - $241.75, Approx. 8.3%
• BABA - $4.70, Approx. 6%

Odd Block: Call buyer in Direxion Daily S&P 500 Bear 3x Shares, call buyers in Weatherford International PLC (WFT), and put buyers in Cabela's Inc (CAB).

Strategy Block: Uncle Mike Tosaw discusses selling a put to get into a stock

Around the Block: Earnings!

• Tuesday - CVS Health, Pfizer, Etsy, Avis Rental Car, Hyatt Hotels, GrubHub, Spring Corporation, Starwood Hotels
• Wednesday - Tesla, Whole Foods, Merck & Company, Priceline Group, Zynga, Anheuser-Busch InBev, Kraft Heinz, FITBIT
• Thursday - Alibaba, Occidental Petroleum, Chesapeake Energy,
• Friday - Cigna Corporation

On the economic calendar this week are the ISM manufacturing index, international trade data and jobless claims on Thursday. Lastly, the week ends with the all-important monthly employment report for April.

Xpress Block: We have special guest co-host: Barry Metzger, CEO of optionsXpress. He discusses:

• The latest developments at OX.
• Interesting platform upgrades and tech overhauls
• What are the OX clients trading during the height of earnings season?
• Any interesting customer questions/feedback?

Trading Block: Options Traders Brace for Amazon Earnings. Amazon at $612.60. ATM straddle $49, approx. 8%. LinkedIn Corporation - $123. ATM straddle $16.20, approx. 13%. Earnings before the bell: CME, Coca-Cola, Ford Motor Company, Honda Motor Company, MasterCard Incorporated, MSCI Inc, Time Warner Cable, United Parcel Service, Viacom Inc. It was a rough week for Apple - $96.20 today. Stock crushed post-earnings, opened down $8.35 or 8%. Icahn bails out on Apple stock. Nasdaq mulls new exchange to ease trading in illiquid ETFs.

Odd Block: Calls trade in Methanex Corp (MEOH), calls and stock trade in Ebay Inc. (EBAY), and calls trade in KKR and Co. (KKR).

Mail Block: Listener questions and comments

• Question from Mohammed - Hi Mark! The Options Insider website is superb resource for new and experienced options traders. I know your weekly newsletter you folks you report significant/unusual done options trading activity across stock and ETFs. After searching on your site and overall online, I have found it quite difficult to locate a website which details some of the terminology used when describing the large blocks traded (e.g. "price variation"). If you could compile a glossary or an overview of how to view/assess options order flow that would be excellent. Keep up the great work! Thanks.
• Question from Maha - How difficult is it to become a successful options day trader?

Around the Block: A review of after-hours prices for LNKD, AMZN. Earnings parade continues with CBOE and XOM. Will the Icahn dump of AAPL have a longer-term impact. Central bank flim flammery.

Trading Block: Stocks drop ahead of earnings onslaught. Traders may just be forced to unwind all those VIX bets.

• Earnings today before the bell: Xerox, Haliburton
• Earnings today after the bell: The Container Store
• AAPL - ATM straddle: $4.90, approx. 4.6%
• FB - ATM straddle: $8, approx. 7.2%
• AMZN - ATM straddle: $49.50, approx. 7.9%

Odd Block: Calls trade in Health Care SPDR (XLV), calls trade in BankRate Inc. (RATE), and calls trade in Dollar Tree Inc (DTLR)

Strategy Block: Uncle Mike Tosaw discusses dollar cost averaging.

Around the Block: Earnings!

• Tuesday - Apple, Fiat Chrysler, 3M Company, Ally Financial, Buffalo Wild Wings, Canon, Chipolte Mexican Grill, ebay, Eli Lilly & Co, Hershey Company, JetBlue, Office Depot, Panera, Procter & Gamble, Spirit Air, Whirlpool
• Wednesday - Facebook, Boeing, Hilton, Nasdaq, Six Flags, Speedway Motorsports,
• Thursday - Amazon (after bell), Ford Motor Company (before bell), CME (before bell), Coca-Cola (before bell)
• Also, the Fed breaks from its two-day policy meeting Wednesday at 2 p.m. ET and investors around the globe will be watching to see what the U.S. central bank says about the timing of its next interest rate.

Trading Block: Earnings!

• Thursday - (Before the Bell): General Motors Company, Southwest Airlines, Under Armour, Verizon Communications; (After the Bell): Microsoft, Alphabet Inc., E*Trade Financial Company, Starbucks Corporation, Visa Inc.
• MSFT - $56, ATM Straddle $2.37 - approx. 4.2%
• GOOG - $756.40, ATM Straddle $41.50 - approx. 5.5%
• SBUX - $60.77, ATM Straddle $2.25 - approx. 3.7%

Odd Block: Call spread buyers in Marathon Petroleum Corp (MRO), call buying in Tronox Ltd (TROX), and paper buying in Kilroy Realty Corp (KRC)

Mail Block: Listener questions and comments

• Question from Nick C.: Heard any chatter about CME or CBOE leaving Chicago?
• Question from Bob: Is the options market the most transparent financial marketplace?
• Question from Willy: What does the Option Block crew think of the TOS platform? Do you like it for pricing volatility and analyzing the Greeks?

Around the Block: Earnings on Friday - American Airlines, Caterpillar, General Electric Company, Honeywell International, Kimberly-Clark Corporation, McDonald's Corporation.

This Week in the Market:

• Monday - National Association of Home Builders' Housing Market Index
• Tuesday - Commerce Department releases new figures
• Wednesday - National Association of Realtors existing home sales data
• Thursday - Weekly jobless claims from the Labor Department

Interview Block: Today we are joined by special guest Mal Clissold President and Owner of SCC Capital Group, LLC. We discuss:

• How frequently and with what percentage do they delve into the individual stock world?
• What positions do you have that are designed to protect and potentially profit against a major one-day move?
• What kind of fund does he run?
• How does he control risk for his positions?
• What attracts him to a short vol position? What does he have on that he really likes right now?

Trading Block: Earnings today after the bell: Netflix. Earnings today before the bell: PepsiCo, Hasbro, Morgan Stanley. Options traders brace for another big move for Netflix shares. Stocks to Watch: Pepsi, Chiasma, Hasbro, Morgan Stanley.

Odd Block: Calls trade in The Carlye Group LP (CG), giant call roll in - Western Gas Partners, LP (WES), and upside calls trade in - AK Steel Holdings Corp (AKS).

Strategy Block: Uncle Mike Tosaw discusses the importance of diversification.

Around the Block: Earnings!

• Tuesday - Intel Corporation, Discover Financial Services, Goldman Sachs, Interactive Brokers Group, Johnson & Johnson, TD Ameritrade, Yahoo, Inc.
• Wednesday - Coca-Cola Company, Abbott Laboratories, American Express Company, Mattel
• Thursday - Before: General Motors Company, Southwest Airlines, Under Armour, Verizon Communications; After: Microsoft, Alphabet Inc., E*Trade Financial Company, Starbucks Corporation, Visa Inc.
• Friday - American Airlines, Caterpillar, General Electric Company, Honeywell International, Kimberly-Clark Corporation, McDonald's Corporation