The Option Block

Trading Block: The week in trading (so far!)

• VIX is back over 14!

Earnings:

• Tuesday - Home Depot
• Wednesday - Macy's, Cisco
• Thursday - Walmart, JD.com, Nordstrom, Nvidia
• Friday - John Deere

Odd Block: Shares surge in Rent-A-Center Inc. (RCII) (from 6/18), put spread in IQIYI Inc. (IQ) (from 6/21), ratio call spread in Melco Resorts & Entertainment (MLCO) (from 6/4)

Mail Block: Listeners take over

QOTW: This week we would like to know more about your level of #options expertise. Quite simply - how would you describe yourself at a dinner party?

• Current/Former Pro
• Retail Options Wiz
• Retail Options Dabbler
• Looking to Get Started

Listener questions and comments:

• Comment from CNelsen - Puts, calls. Calls, puts. Does it really matter?
• Question from Ling - I've heard some educators say that you should never hold out for the max profit in an options spread trade because that means you held onto it too long. Is this the case? Do you agree? Thx.
• Question from GunPowderJim - How do you calculate profit/loss on a ratio spread? If I buy 1 call and then sell 2 more do I average across the 3 contracts to determine the P/L on the spread?

Around the Block/This Week in the Markets:

• Aug 14 - Import and Export Prices
• Aug 15 - Retail Sales, Industrial Production, Treasury International Capital
• Aug 16 - Jobless Claims, Housing Starts
• Aug 17 - Consumer Sentiment

Trading Block: A week in review from a trading perspective.

• The 30 handle is in the rear-view mirror for VXX - more puts hotting the tape.
• OCC Cleared Contract Volume Up 15 Percent in July

Earnings:

• Monday - Tyson, Marriott, Tenet, NeoPhotonics, Vericel
• Tuesday - Snap, Disney
• Wednesday - CVS, Roku
• Thursday - Coca-Cola, Viacom, Dropbox

Odd Block: Review from 7/9: Rolling July put spread in iShares Russell 2000 Growth Index (IWO), vertical opening in Endo International PLC (ENDP), and small verticals in Amgen, Inc. (AMGN)

Strategy Block: Uncle Mike Tosaw discusses both metals to buy now and WWF Champs from 1984-1988!

Mail Block: Volatility quesiton of the week

VXX has finally broken through the 30 handle. Many of you are fascinated with the ongoing saga of the $VXX Jan 10 Puts. OI is over 200k and thousands continue to trade for $.01. Our question: Would you trade these puts?

• Yes: Buy for $.01
• Yes: Sell for $.01
• No. It's Just Gambling
• I have enough $VXX Puts

Around the Block/This Week in the Markets:

• Aug 7 - JOLTS
• Aug 9 - Jobless Claims, PPI
• Aug 10: Consumer Price Index, Treasury Budget

Sometimes technology gets the best of us. This was one of those cases.

We were able to discuss:

• Picard vs. Kirk
• VXX breaking the 30-handle
• OCC volume numbers for July
• Options question of the week
• How to handle the fixed time aspect of trading options?

Trading Block: A review of the week from a trading perspective.

• APPL (earnings were on Tuesday)
• Apple makes history by becoming first U.S. company to reach $1 trillion market value

Earnings:

• Thursday - Activision/Blizzard, Shake Shack, Blue Apron, Go Pro
• Friday - CBOE

Odd Block: WMB Call-palooza and GRPN Pre-Earnings Call 1x2.

Strategy Block: Uncle Mike Tosaw discusses the possible outcome of more rate hikes.

Mail Block: Listener questions and comments

Question of the week: EarningsSeason is still in full swing. Which names will dominate your #Options trading this week?

• Apple - $AAPL
• Tesla- $TSLA
• GoPro - $GPRO
• CBOE - $CBOE

Listners weigh in:

• Question from Andrew Lane - I tried searching for options on the major advisor news sources including Pensions & Investments and Financial Advisors magazine and came up blank. Why do these mainstream outlets ignore this space? Where should I go to learn more about options for advisors?

Around the Block: What's coming up of interest?

Trading Block: The week in trading (so far)

• Social media tech stocks are taking a bath

Earnings:

• Tuesday - Apple
• Wednesday - Tesla
• Thursday - Activision/Blizzard, Shake Shack, Blue Apron, Go Pro
• Friday - CBOE

Odd Block: More Jan 2019 50 Puts in Tesla Motors Inc. (TSLA), line-in-the-sand puts in Adient PLC (ADNT), and put sweeps in AK Steel Holding Corporation (AKS).

Mail Block: Options question of the week

EarningsSeason is still in full swing. Which names will dominate your options trading this week?

• Apple, $AAPL
• Tesla, $TSLA
• GoPro, $GPRO
• CBOE, $CBOE

Listener comments:

• Comment from Value Dissenter -Tesla. Yay puts.
• Question from Ellen - When would you buy those $TSLA Jan 50 puts?
• Question from LOO7 -I think the market is top heavy here. What should I be looking at in terms of options trades? I mostly own spy in my portfolio. Straight 5% OTM puts or something else?

Around the Block: What's on the radar for the rest of the week?

Trading Block: A review of the week from a trading perspective

• Earnings: Thursday - Amazon, McDonalds, Comcast, Starbucks, Nokia
• Friday - Twitter, Merck
• Facebook (FB) is 'face-planting' after hours tonight.

Earnings Flash Poll: Facebook (FB) is getting crushed post-earnings, trading down nearly 20% after-hours. Assuming it opens at that level, what's your next FB options trade? Other suggestions? Submit them below:

• Buy Calls/Spreads
• Buy Puts/Spreads
• Sell Puts/Spreads
• Sell Calls/Spreads
• Comment from ProBuck:Sell OTM monthly puts
• Comment JackDanielsTrades:Prob stay away

Odd Block: More Jan 2019 50 Puts in Tesla Motors

Strategy Block: Uncle Mike Tosaw discusses pros and cons of getting long Facebook.

Mail Block: Listener questions and comments

Volatility Flash Poll: VXX is back in the erosion zone. Many short vol traders are anxiously waiting for it to break the 30 handle. When do you think VXX will finally break 30? This week? Next Week? Never? Let us know below:

• 5% - Week Ending Fri 7/20
• 32% - Week Ending Fri 7/27
• 32% - Week Ending Fri 8/3
• 31% - Never! I'm Long Vol!

Listener question:

• Question from Allen T. -Does it count as a calendar if it's on two different underlyings? Or is that more of a pairs trade?

Around the Block/This Week in the Market:

• Jul 27 - GDP, Consumer Confidence

This best of Option Block episode was originally p>osted on July 22nd, 2016

Trading Block: Most major markets off 0.5% or more. VIX cash watch. Earnings today (before) Dunkin Brands,General Motors, Marriott Vacations, Southwest Airlines; (after) AT&T, Chipotle Mexican Grill, E*Trade Financial (ETFC). Apple Watch is a flop!

Odd Block: Calls trade in Nobel Corporation (NE), calls trade in Teucrium Corn Fund (CORN), calls and puts trade in Ebay Inc (EBAY), and calls trade in Mattel Corp (MAT).

Mail Block: Listener questions and comments....LIVE!

• Size aside, what are the primary benefits of using SPX instead of SPY.
• What is going on in the VIX Aug 13 puts?
• Which names are the most reliable premium writes each quarter?
• Is there a tradeable pair between VIX and another member of the family of volatility products?
• What to do with the upcoming UVXY reverse split?

Around the Block: Earnings on Friday: American Airlines, General Electric Company, TCF Financial, Whirlpool Corporation.

Trading Block: A review of the week in trading

• Amazon and Apple: The race to $1 trillion.

Earnings!

• Thursday - Microsoft
• Friday - GE, Honeywell
• MSFT (after the bell) - $104.70, ATM straddle: $3.70, approx. 3.5%

Odd Block: Bullish risk reversal in Discovery Communications Inc. (DISCA), Rolling call speeds in Omnicom Group Inc. (OMC), Call 3-way in Hanesbrands Inc. (HBI)

Strategy Block: Uncle Mike Tosaw discusses options pairs vs. stock pairs.

Mail Block: Listeners weigh in

Volatility Flash Poll: $VXX is back in the erosion zone. Many short vol traders are anxiously waiting for it to break the 30 handle. When do you think $VXX will finally break 30? This week? Next Week? Never? Let us know below:

• Week Ending Fri 7/20
• Week Ending Fri 7/27
• Week Ending Fri 8/3
• Never! I'm Long Vol!

Last week's option question of the week: Yup it's earnings season once again. Options traders are gearing up for a busy season. Which names do you think will dominate your options trading this season?

• 17% - $NFLX
• 44% - $AMZN
• 22% - $TSLA
• 17% - $GOOGL

Around The Block/This Week in the Markets:

• Jul 19 - Jobless Claims

Trading Block: A review of the week so far from a trading perspective

• Amazon.com down on its biggest day of the year.
• The trade war continues to scare no one.

Earnings!

• Monday - Netflix
• Tuesday - Goldman Sachs, Johnson & Johnson, United
• Wednesday - IBM, eBay, American Express
• Thursday - Microsoft
• Friday - GE, Honeywell
• NFLX - ATM Straddle: $35, approx. 9%

Odd Block: Bullish stupid in Cleveland-Cliffs Inc. (CLF). Risk reversal in Interpublic Group of Companies Inc. (IPG). Put roll in QEP Resources Inc. (QEP).

Mail Block: Listeners have their say

Options question of the week: Yup it's earnings season once again. Options traders are gearing up for a busy season. Which names do you think will dominate your options trading this season?

• NFLX
• AMZN
• TSLA
• GOOGL

Listener questions and comments:

• Question from FlyGuy - Hey what do you guys do with your long calendar spreads? Do you close out the short leg if the stock doesn't move then keep the long leg or just close the whole spread out?
• Question from Flyer - What are some of the best ways to trade put options?

Around the Block/This Week in the Markets:

• Jul 17 - Industrial Production
• Jul 18 - Housing Starts, Beige Book
• Jul 19 - Jobless Claims
• Federal Reserve Chairman Jerome Powell is set to deliver the semiannual monetary policy statement on Tuesday and Wednesday.

Trading Block: Earnings!

• Tuesday – PepsiCo
• Thursday - Delta Airlines
• Friday - JPMorganChase, Citi, Wells Fargo, PNC Bank

Plus, crude is taking it on the chin this week.

Odd Block: Call love in D.R. Horton Inc. (DHI), call vertical in PagSeguro Digital Ltd (PAGS), put/call palooza in Materials Select Sector SPDR (XLB).

Strategy Block: Uncle Mike Tosaw discusses premium buying vs selling.

Mail Block: Options question of the week

Options during earnings season can be challenging. Some live for it while others avoid it. Do you hold options positions through earnings announcements? If so, what is your approach? Or do you prefer to trade just before/after the event? Or is it all too risky?

• Yes, Short Premium
• Yes, Long Premium
• No, Too Risky
• I trade around the event

Around the Block/This Week in the Markets:

• Jul 13 - Import and Export Prices, Consumer Sentiment