The Option Block

Trading Block: One week later, how is everyone doing? SPY is back in rally mode. VIX back in the mid-20s. It's been a wild week for CBOE. Stock took a hit, threatened $100, now rallying up 4%. Earnings this week include APRN, before the bell tomorrow. ATM straddle $0.65, approx. 20%. Volatility's awakening spurs a record long position in VIX Futures

Odd Block: Review from 2/8: Someone unloading calls in (UNP), Pre earnings action in Under Armor (UAA).

Mail Block: Options question of the week

VIX is moving like crazy today. It's already blown past 23 and is threatening 35. So let's dial up our $VIX threshold for extra #ZombieApocalypse fun. You buying or selling these levels? Quite Simply: Where will $VIX close on Friday?

• 21% - Crazy Town: 30-35
• 22% - ZombieApocalypse: >35
• 19% - Crazy: 25-30
• 38% - Mildly Crazy:

Options question of the week, part two: It's been a rocky week for the markets. People are understandably scared and confused. That raises the question: Which product are you most concerned about over the next 30 days? Which product would you not touch with a 10-foot pole?

• VIX
• SVXY
• SPY
• Bitcoin: XBT, BTC, etc.

Listener questions and comments:

• Follow-up from Matt Williamson - Disclosure time: I'm in those FB $5.00 calls. But why??? I think Mike will see it first...No, you were actually close with your box theory. I just think Mike be the first to slap his forehead.
• Question from JohnnyBananas1 - If you buy a put option and the strike price is $5 and the drops to $3. Is it still worth $ even if it's 3$ under...even though my strike price is 5$?? So if the stock price is $7 drop to 5(strike). But end up going to 3 and my option is worth ~$4?...so I don't have to sell if I reach my strike price? Is the same with call options? That's what confuses me is the strike$. #learning
• Question from Chris T. - The most I can lose buying SVXY is the price I pay, correct? So can I buy it ~$10 and treat it like a lotto ticket call?

Around the Block: Earnings! Blue Apron, Under Armor. Can we get back into positive territory for the year in the S&P? Can get get three days of up? Or a couple of days of "not up so much"?

Trading Block: A review of the week to date.

• VIX back up over 30
• S&P is back in selloff mode despite decent earnings.
• We are all now living in a post VIX/Monday selloff world.
• Everyone is attacking the "Frankenproducts" like XIV and SVXY.
• VXX was briefly back above its post-split levels.
• Earnings are getting lost in the macro maelstrom - TSLA, CMG, TWTR, SNAP, ETC
• Earnings Highlights:
  • NVDA: ATM Straddle - $18, approx. 8%
  • ATVI: ATM Straddle - $5.50, approx. 8%
  • CBOE stock is getting crushed.

Odd Block: More Jan 2019 50 "catastrophe"puts in Tesla Motors (TSLA); Unloading Mar 30 calls in (UNP).

Strategy Block: Mike Tosaw discusses buying the dip

Mail Block: Options question of the week

VIX is moving like crazy today day. It's already blown past 23 and is threatening 35. So let's dial up our $VIX threshold for extra #ZombieApocalypse fun. You buying or selling these levels? Quite Simply: Where will $VIX close on Friday?

• Crazy Town: 30-35
• Zombie Apocalypse: >35
• Crazy: 25-30
• Mildly Crazy:

Listener questions and comments:

• Question from Matt Williamson - What's up with FB $5 calls (yes, FIVE DOLLAR calls) in Jan 2019? OI climbing past 12k…
• Question from Johnny Bananas - Quick question. If you buy a put option and the strike price is $5 and the drops to $3. Is it still worth money even if it's $3 under?

Around the Block/Earnings This Week:

• Thursday - Twitter, Nvidia, Activision/Blizzard
• Friday - CBOE

Trading Block: Dow loses over 1,000 points on the day. SPX opened at 2,683 on Jan 2. VIX cash now threatening 35! XBT below $7000; good thing for "uncorrelated assets."

Earnings Highlights this Week:

• Tuesday - GM, Snap Inc., Walt Disney Company
• Wednesday - Tesla, ICE
• Thursday - Twitter, Nvidia, Activision/Blizzard
• Friday - CBOE

Odd Block: From last Monday: Near-term call paper in (CL)

Mail Block: Question of the week

Holy Crap! $VIX is threatening 23! Is this the beginning of the #ZombieApocalypse or a great time to sell some #Volatility? In a nutshell - how do you think $VIX will finish the week?

• Elevated: 21-25
• Crazy Town: 25+
• Frothy: 17-21
• Bubbly:

Updated Question of the Week #2

$VIX is moving like crazy today day. It's already blown past 23 and is threatening 35. So let's dial up our $VIX threshold for extra #ZombieApocalypse fun. You buying or selling these levels? Quite Simply: Where will $VIX close on Friday?

• Crazy Town: 30-35
• ZombieApocalypse: >35
• Crazy: 25-30
• Mildly Crazy:

Listener Questions and Comments:

• Question from Matt Williamson - What's up with FB $5 calls (yes, FIVE DOLLAR calls) in Jan 2019? OI climbing past 12k…

Around the Block/Economic Reports this Week:

• Feb 5: ISM Non-Mfg Index
• Feb 6: International Trade, JOLTS
• Feb 8: Jobless Claims

Trading Block: Earnings! Wednesday's big names: FB, MSFT. Thursday's big names: AAPL, GOOGL, AMZN, BABA. OCC cleared contract volume increased 42% in January; highest January for cleared volume, highest month ever for index options.

Odd Block: TSLA options tracker. Review from Monday's near-term call paper in CL.

Strategy Block: Uncle Mike takes us to strategy school.

Mail Block: Options question of the week, plus listener questions and comments

EarningsSeason is upon us once again! It's time for #Tech to put its best foot forward. Which big #tech names are you looking to sling some #options on this week?

• Amazon - $AMZN
• Microsoft - $MSFT
• Alphabet - $GOOGL
• Facebook - $FB

Around the Block/Upcoming Economic Reports:

• Feb 1: Jobless Claims
• Feb 2: Unemployment
• Feb 2: Consumer Sentiment
• Feb 2: Factory Orders

Trading Block: VIX is back into the 13 handle.

Earnings this week:

• Wednesday - FB, Microsoft
• Thursday - Alphabet, Amazon, Apple, Alibaba
• The ORATS earnings report for 1/29/2018

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors (TSLA). Size call diagonal in Anheuser Busch Inbev NV (BUD). Near-term call paper in Colgate-Palmolive Company (CL).

Mail Block: Options question of the week

Earnings Season is upon us once again! It's time for #Tech to put its best foot forward. Which big #tech names are you looking to sling some #options on this week?

• Amazon ($AMZN)
• Microsoft ($MSFT)
• Alphabet ($GOOGL)
• Facebook ($FB)

Listener questions and comments:

• Question from Michael Smith - Any recommendations on where I can find help on calculating implied move into earnings?

Around the Block/Economic Reports this Week:

• Jan 30: Consumer Confidence
• Jan 31: Chicago PMI, FOMC Meeting
• Feb 1: Jobless Claims
• Feb 2: Unemployment, Consumer Sentiment, Factory Orders

Trading Block: Earnings!

• Monday: Netflix
• Tuesday: Johnson & Johnson, Procter & Gamble, Travelers, Verizon
• Wednesday: GE, United Technologies
• Thursday: Caterpillar, 3M, Intel (Caterpillar doing crazy volume today - over 130k contracts on the tape.) Netflix, Intel and Starbucks.

Odd Block: Size near-term put sales in (NWL). Crazy move sparks crazy volume in (MNKD). Size short call roll in (SAN).

Strategy Block: Mike Tosaw discusses his most recent SPY trades

Mail Block: Options questions of the week

Since we're down at #InsideETFs this week we thought we'd make our #Options #QOTW about #ETFOPTIONS. Quite simply - what is your favorite ETF/ETP #option to trade?

• $SPY
• $GLD
• $VXX
• Other (reply w/answer)

Bitcoin #Futures are currently trading around $11,500. If #Options existed, how would you trade them? Assuming one-month to expiration would you...?

• 27% - Buy 5% OTM Call
• 32% - Buy 5% OTM Put
• 16% - Sell 5% OTM Covered Call
• 25% - Just Short The Future

Around the Block: Economic Reports This Week

• Jan 26: GDP, Durable Goods

Trading Block: The Dow sets all-time intraday record as Senate votes to end government shutdown

Earnings This Week:

• Monday: Netflix
• Tuesday: Johnson & Johnson, Procter & Gamble, Travelers, Verizon
• Wednesday: GE, United Technologies
• Thursday: Caterpillar, 3M, Intel

Odd Block: Calls and puts trade in Patterson UTI Energy (PTEN). Puts trade in Harley Davidson Inc (HOG). Puts roll in HCA Healthcare Inc (HCA).

Strategy Block: Mike Tosaw discusses buying OTM calls in this current market

Mail Block: Options question of the week

Bitcoin futures are currently trading around $11,500. If #Options existed, how would you trade them? Assuming one-month to expiration would you...?

• 27% - Buy 5% OTM Call
• 32% - Buy 5% OTM Put
• 16% - Sell 5% OTM Covered Call
• 25% - Just Short the Future

Listener questions and comments:

• Question from CharlieC - What's the weirdest thing you've seen in the options market?
• Question from Markit - What's the truth about all the talk about VIX being moved using SPX puts? Is this a thing? Can you please discuss on the network?

Around the Block/Economic Reports This Week:

• Jan 24: Existing Home Sales
• Jan 25: Jobless Claims, International Trade, New Home Sales
• Jan 26: GDP, Durable Goods

Trading Block: VIX at 12.40! In the double digits for the first time in a long while. Earnings season ahead. IBM - $168.70, ATM straddle - $7.20, approx. 4%. A rough start to the year for Bitcoin. Tuesday selloff hits crypto hard.

Odd Block: Yet more Jan 2019 50 "catastrophe" puts in Tesla Motors (TSLA). Massive call party in Guggenheim CurrencyShares Euro Trust (FXE). Size bullish strangle in Kinder Morgan Inc. (KMI). Size put roll in MBIA Inc. (MBI).

Strategy Block: Uncle Mike Tosaw discusses exercising caution in this current market.

Mail Block: Options question of the week.

Which name are you looking forward to trading options on during the upcoming earnings season? Your fav not here? Choose "Other" and send it in. Best will be shared on #OptionBlock

• Apple ($AAPL)
• Tesla ($TSLA)
• Amazon ($AMZN)
• Other

Another options question of the week: Bitcoin futures are currently trading around $11,500. If options existed, how would you trade them? Assuming one-month to expiration would you...?

• Buy 5% OTM Call
• Buy 5% OTM Put
• Sell 5% OTM Covered Call
• Just Short the Future

Listener Questions and Comments:

• Question from PJamesLamar - Can you guys recommend an options platform for active option trader? I'll try to add a link to what I used to be able to do on my old platform but am no longer able to do. But I would like to find another platform that has single click entry and exit for options. If you know one please let me know. Thanks.

Around the Block: IBM off a little over 4%. Earnings. Shutdowns.

Trading Block: Crude is hitting new near-term highs. Brent breaks above 70 for the first time since 2014. Kodak is now a crypto company!?

Odd Block: Massive call party in (FXE); Options-palooza in (XOP); Call frenzy in (XLE).

Strategy Block: Uncle Mike Tosaw discusses risk reversals.

Mail Block: Options question of the week

Another "easy" one to help kick off the New Year. Which name are you looking forward to trading options on during the upcoming earnings season? Your fav not here? Choose "Other" and send it in. Best will be shared on #OptionBlock.

• Apple (AAPL)
• Tesla (TSLA)
• Amazon (AMZN)
• Other

Options Flash Poll: The options industry insists that things have never been better for retail traders. Do you agree?

• Yes
• No

Options Flash Poll, Part Deux: Overhead at @stachicago: We need a #speedbump in #Options to create a "level playing field" for all participants. Agree?

• Yes
• No
• What is a #speedbump?

Around the Block: Earnings! JPMorgan Chase (JPM) and Wells Fargo (WFC) release results before market open on Friday, January 12.

Trading Block: Nvidia stocks rises on new of chips being used in handle processing of driverless cars. Intel was aware of the chip vulnerability when its CEO sold off $24 million in company stock & options.

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors (TSLA). Massive call party in Guggenheim CurrencyShares Euro Trust (FXE). Buying more time in Johnson Controls International PLC (JCI)

Mail Block: Options question of the week

2017 was the "Year that Volatility Died." So our 1st #QOTW for 2018 is a puzzler: Where do you think $VIX will close at the end of the year?

• 16% - Between 7.5-9.99
• 35% - Between 10- 12.49
• 13% - Between 12.50 -14.99
• 36% - Above 15

Listener questions and comments:

• Question from Ensco8651: Question for the Option Block crew. As learned from this program, cash secured puts are a great way to enter a position on a stock I want to own. Just recently, I sold 2 puts with a strike price of $24. At expiration, the stock was at $23.95 so I anticipated getting 200 shares assigned to me but only received 100. Upon contacting my broker, he explained that the holder of the other 100 shares had a "do not assign" flag on them. Please clarify. I don't believe I have to "option" to not accept the shares if they fall below the strike price. Why should he have the "option" to not assign the stock to me? Thanks guys, GREAT show.

Around the Block: Earnings are on the horizon. Will the SPX hit 2800 by the end of the week? Ally Invest clients are talking about options as protection. Momentum is ridiculous going into earnings.