The Option Block

Trading Block: And we're back up!

Earnings highlights for the week:

• Tuesday - GE, Sony, BP, FB, eBay
• Wednesday - GM
• Thursday - Apple
• Friday - ExxonMobil, Cboe, Alibaba, Chevron
• IBM buys Red Hat for $34B

Odd Block: Put summary in Tesla Motors Inc. (TSLA), calls going up in Proctor & Gamble Co (PG), call love in Exelixis (EXEL) and put love in Ford Motor Company (F).

Strategy Block: Uncle Mike discusses butterflies for buying the dip

Around the Block/This Week in the Markets

• Oct 29: Personal Income
• Oct 30: Consumer Confidence
• Nov 1: Jobless Claims, Construction Spending
• Nov 2: Unemployment, International Trade, Factory Orders

Trading Block: Holy crap and holy crap!

Earnings:

• World Wrestling Entertainment (WWE): Earnings topped views but revenue missed as ticket sales to live events fell, and the company plans to go ahead with an event in Saudi Arabia.
• Twitter (TWTR): The stock shot up 16%, near 32, during morning trading on the stock market today.
• Amazon (AMZN): ATM straddle: $102, approx. 6%
• Alphabet (GOOGL): ATM straddle: $57, approx. 5%

AND Chinese operatives were able to infiltrate motherboards made by a US company that sold to Apple and Amazon: Bloomberg

Odd Block: Put summary in Tesla Motors Inc. (TSLA), call sale in Plains All American Pipeline (PAA), and call sale in Magellan Midstream Partners (MMP)

Mail Block: Options question of the week

Earnings are back with big tech names on the docket. Which of the following will be lighting up your #Options trading this week? Bonus points for your preferred strategies - e.g. call vertical, straddle, etc.

• Microsoft $MSFT
• Amazon $AMZN
• Alphabet $GOOGL
• Twitter $TWTR

Listener questions and comments

• Question from RonS6 - What's your suggested minimum account size to start trading options?
• Question from Tony - Is $HMNY the most option-like stock on the planet?

Around the Block/This Week in the Markets

• Oct 26: GDP, Consumer Sentiment

Trading Block: Economic Calendar - Top 5 Things to Watch This Week and U.S. midterms a mere blip on equity options traders' radar.

Odd Block: Call sale in EnLink Midstream Partners LP (ENLK), puts trade in Mellanox Technologies, Ltd. (MLNX), and risk reversal/collar in Harley-Davidson Inc (HOG)

Mail Block: Options question of the week

Earnings are back with big tech names on the docket. Which of the following will be lighting up your options trading this week? Bonus points for your preferred strategies - e.g. call vertical, straddle, etc.

• Microsoft MSFT
• Amazon AMZN
• Alphabet GOOGL
• Twitter TWTR

Listener questions and comments:

• Comment from Kelly Lef - Thought the user tip to exercise deep ITM calls to save on the spread was a good one. So I checked a few of my stock replacement positions that had gone ITM. Turned out the spreads were fairly similar to the spread on the underlying stock index so the any savings were pretty small. Not really worth the hassle to go through the exercise process. Maybe I'm just trading a more liquid index than that listener or am I missing something?

Around the Block/This Week in the Markets

• Oct 24 - New Home Sales, Beige Book
• Oct 25 - Durable Goods, International Trade, Jobless Claims
• Oct 26 - GDP, Consumer Sentiment

Trading Block: What a week - volatility is coming back down, and the crystal ball is looking nice! Dow tumbles 350 points as technology and communication-services stocks tank in midday trading.

Odd Block: Tesla put summary, funky put palooza in General Electric Company (GE), put sale in Activision Blizzard Inc. (ATVI) and call palooza in KeyCorp (KEY).

Mail Block: Options question of the week

Time to break out your crystal balls. Volatility is on everyone's mind these days. Will earnings season add to the growing storm? Or will cooler heads prevail this week? Quite simply - Where will $VIX close this Friday 10/19?

• Here: 19-22
• Higher: > 22
• Lower: 17-18.99
• Even Lower:

Listener questions and comments:

• Question from N45 - When is it not worth closing out losing long options positions and just keep them on as lottery ticket flyers? Is it a nickel?
• Comment from Mark Brant - SPX -4d/-6d/+8d Calendar Ratio Straddle div +35% PREMIUM! Easily getting filled at the mid-point. Also sold SNAP 41d $7 Puts 0.81! Just get the crash over with. Why drag it out for years? Also bought June 2020 TSLA $10 puts for a buck!

Around the Block/This Week in the Markets:

• Oct 19: Existing Home Sales

Trading Block: What a week! Uncle Mike leaves and the market falls apart. Earnings move reports available now. Chinese operatives were able to infiltrate motherboards made by a US company that sold to Apple and Amazon: Bloomberg

Odd Block: TSLA 50 mystery put update. Plus, TSLA put palooza.

Strategy Block: Uncle Mike Tosaw discusses how to get bullish in a market like this. 20,360 RRC Jan20 13.0 puts traded for $1.19. 3599 HBAN Nov 15.0 calls trade for $0.24. 2000 LPI Nov 7.0 calls traded for $0.21.

Mail Block: Options Flash Poll

Time to break out your crystal balls. Volatility is on everyone's mind these days. Will #EarningsSeason add to the growing storm? Or will cooler heads prevail this week? Quite simply - Where will $VIX close this Friday 10/19?

• Here: 19-22
• Higher: > 22
• Lower: 17 - 18.99
• Even Lower:

Around The Block/ This Week In the Markets

• Oct 15: Retail Sales
• Oct 16: Industrial Production, JOLTS
• Oct 17: Housing Starts, FOMC Minutes
• Oct 18: Jobless Claims
• Oct 19: Existing Home Sales

Trading Block: OCC cleared contract volume up 8.7% in September. Total cleared volume up 18.6% year-to-date. Equity options volume up 14.3% in September and up 21.7 percent year-to-date.

Odd Block: Call sale in Glu Mobile Inc. (GLUU), Puts trade in AMETEK, Inc. (AME), and Call-palooza in Delta Air Lines, Inc. (DAL)

Mail Block: Volatility flash poll, plus live questions from Duke University

VIX has soared to 18.50 & $VVIX hit 120. Is this the new normal or a quick blip? Let's put that to the test starting with this week. Quite simply - Where do you think VIX will close this Friday?

• Here: 18-19.5
• Higher: > 19.5
• Lower: 16 - 17.99
• Lowest:

Around the Block: What's on the radar going into the weekend?

Trading Block: An overview of STA 2018: Stocks, stocks and more stocks. Google searches for hedges is ticking up. VIX searches anemic compared to Feb.

Strategy Block: Uncle Mike Tosaw discusses 1x2 ratio spreads

Mail Block: Listener questions and comments

• Question from David Kotlyar - Hey mark, Could you discuss the Jun 2019 400 SPY calls? Very cheap and getting some love (5000+ contracts OI)
• Question from JL Smith - How important is OI when you're trading options? Are there other indicators that you focus on instead?
• Question from One0761 - Are we in the midst of a major correction.
• Question from JustinCredible18 - Any thoughts on BBD Nov calls? Nice Brazil stock rally going on.
• Question from KBX32 - What is the cheapest way to hedge my portfolio with options?

Around the Block/This Week in the Markets

• Oct 5: Unemployment, Consumer Credit

Trading Block: The Trump trade deal: Bringing Canada and Mexico back to the table. The Tesla investigation was a farce: seems like the SEC just wanted some headlines.

Odd Block: A summary of Tesla (TSLA) puts, options palooza in New Age Beverages Corp (NBEV), put love & call stupid in WisdomTree TR/Japan Hedged Equity (DXJ) and opening put palooza in AVEO Pharmaceuticals (AVEO)

Strategy Block: Uncle Mike Tosaw discusses investing 101.

Mail Block: Volatility Flash Poll

The CBOE Skew Index alarmed many when it soared above 150. Of course, every index tells its own skew story. Which index do you think has the steepest skew right now (aka 25D put vol vs. 25D Call vol)?

• 41% - Russell 2000
• 26% - S&P 500
• 30% - Nasdaq
• 3% - Other

Listner questions and comments:

• Question from Oytrate - What is a reason that someone would write ITM covered calls? Seems like a waste of time to me since you're capping all of your upside.
• Comment from J3dingle - Thanks Mark, I really enjoyed that segment. There was so much going on at that time, I actually forgot all about the short selling ban. I remember seeing Morgan Stanley at sub-$10. Bear Stearns bought for $2, then up-ed to $10. Citi trading for less than a $1? (Pre-reverse split)
• Question from UpwardMomentum - Approximately what percentage of your unusual option activity trades are winners?

Around the Block/This Week in the Markets:

• Oct 1 - Construction Spending
• Oct 4 - Jobless Claims, Factory Orders
• Oct 5 - Unemployment, Consumer Credit

Trading Block: Earnings!

• Disney
• Blackberry

Plus, Google searches for hedges are ticking up.

Odd Block: Puts trade in Bed Bath & Beyond Inc. (BBBY), call love in Ally Financial Inc. (ALLY) and call love in Virtu Financial Inc. (VIRT).

Mail Block: Volatility Flash Poll

The CBOE Skew Index alarmed many when it soared above 150. Of course, every index tells its own skew story. Which index do you think has the steepest skew right now (aka 25D put vol vs. 25D Call vol)?

• Russell 2000
• S&P 500
• Nasdaq
• Other

Around the Block/This Week in the Markets

• Sep 28: Personal Income, Consumer Sentiment

Trading Block: Snap stock rises after company announces new Amazon partnership; Earnings: Walt Disney Co (DIS)

Odd Block: Aggressive call sale in TransUnion (TRU), call sale in Williams Companies Inc. (WMB) and puts/calls deal in Sirius XM Holdings Inc. (SIRI).

Strategy Block: Uncle Mike Tosaw discusses both trading in a low Vol market and how to pay for puts.

Mail Block: Is it just me?

• Question from Niny3 - Is it me? I seem to only get filled on my limit option order when the stock moves aggressively against me. At that point I'm almost better off canceling the order. What am I doing wrong? Should I just go to market?

Around the Block/This Week in the Markets:

• Sep 25 - Consumer Confidence
• Sep 26 - New Home Sales, FOMC Meeting
• Sep 27 - Jobless Claims, GDP, Durable Goods
• Sep 28 - Personal Income, Consumer Sentiment