The Option Block

We are not letting the Thanksgiving holiday get in the way of you getting your Option Block fix on.

Mail Block: It's all listener questions and comments today

Options question of the week: The war for Bitcoin Derivatives is heating up w/ both CME Group and CBOE jumping into the fray. How do you think you'll be trading Bitcoin in 2018?

• CME BRR Futures
• CBOE Gemini Futures
• Stick w/ Regular Bitcoin
• Still don't trust Crypto

Questions and Comments:

• Question from Nikbak - When do you think we'll have #bitcoin options?
• Question from Scott Somer - Another question I would like to see is - Do you think that Nasdaq PHLX will have the most volume on a given trading day over CBOE as the leading medallion.
• Question from MarkLitwin: Thank you for your time and explanation! Appreciate! I was thinking of using options leverage with a limited risk of losing premium by buying an option long enough to cover a span between earnings and the one which is already In the Money with the Delta of 1 and selling that option just before the next ER. Would you comment on that idea please!
• Question from Albert Deckel - Two questions: While I understand how to convert a "Delta" into meaning, I really don't understand what consists of a "high" vs. "low" Gamma, Theta or Vega. For example, when is theta so high that it makes the purchase of a contract dubious, or Vega so high that it makes the purchase of an OTM contract desirable? Also, if I were to write an ITM put, what combination of Delta, Gamma, Theta or Vega am I looking for? Thanks so much!! Al
• Question from USA Patriot - What is ADV??
• Comment from Charlie T. - Not really an options guy. I don't need the headache of yet another unknown element aka time. It's hard enough just picking my stocks, deciding price points, exit points, etc.
• Question from L Penguin - I'm a new options trader and I want to buy a LEAP call because it looks like the stock is going to go to up in the next 12 months, but I don't want to commit yet. I also want to generate income while I hold that position. What are your thoughts on selling the call while I have the leap? Also, this stock has an attractive dividend that I'd like to capture. Is this even possible? Interested in your thoughts, thanks! I was thinking about buying a deep in the money call for the LEAP, and then depending on where the stock is trading at the time, sell closer to the money.

Trading Block: Featuring special guest Dan Cook from NADEX.

What are the uses for binary options? Binaries as a way to trade options. VIX coming back to life. House passes tax reform, will congress unify behind a single plan? Uncle Mike speculates on winter weather and resulting oil demand. There is still earnings on the horizon, including: AMAT, GAP and WMT after the bell today.

Odd Block: More TSLA 50 "Catastrophe" puts. Put-palooza in Time Warner Inc. (TWX). Funky far OTM outs in Restoration Hardward (RH). Call vertical/roll in Dicks Sporting Goods Inc.DKS.

Strategy Block: Dan Cook discusses binary options.

Mail Block: Options question of the week

The war for #Bitcoin #Derivatives is heating up w/ both @cmegroup and @cboe jumping into the fray. How do you think you'll be trading #Bitcoin in 2018?

• CME BRR Futures
• CBOE Gemini Futures
• Stick w/ Regular #Bitcoin
• Still don't trust #Crypto

Listners weigh in:

• Question from JLC8 - What is shortest term option available? Is it equity or commodity?

Around the Block: After-the-close earnings update. Will option vol come down? Are people going to take the money and run?

Trading Block: Earnings! Are we heading for more carnage? Putin says he didn't do anything to the election. GE gets smoked. Amazon up over 1% thanks to Lord of the Rings.

Odd Block: Catastrophe puts in Tesla Motors Inc. (TSLA). Size put roll in (SEAS). Put-palooza in Square.

Mail Block: Options question of the week

The war for Bitcoin derivatives is heating up w/ both CMEGroup and CBOE jumping into the fray. How do you think you'll be trading #Bitcoin in 2018?

• CME BRR Futures
• CBOE Gemini Futures
• Stick w/ Regular #Bitcoin
• Still don't trust #Crypto

Listnener Questions: What's on your mind?

• Question from Nikster1001 - I am new to options trading and have been following you for three weeks now...thanks for all your insights...I am still holding NVDA calls for end of this week...any update on NVDA?

Around the Block: Earnings! WMT, DKS, BBY, and more.Uncle Mike is looking at oil and financials. Sebas is wondering what will happen on Tuesday.

Trading Block: The Return of the Viceroy! OCC cleared contract volume up 20% in October.

Earnings!

• Disney - ATM straddle $5, approx. 4.5%
• NVDA - ATM straddle $16, approx. 8%

Odd Block: Put roll in Time Warner Inc. (TWX). Size call love ENSCO PLC (ESV).

Strategy Block: Uncle Mike Tosaw discusses the pulse of the market.

Mail Block: Options question of the week

Trading #Options during #Earnings is a coin flip. But you know you love to do it. What's your #Earnings #Options MO?

• 28% - Buy Calls/Call Spreads
• 5% - Buy Puts/Put Spreads
• 33% - Sell Puts/Put Spreads
• 34% - Fly/Iron Fly/ Iron Cond.

Around the Block: Earnings check-in from DIS and NVDA. Uncle Mike is looking for 2600 in S&P. How many tax brackets? Taxes. Taxes. Taxes. High-yield bond charts look ugly.

Trading Block: Earnings!

• Monday - Weight Watchers
• Tuesday - CBOE, Valeant, Snap Inc.
• Thursday - Nvidia, Macys, Kohl's
• Friday - JCPenney

Odd Block: Size call love in MRO. Opening calendar/stupid in RSX. Call 1x3 in RCX.

Mail Block: So many questions!

Options question of the week: Bitcoin just blew past $100B in "market cap." If #Options were available how would you trade them?

• 52% - Buy Calls/Call Spreads
• 18% - Buy Puts/Put Spreads
• 13% - Sell Covered Calls
• 17% - Other/Hate #Crypto

Listener questions and comments:

• Comment from Tony Varriale‏ - HODL
• Comment from Contrlkaos - Call broken wing butterflies

ANOTHER Options question of the week:

Earnings is a coin flip. But you know you love to do it. What's your #Earnings #Options MO?

• Buy Calls/Call Spreads
• Buy Puts/Put Spreads
• Sell Puts/Put Spreads
• Fly/Iron Fly/ Iron Cond.

More comments!

• Comment from Ophir Gottlieb‏ - $TSLA oh, if there was after hours option trading @Options
• Comment from Folfox - Do you prefer iron condor vs. iron butterfly? (I know 1 strategy wont work every time, but what scenario is preferred)
• Question from ThinkTankTrading - I have a question regarding funds like vxx and this quote from its prospectus...In connection with these limits, the Dodd-Frank Act has required the CFTC to adopt regulations establishing speculative position limits applicable to regulated futures and OTC derivatives and impose aggregate speculative position limits across regulated U.S. futures, OTC positions and certain futures contracts traded on non-U.S. exchanges. In December 2016, the CFTC re-proposed rules on position limits with respect to the 25 physical delivery commodity futures and options contracts, as well...What happens with cheap low Vol prices and this position limit, and they can't get the Vol exposure needed to track the benchmark? ...Positive or inverse ETFs?...One will have massive margin lending/ borrowing costs and the other won't be allowed to buy more futures at some point...The second that happens the Nav will be out of wack and become a closed end fund with Arb to Nav opportunities aka the death spiral - would you agree? Or am I missing something - thanks in advance...Asking for a friend hahahah kidding.

Around the Block: RCM webinar on Wednesday, November 8th, 12:00 CST - How to Webinar: Trading Options on Stocks & Futures

Economic Reports this Week:

• Nov 7 - JOLTS
• Nov 8 - EIA Petroleum Status Report
• Nov 9 - Jobless Claims
• Nov 10 - Consumer Sentiment, Treasury Budget

Trading Block: Earnings season review:

• Apple after the bell. ATM straddle - $7.25, approx. 4.3%
• Facebook and Tesla

Odd Block: Options tracker in Tesla Inc. (TSLA), call-palooza ahead of earnings in Pandora Media Inc (P), and size upside buywrite in Marathon Oil Corporation (MRO).

Strategy Block: Uncle Mike Tosaw discusses tax savings.

Mail Block: Options question of the week

Bitcoin just blew past $100B in "market cap." If #Options were available how would you trade them?

• 52% - Buy Calls/Call Spreads
• 20% - Buy Puts/Put Spreads
• 19% - Sell Covered Calls
• 9% - Other/Hate #Crypto

Around the Block: RCM webinar on Wednesday, November 8th, 12:00 CST - How to Webinar: Trading Options on Stocks & Futures.

Trading Block: Earnings Season Review. This season's theme "Buy Premium"! Under Armor before the bell tomorrow. Review of: Chipotle, Twitter, Amazon, Google & Microsoft.

Odd Block: Size OTM call paper in Plains GP Holdings LP (PAGP). Pre-earnings put-palooza in Under Armor Inc. (UAA). Rolling puts in ENSCO PLC (ESV).

Mail Block: Options question of the week.

Bitcoin just blew past $100B in "market cap." If #Options were available how would you trade them.

• Buy Calls/Call Spreads
• Buy Puts/Put Spreads
• Sell Covered Calls
• Other/Hate #Crypto

Around the Block: RCM webinar on Wednesday, November 8th, 12:00 CST - How to Webinar: Trading Options on Stocks & Futures.

Trading Block: Earnings!

• Chipotle (CMG) - ATM straddle: $20, approx. 6.25%
• Twitter (TWTR) - ATM straddle: $1.50, nearly 9%
• Amazon (AMZN) - ATM straddle: $39, approx. 4%
• Google (GOOGL) - ATM straddle: $41, approx. 4%
• Microsoft (MSFT) - ATM straddle: $1.75, approx. 2.2%

Odd Block: Review from 8/7: Call frenzy in Procter & Gamble (PG)

Strategy Block: Uncle Mike Tosaw discusses SPY and risk reversals.

Mail Block: Listener questions and comments

• Question from Hawkeye - To ye merry band of Magical Voice, grease laden Meatballs, favorite Uncles, and Lobsters with Tubs of butter: I already get that SVXY, XIV, and other short ETF/ETNs can go bust overnight due to the front 2 futures doubling. What would happen if I held long SVXY puts in an IRA and the fund had to close because the SHTF? How would I exercise them if the fund doesn't trade? I can't cover due to underlying frozen, but I can't exercise without covering because that would put me short in an IRA? Or would they still allow it as an exception? How would it all unwind? Thanks for all you guys keeping me learning, laughing, and most of all, thinking.

Around the Block: Reviewing what's happening post-earnings. Earnings. Earnings. Earnings. Is North Korea testing hydrogen bombs? After-hours options trading would have been fun this week.

Trading Block: Earnings!

• Tuesday - McDonalds, GM, Chipotle, AT&T. Chipotle Mexican Grill (CMG), ATM straddle - $20, approx. 6.25%
• Wednesday - VISA
• Thursday - Twitter, Amazon, Google, Microsoft
• Friday - ExxonMobil, Merck

Odd Block: Calls trade in Fortuna Silver Mines Inc. (FSM). Combo/straddle trade in iShares MSCI Japan ETF (EWJ). Size buy/write in West Fraser Timber Co. Ltd.(WFT)

Mail Block: Options question of the week

It looks like you all REALLY want after-hours #Options trading. The question now - what is the best way to make it happen?

• Pilot For Earnings Season
• Top Names Only -$AMZN,etc.
• Basic Limit Order Book
• Other

Listener Questions and Comments: What's on your mind?

• Question from John Hopkins - Hi I was inquiring if Al Sherbin's spreadsheets from his book, how to price and trade options is still available, it is not on the Wiley website anymore. And I can not get it from my O'Reilly subscription service either. I have developed my own kelly spreadsheet, but I would like an experts to see if I am right, mine works ok, it has increased my winning trades greatly. Thanks I realize this is not part of your usual discussion, many apologies.

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