The Option Block

Trading Block: Dow off about 100 points in choppy trade, tries to stay out of correction. Goldman Sachs thinks this volatility index should be much lower: The VIX is trading like the U.S. is in a recession. If the options market is right, China stock rescue is doomed.

Odd Block: Calls trade in UltraShort Euro ProShares (EUO), calls trade in Xerox Corp. (XRX), and calls trade in Arch Coal Inc. (ACI).

Strategy Block: Tosaw gives us an update of the things he has been doing, and why he has been doing them.

Around the Block: Earnings highlights of this week:

• Tuesday - Ambarella, Dollar Tree, H&R Block
• Thursday - Ciena, Medtronic

Trading Block: Selloff or rally? The market needs to make up its mind. Whither the VIX: there was a brief flirtation with 50 handle now back into the more “sensible” 20 handle. So, it takes a massive selloff in the marketplace to get VIX over 50. AAPL had a 20 handle range this week. We missed the deal of the century on the AAPL Sep 75 puts.

Odd Block: Calls trade in BTU, calls trade in P, and puts trade in LL

Mail Block: Listener questions and comments.

• Question from Leon187: Is it true that Apple sells puts to buy back their own stock? Do you feel that large volume of Sep 75 puts was a part of that program?
• Question from tennisgr8t: Can you give examples of managing positions using Greeks and is it a good strategy? Your show is awesome.

Around the Block: Earnings on Friday include Deere and Company, Foot Locker, Inc.

Trading Block: The DJIA briefly slumped more than 1,000 points, its biggest point-drop ever. VIX Cash hit 53.29 at 10am. The VIX jumped as much as 90 percent to 53.29, its highest since January 2009. VIX didn’t update for 30 minutes as options quotes got erratic. AAPL hit a low of $92 before rebounding.

Around the Block: Retail earnings season winds down this week

Trading Block: 6.5 month low. Breaking through big technical levels in the S&P. Huge move in VIX. A rundown of soft and hard losers. When Wal-Mart becomes a flight-to-safety. Everything is NOT awesome.

Odd Block: Strange and unusual activity in MSFT, PNK, and POT.

Mail Block: Listener questions and comments in response to Monday’s show.

• Comment 1 from @MarkBrant1KM: One thing I learned from Dr. J. that you guys don't discuss much is how return on margin is paramount to retail traders!
• Comment 2 from ‏@MarkBrant1KM: Main focus should be maximizing return on margin when trading options!

Mystery Block: Mark Sebastian discusses risk and reward.

Around the Block: Not going to hit all-time highs this week. What will the Fed do?

Trading Block: Stocks to watch include: Tesla, Zulilly, Pentair, and Estee Lauder. Gold trading outlook: Futures extend gains on US rates speculations. U.S. stocks rise as investors turn focus on economic strength.

Odd Block: Call spreads go up in Williams Companies Inc. (WMB), giant call roll in Hartford Financial Services Group, Inc. (HIG), and calls trade in Xilinx Inc. (XLNX).

Strategy Block: Tosaw discusses when to roll and when not to roll.

Mystery Block: Sebastian discusses his thoughts on trading and how it relates to putt-putt golf.

Around the Block: Be cautious. Fed minutes might be interesting.

Trading Block: Bearish options bets on Apple are spiraling higher. Stocks to Watch: Tesla Motors Inc. (TSLA) +2.26%), American Apparel Inc. (APP), Lenovo Group Ltd. (HKG). OCC and U.S. Securities Market Coalition ask U.S. Department of Labor to allow use of listed options in retirement accounts.

Odd Block: Calls trade in SYSCO Corp (SYS), puts trade in SPDR Barclays Capital High Yield (JNK), and puts trade in Technology SPDR (XLK).

Mail Block: Listener questions and comments

• Question from Mark Brant - Is insurance against assignment legal? Why not pay a fee for the broker to absorb assignment risk if your strategy prefers it?

Around the Block: Shake Shack, Inc. (SHAK) will be listed Aug 14.

Trading Block: Our special guest today is Vlad Karpel, Founder of Tradespoon. Dow jumps triple digits; oil recovery boosts energy 2%. How should investors play falling Apple stock? Earnings today after the bell: Rackspace Hosting, Inc., Shake Shack, Inc., Take Two Interactive - TTWO $31.38, Straddle - $3.10 - Approx. 10%. BATS gets regulatory nod for second U.S. options exchange.

Odd Block: Calls and puts trade in Ensco PLC (ESV), calls trade in Oasis Petroleum Inc. (OAS), and calls roll in SYSCO Corp. (SYY)

Strategy Block: Tosaw analyzes SPX and SPY

Around the Block: Earnings!

• Tuesday - Fogo de Chao, Inc., Red Robin Gourmet Burgers, Tribune Publishing Company
• Wednesday - Cisco, Macy’s, Aramark, Roundy’s, Inc., BABA and CSCO
• Thursday - Applied Materials, Inc., Kohl’s, King Digital Entertainment, El Pollo Loco Holdings, Inc., Nordstrom Inc., Tribune Media Company,
• Friday - J.C. Penney

Trading Block: Stocks getting crushed post-earnings.

• Disney - stock closed @ $121 prior to earnings on 8/4. ATM straddle $4.10 or 3.4%. Stock off over 10% in the past two days - off 2% today.
• Tesla - stock $270 prior to earnings. ATM straddle $22.25 or 8.2%. Down 28 handles, over 10% today.
• A massive sell-off is underway in media stocks, and Viacom is by far the biggest loser.

Odd Block: Calls trade in Allscripts Healthcare Solutions (MDRX), puts trade in Noble Corp. (NE), and calls trade in SPDR S7P Oil and Gas (XOP)

Mail Block: Listener questions and comments

• Question from RJR357 - On the CBOE blog you see comments such as Bulls are piling into XZY or calls outnumber puts 6 to 1. Is it prudent to follow the herd? Is this info of any value? I'm guessing this is the big money traders. Great show.
• Question from Charles Vela - My friend recommended Dough as an options starter platform. It seems a little silly to me. How do you like it?

Around the Block: Earnings: FitBit (FIT)

Trading Block: Thanks to everyone that came out last week to our live show! We had a wonderful seeing all of our listeners in person.

• Earnings today after the bell: Brookdale Senior Living, Avis Budget Group, Allstate Corp, General Growth Properties.
• Media & retail highlight earnings this week: CVS, Office Depot Inc., Walt Disney Co.
• Highlights of this week: Wednesday: Tesla, Time Warner, and Twenty-First Century Fox; Thursday: Allergan

Odd Block: Calls trade in Williams Companies Inc. (WMB), calls trade in NorthStar Asset Management (NSAM), and calls and puts trade in Merck & Co., Inc. (MRK)

Strategy Block: Tosaw discusses the importance of patience, especially when trading.

Mail Block: Listener questions and comments

• Question from Beacher454 - Last week Mark S. said the free options training is ok, but you need paid training to really make money. Can you give an example how paid training is better?

Around the Block: Upcoming earnings: Disney, Tesla, Office Depot. Plus, macroeconomics. Options on VIX weekly futures. Will they? Won’t they?

Trading Block: Still in the thick of earnings season. LNKD straddle going out at over $25. Talking FB, VIX. Trading the Sebastian bottom. The introduction of VIX weekly futures. Whole Foods prices weigh on earnings. Who’s afraid of insider trading? Chinese equity vol. Will Gold fall to $350/ounce? SO MANY new CBOE indexes. SO MANY.

Odd Block: Ratio/vertical calls roll in MDLZ. Ratio buy-write in NOW. Taking the short off in NOK.

The Mail Block: Listener questions and comments.

• What happened to Options Oddities?
• What is the worst beginner options trade?
• Beware of paying through the offer

Around the Block: Still some earnings coming: XOM, CBOE, CVX. Introducing the inverse mullet: the tellum. Greece. Jobs report next week.