The Option Block

Option Block 391: Crude Oil Madness

Trading Block: A bloodbath in the tech and commodities sectors. Mini Apple crash catches the market off-guard. Energy and oil had their own crash on Friday. The Options Industry Council (OIC) announced today that 294,770,356 options contracts traded in November, down 6.26 percent compared to last November.

Odd Block: Puts trade in Marathon Oil Corp. (MRO), calls trade in Bristol-Myers Squibb Co (BMY), and call ratios trade in Barnes and Noble Inc (BKS)

Xpress Block: Energy alternatives and futures options

Strategy Block: Tosaw discusses diagonal risk reversals

Around the Block: Keeping an eye on crude and Apple

Option Block 390: Squeezing Out the Vol

Trading Block: Short holiday week - When might the market come out? Answer: Monday! Implied Vol in the basement. VIX crushed.

Odd Block: Calls trade in TIVO Inc. (TIVO), size calls trade in Demand Media Inc (DMD), and calls trade in Tiffany and Co. (TIF)

Xpress Block: With the Viceroy out with the flu, we will play the Trading Patterns guessing game.

Strategy Block: Uncle Mike Tosaw discusses hedging using futures.

Around the Block:Only Option Block of this week.

Option Block 389: Fly Adjustments and Dividends

Trading Block: A mild day on the street. Best Buy profit beats estimates as costs fall. Fresh SEC crackdown on ‘flash crashes.’ Correlation gauge for S&P 500 falls at fastest rate ever.

Odd Block: Upside call buyers in Axiall Corp. (AXLL), put roll in Stillwater Mining Company (SWC), and calls roll in Huntsman Corp (HUN)

Xpress Block: Behind the scenes at Schwab featuring the roll ticket.

Mail Block: Listener questions and comments

Question from Faye Cuzername - Thanks for the feedback on my Goldman trades by the way. It worked ok but I think I understand what I should have done. Got a new one for you. Bought an 11/7 weekly SPX fly 2010/2030/2050 for 6.80 on 11/5. The fly did not really move in value until Friday, even though SPX was slowly moving to short strike. Trade did everything I wanted but I thought I would be able to capture more profit on Thursday. What did I miss or am I just being greedy?

Question from Cuda6 - What is an easy way to spot an upcoming dividend using options? Thanks.

Around the Block: Presidential speech on immigration tonight. Crude and the 10-year.

Option Block 388: Japanese Volatility

Trading Block: U.S. stocks open lower as Japanese recession weighs. American markets poised for a pullback after four straight weeks of gains. Japan shocks as economy slips into recession. Cracks widen at OPEC as oil prices tumble.

Odd Block: Size combo in Standard and Poor’s 500 Index (SPX), puts trade in iShares MSCI Japan (EWJ), call traders in Buckeye Partners, LP (BPL)

Xpress Block: Today was stock pickers day. OX named one of the top 100 places to work by the Chicago Tribune.

Strategy Block: Uncle Mike talks about the importance of doing stuff, BUT also the importance of not doing stuff

Around the Block: Keeping an eye on the unease in Japan, especially with regard to forex, the Yen and the Euro in particular, and debt instruments. VIX indicates a lot of concern in the market. Will OPEC hold the 70-level? Premium sellers aren’t there right now.

Option Block 387: Crude Oil Put Palooza

Trading Block: Gold struggles to find buyers in third quarter. Lower oil prices give a lift to the American economy. Buffett to trade P&G stock to buy Duracell.

Odd Block: Calls trade in Cyberark Software LTD (CYBR), calls trade in Demand Media Inc. (DMD), call ratios trade in Charter Communications, Inc. (CHTR)

Xpress Block: Amazon and Apple hit near-term highs.

Mail Block: Listener questions and comments

• Question from DJSpin - What is your best play for a Santa Claus rally in SPY?
• Question from Eliac - Which OTM call strike performs the best when the underlying rallies?

Around the Block: Looking at crude and the 10-year. What will the bottom be in crude? More all-time highs in AAPL. Will it be a happy Christmas for holders of AAPL?

Option Block 386: Massive GLD Adjustment Breakdown

Trading Block: U.S. stocks move higher again. Twitter shares could move 5 percent in either direction by Friday. BABA soars in China ahead of "Singles Day"

Odd Block: Large buy writes go up in Wal-Mart Stores (WMT), call buyers in Lions Gate Entertainment (LGF), and call sweeps in Hovnanian Enterprises, Inc. (HOV).

Xpress Block: Alex discusses preparing for tax season

Strategy Block: Uncle Mike Tosaw and GLD

Around the Block: CSCO earnings 11/12 - after. Schwab to host live interactive trader education day on 11/13.

Option Block 385: Theta Decay

Trading Block: Business welcomes midterm GOP takeover, what can the market hope for from the GOP congress? U.S. stocks mixed as investors’ eye oil prices. Euro falls to two-year low after Draghi signals more ECB action. Tesla shares rallying after earnings.

Odd Block: Giant call traders in SPDR S&P Oil and Gas Explorers (XOP), puts trade in Geron Corp. (GERN), and large calls trade in Education Management Corp (EDMC)

Xpress Block: Alex discusses the methodology behind premium harvesting and the IdeaHub.

Mail Block: Listener questions and comments Question from Mukund Ambarge - Hi Team, I had a question on theta decay. I understand that delta is in constant flux with every tick move in stock, the delta/gamma changes. IV is in constant flux with buying and selling of options and volume etc. So Vega changes with option transactions. But theta decay is the only one which is always in a steady pace i.e. it’s not like it will decay quickly today and slowly tomorrow. The question is, when the theta decay is really adjusted in the prices of options. Do the theta decay get adjusted at every tick move - or every hour? If it is adjusted daily. Then when is the theta decay taken out of options. Early morning before start of trading? Or late in the day like last few minutes that whole days theta is taken out? Also I do not know when is weekend theta taken out of prices? Friday early morning or Friday ending or middle of the day? Basically when does market maker run the prices with the model and set the prices? Only once before trading starts or does he keep adjusting every minute/hour/tick based on demand/supply?

Around the Block: Where’s OX this week? Option Pit is hosting “Using Options to Trade Direction.”

Option Block 384: BABA Preview and Ratio Spread Breakdown

Trading Block: A mild day on the street. The bloodbath in crude continues - closing down on the day. Alibaba now worth more than Wal-Mart. Apple iWatch to be delayed - not affecting AAPL on the day.

Odd Block: Calls trade in CBS Corp. (CBS), puts trade in Gerdau SA (GGB), and giant call buyer in Autodesk (ADSK).

Xpress Block: Amazon, declining oil and other conversation topics from OX social.

Strategy Block: Uncle Mike Tosaw discusses the ratio spread strategy in combination with stock.

Around the Block: Non-Farms on Friday. BABA before the bell. ATVI - 11/4, DIS - 11/6 after, PCLN - 11/4 before, TSLA - 11/5 after.

Option Block 383: The Crazy VIX

Trading Block: Starbucks and LinkedIn earnings after the bell. SEC warned before about early release weak spot. U.S. stocks fall amid GDP, jobless data; Visa boosts Dow.

Odd Block: Calls trade in Generac Holdings Inc. (GNRC), size buy writes go up in Itau Unibanco Holdings Inc. (ITUB), and call selling in SPDR S&P 500 ETF Trust (SPY)

Xpress Block: Now introducing a light version of premium harvesting for Schwab mobile

Around the Block: Loads of earnings on the horizon. CBOE tomorrow before the bell. Tesla 11/5.

Option Block 382: TWTR Drops and the Viceroy Returns

Trading Block: A mild back on the street today. The return of the Viceroy! Twitter options pricing in big stock move - earnings after the bell.

Odd Block: Combos trade in Gentherm Inc. (THRM), put spreads trade in Altisource Portfolio Solutions (ASPS), and calls trade in Alaska Air Group, Inc. (ALK)

Xpress Block: Alex is back!!! Three- and four-leg spread trades are now available on the OX trading platform

Strategy Block: Uncle Mike Tosaw discusses tweaking diagonal spreads

Mail Block: Listener questions and comments

Question from Richard D: Hey Options Insider Team! I cannot seem to figure out how to post comments under the individual shows, so I will use this route. Below I have 3 questions that hopefully you can read on Volatility Views or Option Block. I am wondering what the key reports are that affect the Agricultural future options (corn, soy, wheat . . .) and where I can get more info and track these reports? Also, do options on these ags typically behave the same way equity options behave leading up an earnings report? Finally, what are the most liquid futures options besides gold, silver, and oil? I do not typically listen to the Futures Roundtable because the episodes I have listened to are too deep for my level of knowledge. Thank you for all of your great work! The network is a fantastic resource.

Around the Block: Earnings tomorrow FB and EA.