The Option Block

Option Block 259: Reverse Splits & Twinkies

The all-stars are joined by guest co-host Henry Schwartz, the Founder of Trade Alert.

Trading Block: A modest, broad rally on the street. Earnings season is in full swing. Pre-deal call in LEAP from Friday. Earnings action in Goldman-Sachs. CITI earnings before the open. Bloomberg beating the drum on VIX puts. Retail sales sluggish, up less than expected in June.

Odd Block: Combos trade in United Online, Inc. (UNTD)

Xpress Block: The Twinkie is back. A slow day as everyone is keeping their powder dry for the big earnings later this week.

Around the Block: Earnings: IBM, Intel and Bank of America - 7/17; Microsoft, Nokia, Google and Chipotle - 7/18.

Option Block 258: Highly Accommodative Policy

Trading Block: Uncle Ben's comments about "highly accommodative policy" spark yet another rally. It's going to be all about the earnings next week. It has been "rally ho" in the metals.

Odd Block: Calls trade in Colfax Corp (CFX), puts trade in Atlas Pipeline Partners, L.P. (APL), calls trade in WisdomTree Investments Inc (WETF), and calls trade in Whiting USA Trust (WHX).

Xpress Block: It's a race to 1,000 between Priceline and Google. Green lights all over the screen today.

Listener Mail: Gamma effect

Question from Neal Rivers - You guys have discussed the "gamma effect" before on this program. My question is - how far before an earnings announcement does this typically kick in? Can I buy some gamma two or three weeks before the announcement and expect to pay no decay? Or is it more like two or three days?

Around the Block: JP Morgan and Wells Fargo & Co. both have earnings on Friday. Goldman Sachs - 7/16; Microsoft, Nokia, Google, Chipotle - 7/18; and IBM, Intel, Bank of America 7/17.

Option Block 257: Deep Dive into Gold, Silver and Oil

Interview Block: Today's guest is Matthew Bradbard, futures broker from RCM Asset Management. Hel discusses recent trends in metals and energies with the Option Block gang.

Trading Block: Another broad, but mild rally on the street. Zynga rallies hard on the news of new CEO: snatching a dubious hire from Microsoft. INTC down 4% off analyst downgrades.

Odd Block: Calls trade in Zynga Inc. (ZNGA) and call spreads trade in Elan Corp. (ELN).

Around the Block: Alcoa earnings, which means this is the start of earnings season!

Option Block 256: The Great AAPL and GLD Rebound:

Trading Block

Another broad rally - a "doing stuff" kind of day. Gold spikes. Blackberry annihilated post-earnings. Corzine finally charged in MF Global debacle. The Options Industry Council (OIC) announced today that 361,180,257 total options contracts traded in June, up 10.86 percent compared to last year.

Odd Block

Calls Rolled in Sina Corp (SINA)

Legging into a Butterfly in Tempurpedic (TPX)

Puts Trading Air Products and Chemical (APD)

Xpress Block

Metals, Tesla and Apple were lighting up the tape. Alex gives us a good lesson about margin.

Strategy Block

Tosaw walks us through his recent strategy involving moving to cash after some rumbling in SPY

Around the Block

Earnings looming on the horizon. Remember the Independence Day holiday is this Thursday - be aware to the effect of theta.

Option Block 255: Balloon is Over-squeezed

Trading Block: Rally Ho! Again. Vol crushed, but not as aggressively as expected. Are the pronouncements of the death of Apple's vol premature? Prosecutors finally get around to charging Corzine in MF Global debacle. 30-year mortgage rate at 4.46%.

Odd Block: Calls trade in Statoil ASA (STO), Goodrich Petroleum Corp (GDP), and New York Community Bancorp (NYCB).

Xpress Block: Alex discusses GDX, Newmont Mining (NEM), and other trade ideas from the Idea Hub.

Around the Block: Blackberry earnings before the open.

Option Block 254: Unlearn What Does Not Work

Trading Block: Futures, interest rates, bonds and the 10-year dominated trading today. It was an otherwise slow day for volatility.

Interview Block: This week's guest is Nate Bluestein from Pivotal Trading Concepts. He discusses how Pivotal Trading Concepts was created and helps educate traders.

Odd Block: Calls trade in Web MD (WBMD), and puts Trade in Gerdau S.A. (GGB).

Xpress Block: It was a pretty quiet day at OX. Alex discusses VIX, CBOE and the 10-year.

Around the Block: The 10-year could continue to determine what's happening in the market. Which way will China play out?

Option Block 253: Market Maelstrom

Trading Block: The broad indices were down over 2%. All red, all day. Fed will cut $85 billion in monthly bond purchases by $20 billion. VIX cash breaks through the 20-handle for the first time since December. Apple, Google, GLD and more!

Odd Block: Call combo unwinds in the CBOE Volatility Index (VIX) for big money, puts trade in Fleetcor Technologies (FLT), and puts trade in Contango Oil and Gas Co (MCF).

Xpress Block: It's about time for an Alex Jacobson-style rant. This is a market for options!

Strategy Block: It's a two-for day in the strategy block: Risk vs. margin and being long-term bullish but short-term cautious.

Around the Block: Will there be more selloff in the future? Should we keep the power dry going into the weekend?

Option Block 252: The Dangers of Covered Straddles

Trading Block: Market rallies ahead of the Fed, but lost steam in the late session. Gold selloff ahead of the Fed.

Odd Block: Puts trade in PVR Partners, LP (PVR), calls trade in Insmed Incorp. (INSM), and puts trade in UltraShort Real Estate Proshares (SRS)

Xpress Block: Netflix moves over $15, but otherwise, not a very exciting trading day

Listener Mail: The floor belongs to the listeners.

Question from Dalton Hicks - I’ve just discovered this show and I think it's fantastic. Thanks for all of your great material. I've learned quite a bit. I wanted to write in today to ask about the new strategy I've stumbled upon in my trading. I used to be a covered call seller in individual equity options. But I've recently started thinking about kicking this up a notch by turning into a "covered straddle seller." This strategy has many benefits over a traditional covered call. I’ve never heard this approach discussed on this program (at least in the recent episodes that I've heard), so I'd like the host's take on this exciting new strategy.

Around the Block: Waiting for Bernanke.

Option Block 251: Insider Trading, Options-Style

Trading Block: Is the VIX going backwards? The rally has returned. Jobless claims fall by 12,000, sparking the rally. An insider trading case involving options. “For the first time since its inception, high-frequency trading, the bogey machine of the markets, is in retreat.” VXX options hit record open interest. Exchanges finally subject to fines for misconduct.

Odd Block: Unwinding in Dole Food Company, Inc. (DOLE), calls trade in Monster Worldwide Inc. (MMW), and spreads trade in Sangamo Biosciences Inc. (SGMO)

Xpress Block: United Airlines showcased in the Idea Hub today. Updates on the Walk Limit.

Mail Block: Keep those questions coming.

• Question from Jillian T. - Why is it so difficult to crack down on insider trading in options?
• Question from Doug K, Halifax, Nova Scotia - I’ve been long spy shares for much of the recent rally. Now I'm more than a little concerned. I've learned about collars through the great shows on this network. Do you think this is a good environment to consider a zero cost collar? Is a spy put/put spread a better option? Or would you recommend something else entirely? Thanks for all of your insight over the years.
• Question from T-Bill - Does OX defer commissions when I close out short options for pennies?

Around the Block: Markets are thin for the summer. A lot more 1% movement days in our near future.

Option Block 250: Goldilocks Non-Farms Numbers

Trading Block: It was a quiet day on the market. Non-farms announcement came out last Friday. What are some trading ideas following a large event like this?

Odd Block: Calls trade in Linhas Aereas Inteligent (GOL), puts trade in Celldex Therapeutics Inc. (CLDX), and put spreads trade in Southern Copper Co. (SCCO).

Xpress Block: S&P changed the outlook on U.S. debt from negative to stable. How could this have an effect on the 10-year?

Around the Block: What economic impact could the flood in Europe have on the market? Earnings are only five weeks away.