The Option Block

Option Block 330: Falklands War Volatility

Trading Block: A mild day on the street. The Russian incursion of Ukraine is still having its effects on the market. CBOE VXST off to a good start. Hedge fund VIX bets on the decline.

Odd Block: Calls go up in Carnival Corp. (CCL), calls trade in Millennial Media (MM), call spreads trade in IAC Interactive Corp (IACI), and puts trade in Dean Foods Co. (DF).

Xpress Block: Happy Tax Day! Market are thin, given this shortened week. Yahoo and Google on the tape at OX.

Strategy Block: Uncle Mike revisits the topic of selling puts in a down market.

Around the Block: A big earnings week! 4/15: SCHW (before) YHOO, INTC; 4/16: BAC (before), GOOG, IBM; 4/17: GS (before), AMD, CMD; 4/21: NFLX.

Option Block 329: The Great SPY vs. SPX Iron Condor Debate

Trading Block: A sea of red on the street today. A lot of directional paper going through OX today. Terrible data coming out of China. CBOE Short-Term VIX product (VXST) launches.

Odd Block: Getting the RDA of RDA puts (RDA), big put blocks trade in Bill Barrett Corp. (BBG), and IV jumping in Tower Group International Ltd. (TWGP).

Xpress Block: A mass exodus from momentum stocks. What exactly caused this?

Mail Block: Commissions and Buy/Writes

• Question from Brian Collamer - Mark mentioned he thought U.S. retail accounts should be trading SPY rather than SPX options in a recent Options Block episode. I 'm selling Iron condors in SPX {2 contracts, just learning...} When I looked at the same size trades in SPY {20 contracts}. The commissions were killer. I like the idea of better fills in SPY and no open outcry trading, but seems like the commissions/fees really make them untenable at my levels. Am I missing something? Thanks for the great podcasts!! Brian
• Question from AJ - I was listening to The Option Block #266 Juice & Paper and you guys mentioned how you saw unusual activity in FCX which looked like a Buy/Write trade. My question: How can you tell when an option trade is a Buy/Write or options paired with shares trade? Thanks.

Around the Block: What will pick up the market?

Option Block 328: Earnings Season Is Back

Trading block: Momentum has been taken out of the market for the past two days - which way will we move? Earnings season is upon us. GLD rundown with Uncle Mike.

Xpress Block: Some hedges were being lifted today. Google the big name on the OX desk.

Strategy Block: This week, Uncle Mike Tosaw discusses selling puts in a down market.

Around the Block: Bank earnings a little later this week. What more could come out of Ukraine? Is "buy the dip" still there?

Option Block 327: You, Too, Can Be an FBI Junior Agent

Trading Block: March options volume rose 14%. ADV was 16,931,924 contracts, equity options volume was 321,641,596 contracts. FBI to investigate high frequency trading - the FBI wants your help!

Odd Block: Big call purchases in DFC Global (DLLR), buy-write in Williams Companies, Inc. (WMB), bullish bet in Resolute Energy (REN), and big block of puts trade in Corning (GLW)

Xpress Block: Google now trades on an adjusted basis: Class A and Class C shares.

Mail Block: Tell us what you want to know.

• Question from Wael Randa - What service do you offer to help options traders. Also I am looking for a scanner to spot big order block by investors. Any free or paid service. Thanks a lot, Samuel.
• Question from John King - @Options could you discuss trade entry for Iron butterfly/condor (ignoring commish)-all at once vs. leg verticals vs. buy strangle then sell straddle?
• Question from Fred Blackes - Geez, you guys are great. Why is it that you were the only ones who read the FIO options actions April 25 2013 correctly? Everybody else had the trader/Hedgie buying the Sept 24 calls. Do you offer any service for learning/advisory

Around the Block: S&P 500 hits another record. Unemployment report Friday. Earnings coming up next week.

Option Block 326: Options Trading for Bitcoin

Trading Block

The Fed is not turning off the spigot anytime soon. Ukraine easing tensions combine to boost the market. Options trading for Bitcoins - Atlas 2.0 launched in Hong Kong and North America. Regulatory rule unlikely for HFT. Author Michael Lewis releases a new HFT book - Flash Boys.

Odd Block

Puts trade in Genpact Limited (G), Call spreads trade in Grupo Televisa SAB (TV) and Call sales trade in iShares MSCI Emerging Markets ETF (EEM)

Xpress Block

Tesla and Amazon still retreating. Idea Hub for Schwab mobile is in its final days of testing - should be out in the next couple of weeks.

Strategy Block

Today, Uncle Mike discusses the importance of closing out short options.

Mail Block

Question from Dylan Harris - Hi, I started trading options about a year and a half ago and got burned a few times which made me realize I did not know nearly what I thought I did and sent me back to the drawing boards. I have spent the time since then learning as much as I can about different options strategies and trying them in virtual accounts. I have come to the conclusion that diagonal spreads fit me pretty well. The question I have is whether there are ways to use delta as a trigger to (in the case of diagonals) roll the short strike down and/or out and if so how successful have these been in implementation and which brokers have them? Thanks! Dylan

Around the Block

March 31 planting report. Janet Yellens speech. End of the first quarter.

Option Block 325: SPX vs. SPY vs. Steven Seagal

Trading Block: A mild day on the street. VIX cash taking a little breather. A lot of put buying in Google, Tesla, Netflix, Priceline, etc. Lululemon gets its first big pop in a while. TLT reaches a one year high.

Odd Block: Combos trade in the VIX, straddle trades in EQT Corporation (EQT), calls trade in Ares Capital Corp. (ARCC), and puts trade in SPDR Barclays Capital High Yield (JNK)

Xpress Block: Growth was in short supply today on the OX desk - a mass exodus. A mixed bag for the biotechs. Idea Hub is coming to Schwab mobile soon! Plus spot VIX products!

Listener Mail Extravaganza: Because if it’s going to be an extravaganza, why not make it about mail?

Question from John King - Could you discuss SPX vs SPY vs ES opts? Bid/Ask slip VS commish, Margin treatment, ex-div/exercise annoyance, etc.? Thanks! - Commish in my case are flat .75/cntr, no tkt chg. For ES opt its $3.65 thx!

Question from Nick Snow - Options block 323 - You mentioned on this show that RBS had a bunch of Aug 10 ATM volume today. I noticed this also and I am not sure I get it. RBS has lots of problems with the queen and the LIBOR fees they pay from loans. I am not sure how I can phrase this so it’s tradeable but if any company where to have an IPO of a company owned with in. Would you buy calls on the company that was public because you assume the cash injection from the IPO would boost the stock of the parent? If you want to get more clarity around that I can but I am sure it will kill your ability to trade RBS. And as an options express account holder tell them to get flies on their scans instead of just condors. :)

Question from Nishant Pant - I love your show so much. Every morning at gym, I am listening to your podcasts instead of music like everybody else. One thing I am frustrated on the internet is everybody is just busy explaining what a straddle or strangle or any other thing is...instead of telling the practical things you need to keep in mind and you guys do such a great job in explaining the gotchas and the greeks which matter. Is it possible for you to add actionable ideas? Tomorrow GRPN is releasing earnings. Maybe you can build upon what you have already taught us and explain an actionable idea and tell us why you think a particular trade you are suggesting makes sense. I would pay for such a podcast at the blink of an eye. Just for the learning aspect of it. Thanks again for your awesomeness.

Around the Block: Treasuries. Volatility. What will Russia do next? Buy the dip…a 52% guarantee. Short supply in growth issues.

Option Block 324: Behold the Power of the Stupid

Trading Block: A mild day on the street. Controversy over SPX settlement on Friday. Mutual fund use of options: public holding and trends (presented at RMC). Minis one year later - boom or bust?

Odd Block: Call buyers jump in Quest Diagnostics Inc, (DGX), big call roll in Coronado Biosciences Inc. (CNDO), puts trade in Spectrum Pharmaceuticals, Inc. (SPPI), and call sellers in Prologis Inc. (PLD).

Xpress Block: Alex talks in depth about the SPX settlement controversy on Friday

Strategy Block: Tosaw discusses the "Stupid." What is it and when do you use it?

Around the Block: Watching and waiting to see what happens in the Ukraine. Parade of Fed people. What’s happening with the super cheap treasury vol?

Option Block 323: Rebar Futures Extravaganza

Trading Block: Russian President Vladimir Putin is an investor in Swiss-based oil trader Gunvor Group Ltd. Time for the global derivatives volume guessing game! Put on your thinking caps and guess the winners in the various product categories: indexes, ags, metals, and more.

Odd Block: Calls spreads trade in Alpha Natural Resources Inc. (ANR); calls trade in Mast Therapeutics Inc. (MSTX); calls trade in Royal Bank of Scotland PLC (RBS), and: puts trade in iShares Japan fund (EWJ).

Xpress Block: New enhancements to the OX trading platform.

Mail Block: Thumped by Theta

Question from Theta Thumper: Here's a question for one of your shows (Options Insider maybe?): You often talk about hedging a portfolio. If you decide to do it the simple way and hedge by buying a long dated 'put' on the SPY (instead of using the VIX) is it better to buy a put at say 15-20% below the market for the full amount of your portfolio or use the same amount of cash you would have used for that to hedge closer to the money but with a smaller percentage of the portfolio? My concept is to use 1% of my portfolio per year as a hedge. Jim (Theta Thumper) Sisters, OR

Around the Block: Stock market edges higher after encouraging economic reports offset interest rate concerns.

Option Block 322: When 50 is the New 70

Trading Block: The VIX was up 25% in the last week. FIA Boca update. US derivatives exchanges have seen improved trading volume. In the US, three of the top five US exchanges grew in Feb.

Odd Block: Calls trade in UQM Technologies (UQM), call buyers jump into Silicon Image, Inc. (SIMG), puts trade in Montage Technology Group (MONT), and call sellers try on some DSW Inc. (DSW).

Xpress Block: A quiet day at OX. Some activity in triple digit names and the 10-year and the Bund.

Around the Block: Ukraine worries, Sundays referendum, US sanctions and Feb US data numbers.

Option Block 321: Old School Bullish Paper

Trading Block: A big selloff on the market today. Angela Merkel yells at Putin. A big day for the banks. The numbers are in! $21.64B derivatives traded in 2013. $12.22B of futures. $11.7B in equity names. VXST options coming in April. More exchanges are on the way - for better or worse.

Odd Block: Some very interesting paper in IRDM, AG, TSM, and XRAY.

Xpress Block: Three new OX products are nearly ready for release, IRIS - Integrated Rapid Information System, Idea Hub for Schwab mobile and Idea Hub for Futures.

Mail Block:

• Question from Illin' - Are the new Mt. Gox IOUs essentially the first Bitcoin derivatives?
• Question from Joseph Riggs - Has OX ever thought about creating its own options product, that it could then promote to its customers? Is that even possible (legal), or are new products the sole domain of the exchanges? Is that why there are so many? They are all trying to get into the new product biz.
• Question from Ian Getz - Basic question, is there HFT in the options market as there is in the equities?

Around the Block: Still keeping an eye on Ukraine, as well as China banking. There might be some quite literal weekend risk.