The Option Block

Trading Block: Earnings:

• AMZN - 1460, ATM straddle 90, approx. 6%
• MSFT - 92, ATM straddle 4, approx. 4%
• INTC - 51.38, ATM straddle 2.40, approx. 5%
• GOOGL - ATM straddle 54, approx. 5%

Odd Block: More Jan 2019 50 "catastrophe" puts in Tesla Motors (TSLA). Apr 12.5 Puts in CNH Industrial NV (CNHI). Line in the sand puts in L Brands Inc. (LB). Line in the sand puts in Dicks Sporting Goods Inc. (DKS).

Mail Block: Options question of the week

We dig up many strange options positions at the Options Insider. Some seem credible while others are just head scratching. Which of the following open options positions do you think has the best chance of actually becoming a winner?

• 49K TSLA Jan 2019 50 P
• 197K VXX Jan 2019 10 P
• 65K GLD Jan 2019 200 C
• 146K SPY Dec 2019 150P

Listener questions and comments:

• Question from BTavares -Hey great show. I'm looking at this chart from FT and it makes me wonder if I should concentrate my trading in the last 30 minutes of the day to increase the liquidity for my options trades. I wonder if this also applies to less-liquid options names.
• Question from Yancy - I heard Tom Sosnoff say on your interview show that there are 20 active names and 75 tradeable names in the options market for retail and that's about it. Do you concur?

Around the Block: What's on the radar for the all-stars?

Trading Block: VIX down. Vol futures down. Gold vol is very low. 10-year yield at 3%. Metals get the crap kicked out of them.

Earnings: GOOGL - ATM straddle: 54, approx. 5%. More tech earnings to come.

Odd Block: More Jan 2019 50 "catastrophe" puts in Tesla Motors (TSLA). Puts trade in Chicago Bridge & Iron Company (CBI). Calls trade in D. R. Horton Inc. (DHI). Puts trade in CBL & Associates Properties, Inc. (CBL).

Strategy Block: Uncle Mike Tosaw discusses hedging during earnings.

Mail Block: Options question of the week

VIX is back in the mid-teens. Are you buying this Volatility reprieve or is this merely calm before the storm? Quite simply - Where do you think VIX will end the week?

• 24% - Here: 16-18
• 19% - Higher: 18-20
• 18% - Even Higher: 20-25
• 39% - Lower: 14-16

Options Flash Poll: The proposed third exchange from @MIAXexchange will raise the total number of U.S. Options Exchanges to 16. Is this a good thing for the options market? Is it the straw that finally breaks the camel's back? Or are you too busy getting great fills to care?

• 44% - More Exchanges the Better
• 22% - Please Make It Stop
• 34% - Don't Care: I get filled

Listener feedback:

• Question from LNC - SVXY calls suck now. What about selling the puts? Is there any juice in those or have they been drained as well by the bid redo last week?

Around the Block: GOOGL post-earnings. Andrew wants to let it all out. SVXY makes him angry. Will tech earnings produce a higher SPX?

Trading Block: That's right. We are up to 16 exchanges now. MIAX Options and MIAX PEARL options exchanges, today announced that it intends to launch MIAX Emerald as its third fully electronic options exchange in 2019.

Options Flash Poll: The proposed third exchange from MIAX exchange will raise the total number of U.S. Options Exchanges to 16. Is this a good thing for the options market? Is it the straw that finally breaks the camel's back? Or are you too busy getting great fills to care?

• More Exchanges the Better
• Please Make It Stop
• Don't Care: I get filled

Earnings:

• E-Trade - 58.50, ATM straddle ~ 2, approx. 3.5%
• Netflix (from Monday) - 307, ATM straddle ~ 28, approx. 9%

Odd Block: Well-times paper in VIX (VIX). Put love in Market Vectors Semiconductor ETF (SMH). Deep ITM calls in NXP Semiconductors NV (NXPI). Call spread in Alcoa Corp (AA).

Mail Block: Last week's options question of the week.

SPOT is the latest hot IPO to join the Options market. So many recent Options listings started off hot then suddenly cooled so we have to ask - which hot recent IPO will you be slinging Options on in 2019?

• 38% - SPOT
• 16% - DBX
• 41% - SNAP
• 5% - Other

This week's options question of the week:

VIX is back in the mid-teens. Are you buying this Volatility reprieve or is this merely calm before the storm? Quite simply - Where do you think VIX will end the week?

• Here: 16-18
• Higher: 18-20
• Even Higher: 20-25
• Lower: 14-16

Listener questions and comments:

• Comment from J3dingle -Mark, do you realize this is what almost won your Broker Madness tournament?
• Question from Dhasone Riley -I have a general question because I'm struggling with hedges. Do most people buying calls or put options as hedges, hedge in, at or out the money?

Around the Block: ETrade rallied a bit after earnings, but still a meh. The more exchanges the better? Silver is moving again. Will the maket move back above 2700? Sebas is more bullish than Tosaw.

Trading Block: What is happening that might move the markets?

• Calm coming soon? A silent Trump Twitter account helps.
• A calmer backdrop for equities would bring pain to speculators, or more kindly, reduce the value of their hedges.
• Earnings Season Is Set to Crush Volatility Once Again

Earnings:

• Monday - Netflix (after the bell) $307, ATM straddle $28, approx. 9%
• Tuesday - IBM, Johnson & Johnson, United
• Wednesday - American Express, Alcoa, Abbott
• Thursday – E*Trade
• Friday - GE, P&G, Honeywell, Waste Management

Odd Block: More Jan 2019 50 "catastrophe" puts in Tesla Motors (TSLA). Closing roll to puts in Yandex NV (YNDX). Call love in Devon Energy Corp (DVN). Short puts in PagSeguro Digital Ltd (PAGS).

Strategy Block: Uncle Mike Tosaw discusses synthetic trades.

Around the Block/Economic Reports:

• Apr 16 - Retail Sales, Business Inventories, Treasury International
• Apr 17 - Housing Starts, Industrial Production
• Apr 18 - Beige Book
• Apr 19 - Jobless Claims

Trading Block: A look back at what moved the market this week

• Volatility ETFs nearly double.
• Top Performing ETFs of the Year
• Bitcoin's Price Jumps $1,000 In 30 Minutes Of Market Growth Across The Board
• Why Bitcoin Behaves Like the Flu

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors (TSLA), sweep puts in CNH Industrial NV (CNHI), line in the sand puts in L Brands Inc (LB), call butterfly in Facebook (FB)

Strategy Block: ;Uncle Mike Tosaw discusses when to close shorts

Mail Block: Options question of the week

SPOT is the latest hot #IPO to join the #Options market. So many recent #Options listings started off hot then suddenly cooled. So we have to ask - which hot recent #IPO will you still be slinging #Options on in 2019?

• SPOT
• DBX
• SNAP
• Other (Reply/DM w/choice)

Listener questions and comments:

• Question from Ladmos - Feeling the pain on this TSLA rundown. Probably should have rolled my puts last week rather than waiting for this week when they are now ITM. If stock hits $295 then I'm definitely pulling the trigger. How do you guys determine when to roll? Is it stock based or option price/volatility based? Question from Bob Thompson: I would like to know the best options strategy to use with a small account?
• Around the Block/Economic Reports:
• Apr 13: Consumer Sentiment, JOLTS

Trading Block WWE stock selling off post Wrestlemania - still very lofty. Big contracts today - April 34 puts and April 40 calls. Spotify options starting on April 9. Big launch day for Dropbox with nearly 10k contracts.

Odd Block: Some of the stranger paper we saw trade today

• More Jan 2019 50 "Catastrophe" puts in Tesla Motors (TSLA)
• Weekly call palooza in GameStop Corp. (GME)
• Someone spooked in VanEck Vectors Russia ETF (RSX)
• Rolling down calls in Yandex NV (YNDX)

Mail Block: Options question of the week

SPOT is the latest hot #IPO to join the #Options market. So many recent #Options listings started off hot then suddenly cooled. So we have to ask - which hot recent #IPO will you still be slinging #Options on in 2019?

• SPOT
• DBX
• SNAP
• Other (Reply/DM w/choice)

Listener questions and comments:

• Question from Mark Davis - Hello, I have written in previously and got some great feedback on my question, so hoping you can help me out again.I am still playing (paper trading) with options while in my real account I purchase shares outright. After having quite a few good years, with the increase in volatility lately I have taken some pretty rough hits, so far for the YTD I lost about 16% of my portfolio. I should also mention I currently only deal with Index funds (S&P, International, & Small cap). I go in and out of these stocks based on various parameters that may have me holding a certain stock for less than a month to a little more than a month. Is your stock replacement strategy a good use for this or maybe not since time horizon is generally not long. Example. Tomorrow I may buy 100 Shares of SPY @ 25 each, likely selling the shares in about 20 days. I am trying to figure a way to get the same (or close to same) movement as if I owned the shares outright while limiting the downside of at least setting a li e in the sand. I am having trouble wrapping my head around the right strategy or if what I want to do is even possible. So in the example above my portfolio had I bought outright and the stock is at 30 in 20 days I'm at $500 but what do I do to get close to this using Options. On the flip side if SPY was at 20, I am thinking there is a way that I would can protect myself from losing some of that $500. Another thing I'm not sure of when doing this should I only be buying enough Contracts that I could afford it were I to exercise the options, i.e. if I have $200 in my account and the underlying is $1/share would I only want to buy 2 calls even though I would ideally have enough money to buy more contracts? Thanks for your feedback

Around the Block/Economic Reports:

• Apr 10 - PPI
• Apr 11 - CPI, FOMC Minutes, Treasury Budget
• Apr 12 - Jobless Claims
• Apr 13 - Consumer Sentiment, JOLTS

Trading Block: TSLA - up $50 in a few days. FB up over $7 since yesterday. SPOT options start on April 9. Dropbox has a big launch day with nearly 10k contracts. OCC cleared contract volume up 15% in March.

Odd Block: More Jan 2019 50"Catastrophe" puts in Tesla Motors (TSLA), weekly call-palooza in GameStop Corp. (GME), crazy call spread in Energy Transfer Partners LP (ETP), and call love in Array Biopharma Inc. (ARRY).

Strategy Block: Uncle Mike Tosaw discusses selling a spread vs buying a spread.

Mail Block: Options Broker Madness

• The battle is over - there can only be one. Congratulations to the 2018 #Options #BrokerMadness champions @TheTastyWorks! Thanks to all who participated.

Listener questions and comments:

• Question from Jilian - The whole inverse volatility thing has me spooked about other inverse ETFs like SQQQ (3X short nasdaq 100), UVXY and SDS (2X short S&P 500). Should I be worried that these can be wiped out next?

Around the Block/Economic Reports:

• Apr 4: Jobless Claims, International Trade
• Apr 5: Unemployment

Trading Block: OCC Cleared contract volume up 15% in March. Highest first quarter volume and highest first quarter for equity options on record. Cleared futures average daily volume for quarter up six percent from Q1 2017.

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors (TSLA); put-palooza in SPDR S&P Biotech (XBI), call-palooza in GameStop Corp. (GME), and rolling puts in The Hartford Financial Services Group (HIG).

Mail Block: It's the finals!

• TastyWorks vs Lightspeed!
• Comment from MarkClydeBrant1 -Got free options from Robin Hood and very impressed! Super-fast but only cash secured trades for now. Ideal for newbies because everything is explained simply at every step. Pros will love the speed! App trading is the best! Remember SS futures? Ha-ha
• Comment from KToddMorgan - WNSSS, while a cool new name, haven't fared much better lately. I'm betting that changes, but as of yet, they're getting whacked too.

Around the Block: What are we looking at for the rest of the week?

TRADING BLOCK

• Is the trade war over? Market back in rally mode.
• VIX off a few handles.
• Have the FANGs been de-fanged?
• Opinion: If the FAANGs have got you down, it's time to win with the WNSSS stocks
• https://www.marketwatch.com/story/if-the-faangs-have-got-you-down-its-time-to-win-with-the-wnsss-stocks-2018-03-29
• Tesla hit $250 yesterday - off over $100 in a few weeks.
• Facebook annihilation continues - hit $150.80 yesterday.

ODD BLOCK

• More Jan 2019 50 "catastrophe" puts in Tesla Motors (TSLA)
• Call love in Kellogg Company (K)
• Mid-market love in Eldorado Resorts Inc. (ERI)

STRATEGY BLOCK

The Rock Lobster discusses the "VIX Zone" concept

AROUND THE BLOCK

It's Final Four time!

• Battle 1: Tasty vs. Ally Invest (TradeKing)
• Battle 2: Tradestation vs. Lightspeed

Trading Block: The market is back in rally mode, is the trade war over? VIX off a few handles. Tesla breaks the magical $300 level. The Facebook selloff continues.

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors (TSLA), funky stupid in MGM Resorts International (MGM), buying Jan upside in Newmont Mining Corp (NEM), and size call sweep in Finish Line Inc. (FINL)

Mail Block: It's Madness

• We have 2 more match ups to see who makes it to the #FinalFour of #BrokerMadness. Next up, @TradeStation vs. @IBKR.
• Second match up for #options #brokermadness #FinalFour placement sees @AllyInvest taking on @RobinhoodApp. @AllyInvest (as TradeKing) won the whole tournament two years ago. Will @RobinhoodApp crush that dream?

Around the Block: Will the uptick continue? What about Facebook?