The Option Block

Option Block 219: Trading Options to Infinity and Beyond

Trading Block: Zynga blows the doors off the market - the 2.5 puts were the sale of the century. Disney reported earlier this week, and is selling well. Activision gets a little bit of a bump to the upside. Shareholders filing suit against Apple as their cash reserve grows.

Odd Block: Puts trade in DeVry Inc. (DV), puts trade in JPMorgan Chase & Co. (JPM), and a big block of calls trades in Marathon Petroleum Corp. (MPC).

Xpress Block: Best Buy and Blackberry were popular at OX. A phenomenal amount of puts selling - short put call is 95% puts to calls.

Strategy Block: Mike Tosaw talks about implied volatility, and other side of the coin to vol.

Around the Block: CBOE earnings 2/8 before the bell. Cisco 2/13. Nvidea 2/13. Tesla Motors 2/13. The President's State of the Union address is Tuesday.

Option Block 218: Do Not Pay for Juice

Trading Block: Selloff keeps some life in the VIX cash. Profit taking, and rumbles out of Spain, weigh on the market. Facebook down 5%. Apple down 2%.

Odd Block: Puts trade in Dell Inc. (DELL), a massive 1x2 Call Spread Trades in Delphi Automotive PLC (DLPH), time spreads trade in Bruker BioSciences Corp. (BRKR), and calls trade in Questar Corp. (STR).

Xpress Block: Alex Jacobson discusses GLD volatility, SPX PM, and premiums. Of 256 companies reporting earning so far, 68.4% have beat estimates compared with a 62% average since 1994.

Mail Block: Let the All-Stars answer your questions.

• Question from Alessandro - What does the all-star panel think of a long Ford 11-12 1x2 put spread for $.05?
• Question from Bob G. - Do you guys prefer to go into earnings long or short volatility?
• Question from Tony O. - Hey Uncle Mike, I’d like your opinion on going long the GLD March 155-168 bullish risk reversal for approximately even money? Or would you prefer to add a short 172 call kicker and collect about $.30?
• Question from Mr. Mikey - Does the OX Idea Hub take into account changes in open interest when highlighting trading idea?

Around the Block: Earnings! Activision on 2/7 after the close, Chipotle on 2/5 after the close, CBOE 2/8 before the open. Plus, CBOE stock has been on a serious tear since ICE/NYSE merger announcement.

Option Block 217: Now What Are We Going to Watch?

Trading Block: Most of the major indexes closed fractionally down, weighed down by some less-than-stellar earnings. There was a bit of interesting activity in Facebook. RIMM, now known as BlackBerry, announced the new BlackBerry 10. Former founder of PFG sentenced to 50 years. Netflix pulls a reverse Widow Maker.

Odd Block: Big put spread goes up in Exxon Mobil Corp. (XOM), a large block of calls trade in Taiwan Semiconductor Inc. (TSM), a closing trade in Take-Two Interactive (TTWO), and puts trade in Expeditors International of Washington Inc. (EXPD)

Xpress Block: Chatter on the OX forums has been heavy in Netflix and Priceline. Not much movement in vol.

Strategy Block: Tosaw discusses selling the put on Ford and buying call options.

Around the Block: Non-Farms comes out tomorrow. What is there to watch after that?

Option Block 216: Embracing Degeneracy

Trading Block: Most indexes closed fractionally up or down on the day. Vol continues to stay at record lows. Action in Ford and Facebook so far this week.

Odd Block: Puts trade in Western Union Co. (WU), a block of calls trade in Facebook Inc. (FB), and calls trade in Take-Two Interactive Software (TTWO).

Xpress Block: Alex discusses the latest from the Idea Hub, which included a lot of SPX PM ideas today. CFTC approved the Euro stock futures in the U.S. today.

Strategy Block: Great Uncle Mike Tosaw discusses selling puts on the S&P 500, a strategy they use at RCM.

Mail Block: The All-Stars answer listener questions.

• Question from Tom S., Philadelphia - Ford March 14 calls for $0.40 - Buy or Sell?
• Question from Charles C., Cambridge, MA - What do you guys think of the Ford March 12-15 bullish risk reversal for even to a nickel debit?

Around the Block: Yahoo! earnings. Ford earnings tomorrow before the open. Facebook on 1/30, Amazon on 1/29, Electronic Arts on 1/30.

Option Block 215: Apple and More Apple

Trading Block: There was a pronounced selloff in Apple following earnings. The interesting news is that almost everything was up today, except Apple.

Odd Block: Unusual activity in CBOE, Infinera Corp. (INFN), and Stryker Corp. (SYK).

Around the Block: More earnings next week. There could potentially be a big move, given how low volatility has been recently.

Option Block 214: Apple Moves and Hysteria Ensues

Trading Block: The markets actually moved today! Apple breaks down below the 500 level. Oil continues to rally. Citi and BoA are both taking it on the chin following earnings.

Odd Block: Some upside love in Brookdale Senior Living (BKD), calls active in Avail Pharmaceuticals, and puts selling in DeVry Inc. (DV).

Xpress Block: Apple earnings have been lighting up the screens of the Idea Hub at OX. A mandatory update on Extend has been released.

Strategy Block: Uncle Mike discusses getting out of nickel options this week.

Around the Block: Intel earnings in. Big earnings next week: Apple and Netflix on 1/23; AMD and Google on 1/22, Southwest and Microsoft on 1/24.

Option Block 213: Waxing Nostalgic about Floor Days

Trading Block: Apple hits 11-month low and is hovering around $500 strike off news of decreasing iPhone demand. Apple selloff put some vol back into the market. Good earnings -- despite the Apple news, 80% of S&P 500 companies that have reported so have beat their earnings estimates. A lot of volume in Dell.

Odd Block: Puts trade in Telefonaktiebolaget LM Ericsson (ERIC); large call seller in Charles Schwab Corp. (SCHW), and calls trading in Sealed Air Corp. (SEE).

Xpress Block: The Marches have gone up this week. Russell and ETFs. Gold, Facebook and weeklies.

The Mail Block: Home Ec tips from our listeners

Tweet from Money Hat - Seabass is crazy! There is no difference between the shiny and dull sides of tin foil. That's just an old wives tale.

Email from Paul - Venice, FL - Can I sell covered calls on a convertible preferred stock? In particular BAC.PR.L. I chose this name because it pays a roughly 9% dividend yield, but I would like to augment that income stream if possible. Thank you for your insight and for your informative (and surprisingly entertaining) program. I didn’t know I could have such a good time learning about options trading.

Around the Block: Earnings, earnings, earnings! Bank of America, Citi, JP Morgan, Morgan Stanley, US Bank Corp.

Option Block 212: Sweep the Leg, Johnny

Trading Block: There was a broad rally across the street, but VIX cash languishing yet again. Alcoa earnings send out a resounding "meh," with the stock essentially unchanged. It’s a premium sellers dream. BATS executes hundreds of thousands of transactions outside NBBO. CBOE rebranding: "Execute Success." Are you sure about that?

Odd Block: Calls trading in Microsoft Corp. (MSFT), Applied Materials Inc. (AMAT) calls trade, large blocks of opening calls trade on Deckers Outdoor Corp. (DECK), and interesting call trading in GT Solar International Inc. (GTAT).

Xpress Block: The Idea Hub feature "Walk Limit" has reached version 2 on the OX platform. Now it’s fully customizable!

Strategy Block: Harvesting credit spreads using multiple weeklies with Uncle Mike.

Around the Block: Interesting earning on the horizon: CITI, BAC, and INTC all on 1/17. GS on 1/16 before the bell.

Option Block 210: New Year, No Volatility

Trading Block: It’s the first episode of 2013! The world hasn't ended, since the heroes in Congress once again settled on a deal. Volatility update.

Odd Block: Takeover talks spur call trading in Zipcar (ZIP), and a large VXX put spread trades.

Xpress Block: Earnings season begins next week with Alcoa on 1/8.

Strategy Block: Mike Tosaw expands upon volatility, using VIX as a weather vane, and selling puts, all wrapped within a well-told story.

Mail Block: Question from Chandra B - Natick, MA: Hey Mark, I love the Radio show...I find myself wanting the next show because I something new every episode. My question is: How should a trader handle stop losses on a naked call/put and/or a vertical spread. When should you call it quits? IBD mentions 8% for stocks, but what is the level for options? Thanks.

Around the Block: How low can vol go? Earnings next week, how big could they be?

Option Block 209: 2012 Year in Review

2012 Year in Review Block:

A lot of whip-saw action in the market today, given the uncertainty in Washington. ETPs have added substantial end-of-day volatility. Scandal in the retail market, specifically the implosion of PFG, has lead to a steady decline in retail options volume. Peak 6 acquired Penson and created Apex Clearing, which caused a lot of problems. A lot of price movement in the underlying in Apple this year. A big SPY dividend trade ended up costing millions of dollars due to a clearing error. VIX is cheap, vol is low - we've heard this non-sense all year. Knight trading collapsed. Hurricane Sandy closed the markets in New York for two full days. ICE acquired NYSE Group. The expansion of weeklies continues to be a big story. Mini Apple will be release next year in March. Worst trade of the year: Someone had the bright idea to buy 20,000 VIX Feb 70 calls.