The Option Block

Option Block 421: The Tesla Options Protection Package

Trading Block: A sea of green on the street today. Tesla having its best day in five months - Back over $200. Oil leaps 5% on tempered Iran view, slower U.S. inventory rise.

Odd Block: Calls trade in Market Vectors Oil Services ETF (OIH), calls trade in Outerwall Inc. (OUTR), calls trade in Harley-Davidson Inc. (HOG)

Strategy Block: When is it ok to take profits early?

Mail Block: Question from NYSE Trader - Is it possible for hedge funds to press on options of illiquid stocks to manipulate prices? Can they do that?

Around the Block: Alcoa earnings on Wednesday. Last week’s jobs report. Looking at gold and oil. Don’t diddle in the middle.

Option Block 420: Farewell to the Viceroy

Trading Block: A sea of green in the market today - everything up! Wall Street regulator fears up for labor fight with its workers. High-frequency trading worries are fading, ConvergeX finds. Tesla CEO Elon Musk teases new product. Spoiler Alert: It is not a car.

Odd Block: Puts go flying is Tyson Foods (TSN), calls trade in HCP, Inc. (HCP), and puts trade in Dicks Sporting Goods Inc. (DKS)

Strategy Block: Uncle Mike Tosaw recollects on his first meeting with Alex Jacobson and the subsequent years following.

Xpress Block: The Viceroy tips his hat in a final goodbye.

Option Block 419: The Great Weekly Option Trading Debate

Trading Block: The market off just a fraction. Call option trades target return of $100 US crude oil. Options traders getting paid following Buffett to Kraft takeover.

Odd Block: Calls trade in EOG Resources Inc. (EOG); puts trading in iShares Emerging Markets ETF (EEM), and; puts trade in Market Vectors Semiconductor ETF (SMH)

Xpress Block: Alex discusses many of the functions in the OX mobile platform.

Mail Block: Listener questions and comments

• Question from Joseph Anthony - I appreciate your input on the following issues. I know that I am not alone in dealing with these questions. I continue to be confused on which weekly strike to choose when trading for a one or two day hold. I realize if issue does not move in my desired direction by Tuesday afternoon I risk theta decay and it increases rapidly as week progresses toward expiry. My thoughts in trading weeklies is to trade the ATM or most liquid on Monday and Tuesday. Trade one strike in the money on Wednesday and Thursday and trade two strikes in the money on Friday. I have read many articles recommending to trade DITM options (+-90) for a close to $1 for $1 effect. But the DITM are often quite illiquid and expensive. My model generates 75%+ success rate in choosing issues that move according to my projections and I choose to use weekly options to trade a small universe (AAPL, AMZN, GOOGL, AND NFLX) but I am still struggling to definitively choose the "right" option. My model is predicated on an immediate move and if it does not transpire in a bar or two I tighten my stop or exit. I am looking to trade naked or use strips and straps in order to implement my models signals. Thank you in advance.

• Question from NJay - What should I be using to value my index options properly, the cash index or the actual underlying futures? Thank you for all your insight.

Around The Block: Earnings today (before the bell): ConAgra Foods, Lululemon Athletica Inc., Accenture, Cosi, Inc. After the Bell: GameStop Corporation. Friday: BlackBerry Ltd, Carnival Corp.

Option Block 418: Something Has To Work

Trading Block: Earnings before the bell today: Geopark (GPRK) Posts Quarterly Earnings Results, Beats Estimates By $0.17 EPS. Earnings after the bell today: Flexion Therapeutics, Concord Medical Services Holdings Limited, Vericel Corporation. Senator Warren questions SEC chair on broker reforms. Volcker Outlines Plan for Overhauling Financial Regulation. Oil rises as weakening dollar outweighs OPEC oversupply.

Odd Block: Put traders in Neustar Inc. (NSR), calls trade in Caesars Entertainment Corp (CZR), and puts trade in ENSCO PLC (ESV) are up .10 to 21.15 today.

Xpress Block: Come on in and try out an OX virtual trade account.

Strategy Block: It’s tax season - Tosaw discusses regular vs Roth IRAs

Around the Block: Earnings: A relatively quiet week on the earnings front. Thursday: ConAgra Foods, GameStop, Lululemon. Friday: BlackBerry Ltd, Carnival Corp.

Option Block 417: Big Boy AAPL and Crazy VIX Settlement

Trading Block: The Dow welcomes Apple. Informed traders prefer options says academic research. Options market sees bottom in gold with urgency on hold at Fed. Earnings today (before the bell): Lennar (LEN); after the bell: Nike.

Odd Block: Unusual traders in Sina Corp. (SINA)

Xpress Block: Alex discusses covered writing strategies

Mail Block: Listener questions and comments

• Question from Mark Brant - Thanks to the crew for a great show and for answering my question! When the cat was away the mice did play! ...@Options Do block trades show up on the retail brokerages position ledgers as volume and OI... AAPL 1M ATR is at the top of its 20yr range so I bot April straddles for way less!
• Question from Nico - Do I need to understand the Black-Scholes formula to trade options?
• Question from James Mile - I am currently reading the options books by McMillan and Natenberg (thanks for the great suggestions). The latter chapters of some of these books get pretty deep into the mathematical underpinnings of the options market. I have to wonder if most of the people who are trading these products really understand this stuff. Do you share my concerns that there are potentially millions of people out there slinging calls and puts that really don’t understand how any of this stuff works? Great program. Glad OX/Schwab is a supporter of such fine content.

Option Block 416: Blasting Out Cheap XLE Puts

Trading Block: Rally ho on the street! Options traders are starting to pay up for crash protection, according to a recent note from Goldman Sachs. Long-dated crash put protection costs on the [S&P 500] have more than doubled over the past 9 months.

S&P 500 declines for third straight week as dollar resumes rally. OPEC says low oil prices may hit U.S. output by late 2015.

Odd Block: Puts trade in US Silica Holdings Inc. (SLCA), put trade in iShares MSCI Brazil Index (EWZ), and calls trade in Lowes Co. (LOW).

Xpress Block: Check out both the Xpresso and Xpound blogs.

Strategy Block: Tosaw discusses breaking his rules in a recent put spread trade.

Mail Block: Listener questions and comments

• Question from Rahul Tondulkar - Hey guys I want to know how much minimum open in required to say that the option has liquidity? Can anyone please help me out??
• Question from Neal Tompkins - How do I know when an option is going to be less liquid? What are some good suggestions for dealing with less liquid options?

Around the Block: Upcoming Earnings: Tuesday – Oracle; Wednesday - FedEx, Silver Wheaton; Thursday - Nike, Lennar

Option Block 415: How to Play the Lottery

Trading Block: Nasdaq enters energy futures trading to compete with CME, ICE. Lumber Liquidators’ stock soars after company offers business update. Shake Shack gets burned: Stock falls 7%. Earnings today before the bell Dollar General reported record fourth quarter and full year 2014 financial results. After the bell includes Aeropostale Inc. and ULTA Beauty.

Odd Block: Calls go up Steel Dynamics, Inc. (STLD), combos trade in Pinnacle Entertainment, Inc. (PNK), and combos trade in International Business Machines (IBM)

Xpress Block: Alex discusses the OX Idea Hub.

Strategy Block: Some fun stories about not playing the lottery.

Mail Block: Listener questions and comments

• Question from Mark Brant - Do block trades show up on the retail brokerages position ledgers as volume and OI?
• Question from Fred - What is the best way to use an option to speculate on the S&Ps intraday movement?

Around the Block: Watching the sovereign 10-years, VIX, higher Dow. What about the price of oil? Will the contagion spread? Fed. Fed. Fed. Can we get off the road to nowhere?

Option Block 414: The Princess Bride Fed

Trading Block: A mild day on the street. Earnings after the bell today include: Urban Outfitters and Qihoo 360 Technology. Nymex reports incorrect energy prices. Oil rebounds from early drop on modest Cushing stock build. What will the Apple Watch do to the stock?

Odd Block: Puts trade in iShares Dow Jones US Real Estate ETF (IYR); puts trade in CIT BioPharma Corp (CTIC), and; call buyers in Gaming and Leisure Properties (GLPI)

Xpress Block: The best OX feature: The Walk Limit

Strategy Block: Uncle Mike discusses the importance of timing

Mail Block: Listener questions and comments

• Question from IJay - Are a lot of people trading weekly options? If so what are they using them for?

Around the Block: Earnings!

• Tuesday, March 10: FuelCell Energy, Barnes & Noble, VeriFone Systems
• Wednesday, March 11: Shake Shack, Express, Krispy Kreme Doughnuts, Mens Wearhouse, Vera Bradley, XOMA Corporation
• Thursday, March 12: Aeropostale Inc, Dollar General Corp., JA Solar Holdings, Synta Pharmaceuticals, ULTA Beauty

Option Block 413: When Not To Use Options

Trading Block: A quiet day on the street today. ISE preps third options exchange. Expect more volatility in oil says Exxon CEO. NASDAQ near 5000 amid ECB plans, big pharma deal. Earnings today include: Costco, Kroger.

Odd Block: Calls roll in T-Mobile US Inc. (TMUS), big moves in Canadian Solar Inc. (CSIQ), and OTM puts trade in Inc. yet Corporation (INCY).

Xpress Block: Alex discusses the OX Virtual Trade Account and Schwab Mobile

Mail Block: Listener questions and comments.

• Question from Alejandro Vergoza - When is it right to use options and when is it right to use the stock instead?
• Question from Jay - If the market is really falling out of bed what are some good strategies to take advantage of that movement while also minimizing option decay?
• Question from Fred - Is there a problem in the options market with novice options traders not understanding the risks they are taking? Do you think that will that lead to regulatory action down the road?

Around the Block: Earnings tomorrow includes Staples. February jobs report comes out on Friday. Can non-farms save the bulls?

Option Block 412: Sneaky Deltas

Trading Block: Earnings after the bell today: Caesars Entertainment: Late to the party but still a star. Nasdaq hits 5000. Stocks just registered their largest monthly gains in nearly four years. CBOE to expand VIX options trading hours from Monday. Option activity in Lumber Liquidators. What would the Dow look like if it included Apple?

Odd Block: Closing and rolling in The Energy Select Sector SPDR (XLE), bullish bets in National Bank of Greece (NBG), and calls trade in Mens Wearhouse (MW)

Xpress Block: Alex discusses the Virtual Trade tools

Strategy Block: A special Strategy Block from Mark Sebastian about sneaky delta!

Mail Block: questions and comments from listeners

Question from Evan J. - Are there fundamental differences between European and Asia options markets versus the American options market?

Around the Block: Earnings: Tuesday, March 3 - Best Buy, Dick’s Sporting Goods; Wednesday, March 4 - Abercrombie & Fitch, PetSmart, H&R Block; Thursday, March 5 - Costco, Kroger; Friday, March 6 - Staples