The Option Block

Trading Block: A Retail Resurgence: Best Buy (BBY) - close $50.42, ATM straddle $4, approx. 8%. Earnings: Amazon, ULTA, Costco, GameStop.

Odd Block: Call spread buying in Southwestern Energy Corporation (SWN), calls buying in Macerish Co (MAC), puts and stock buying in Omega Healthcare Investors (OHI)

Strategy Block: Mike discusses what you can do to sell premium in this market environment.

Mail Block: Options Question Of The Week:

$VIX =11.20. $VIX June Future = 12.40 $VIX Weekly 11 puts = $.15, Weekly 13 Calls = $.15. What's your trade?

• Buy 13 Call for $.15
• Buy 11 Put for $.15
• Sell 13 Call for $.15
• Sell 11 Put for $.15

Listener Comment:

• Comment from Production One - VR would excite the young to trade options! Not old fat guys for sure! MarketWatch: Who trades options the most? Millennial investors Industry should be OK going forward.

Around the Block/This Week in the Market:

• A shortened week due to Memorial Day

Trading Block: Earnings highlights include Lowes (Wednesday), Best Buy, Costco, TD Ameritrade, GameStop (Thursday).

Odd Block: Calls trade in Pandora Media Inc. (P), calls trade in Energy Transfer Equity LP (ETE) and calls trade in MGM Resorts Int. (MGM).

Mail Block: Questions. Comments. More

Options Question Of The Week: $VIX =11.20. $VIX June Future = 12.40 $VIX Weekly 11 puts = $.15, Weekly 13 Calls = $.15. What's your trade?

• Buy 13 Call for $.15
• Buy 11 Put for $.15
• Sell 13 Call for $.15
• Sell 11 Put for $.15

Listener Questions:

• Question from Game Daydog - Whoo Hooo !! I made the boot camp show!!! He's right.. I did take a bruise, but my position was good. The stock gapped thru my position. Is there an option strategy that offers the most gap-thru protection?
• Question from Jlers -Best broker for Iron Condors?

Around the Block/This Week in the Market:

• May 23: New Home Sales
• May 24: Existing Home Sales, FOMC Minutes
• May 25: Jobless Claims, International Trade
• May 26: Durable Goods, GDP, Consumer Sentiment

Trading Block: Still in earnings season. Yesterday: Target, Cisco. Today: Alibaba, Walmart, Gap.

• GAP (GPS) - $23.13, ATM Straddle: $1.85, approx. 8%
• BABA - $120.72, ATM Straddle $6, approx. 5%
• Dow moves higher amid Trump fears following worst drop of year
• The Volatility Buyer Known as '50 Cent' Just Had a Huge Payday

Odd Block: Calls trade in Pandora Media Inc (P), calls trade in SBA Communications Corp (SBA) and calls trade in Kimberly Clark Corp (KMB)

Strategy Block: Mike discusses his adjustment in his silver collar.

Mail Block/Options question of the week:

There are still a lot of big names reporting in earnings season. Which ones are on your options watchlist this week?

• Walmart, $WMT
• Alibaba, $BABA
• Home Depot, $HD
• Cisco, $CSCO

Listener questions:

• Question from Andrew McNichol: Big fan of your Options Bootcamp podcast. I appreciate how you start at square 1 and then walk listeners through every element of options and options trading. Is there another podcast you recommend that does the same but for stocks? Most of the ones I have found are all about what is hot now, or stock picking tips. Essentially, I am looking for a stock trading 101 podcast. If you do not know of any such podcast, what is the best stock 101 book? Thanks!
• Question from Ejh4isu: If I buy/sell a vertical on SPX (or any equity stock for that matter) and hold until expiration, and SPX settles between the strikes, what happens? Example: sell 2395/2400 and SPX settles at 2397.

Around the Block/This Week in the Market:

• May 18: Jobless Claims

Trading Block: A bull rally in the market. A short breakdown of the OIC 2017 Conference in Scottsdale, AZ.

Earnings Highlights:

• Tuesday - Home Depot
• Wednesday - Target
• Thursday - Alibaba, Walmart, Gap

Odd Block: Calls trade in Fairmount Santrol Holdings (FMSA), calls trade in Ocwen Financial Corp (OCN) and calls trade in Home Depot Inc (HD).

Mail Block: Questions, comments, polls and more.

Options Question of the Week: Still a lot of big names reporting in earnings season. Which ones are on your options watchlist this week?

• Walmart, $WMT
• Alibaba, $BABA
• Home Depot, $HD
• Cisco, $CSCO

Listener question:

• Question from Abdallah Badwan - Hey I am new to options but I have been studying them for awhile and the only thing I don't understand is how do I know what stocks to choose if I want short term gains. In other words I want to be a short term investor and I want to know how to narrow down the stocks I want to invest in on a daily basis. How do I make a watchlist of stocks that I can invest in on a daily basis for short term gains.

Around the Block/ This Week in the Market:

• May 15: Treasury International, Housing Market Index
• May 16: Housing Starts, Industrial Production
• May 18: Jobless Claims

Trading Block: Yesterday's earnings: SNAP. Today's Earnings: Macys, Kohls, Nordstrom.

Strategy Block: Uncle Mike Tosaw discusses horizontal ratio spreads

Mail Block: Listener questions and comments

Options Question Of The Week: This volatility implosion is starting to make people nervous. $VIX #Limbo Time: How Low Can It Go in 2017?

• 9.0 is the bottom (38%)
• No lower than 8.5 (18%)
• Cannot get below 8.0 (15%)
• Question from Fund Concept: Doubt that Trump will get rid of H1Bs considering global talent is crucial for U.S economy. Any thoughts?

Around the Block/This Week in the Market:

• May 11: Jobless Claims, PPI
• May 12: Consumer Price Index, Retail Sales, Consumer Sentiment

Trading Block: VIX near the single digits at the 10 handle. Is the VIX too low? Earnings: Tesla, Facebook, Disney and EA.

Odd Block: Puts trade in iShares MSCI Germany Index (EWI), call buying in JD.com Inc (JD) and calls trade in iShares MSCI South Korean Index (EWG)

Mail Block/Weekend Flash Poll:

These are crazy times for all markets from commodities to equities and volatility. Which crazy level will we hit first?

• VIX Below 9
• SPX Above 2500
• WTI Below 40
• AAPL Above $160

Listener Question:

• Question from Paul - Mark, What is your take on the timing of an investment in silver right now? I just got out of the market and I am thinking of investing in silver - either the traditional options or an ETF that tracks physical bullion like SLV or SIVR. I am leaning towards SIVR for its lower expense ratio.
• Question Real Yute - Greetings, could you please explain how stock option is priced? My Internet provider will not allow me to access other page than Facebook. I only need to know how the pricing work. For example can $2 buy a contract?
• Comment from Charlie T. - Not really an options guy. I do not need the headache of yet another unknown element aka time. It's hard enough just picking my stocks, deciding price points, exit points, etc.

Around the Block: Disney, EA and SNAP

Trading Block: The Trumpcare bill and French election, how might they affect vol? Tesla: Close - $311, ATM Straddle - $17, approx. 5.5%. Stock off over $20 at the lowest point today, closing off nearly 5%. FB: Close - $151.80, ATM Straddle - $5.63, approx. 3.7% Facebook grew its revenue by 49% during the first three months of the year. Thank you to Steve A for the fan art!

Odd Block: Calls trade in Whiting Petroleum Corp (WLL), puts trade in Alerian MLP Index (AMJ) and puts trade in US Silica Holdings Inc (SLCA).

Strategy Block: Uncle Mike Tosaw discusses his most recent trades and moves from Monday.

Mail Block/Earnings Season Flash Poll:

$ZNGA reports earnings today. Stock is trading $2.87. #Options ADV 3K. Do you trade options on cheap stocks?

• Yes, down to $10
• Yes, down to $5
• Rarely
• No, the stock is an Option

Around the Block/This Week in the Market

• May 4: Jobless Claims, International Trade, Factory Orders
• May 5: Unemployment

Trading Block: Green on the screen for the NASDAQ. Looking ahead to AAPL earnings. CNBC's Mr. Wonderful is loving AAPL right now. OCC cleared contract volume down 6% year over year.

Odd Block: Review of MGM time stupid from last week, puts trade in NBR, calls trade in CBI, and put buyers in NBL.

Mail Block/Options Question of the Week:

#Earnings #PopQuiz - $AAPL $146.50, #Weekly strad. $5 (3.5%). IV30 = 21%, Weekly 155 Call= $.27, 138 Put = $.27 Would you rather?

• Buy Straddle/Iron Fly
• Sell Straddle/Iron Fly
• Buy Call
• Buy Put

Listener questions and comments:

• Question from Ron: I hear you mention the term stupid, "That's a put stupid," or "That's a call stupid." Is that strategy or an term of endearment? Thanks Ron
• Question from Let's make best: Which broker is the best for option trading?
• Question from Sharkcake: I've been approved to trade options by my Brokerage but I have yet to execute my first trade. What trade do you recommend?

Around the Block/This Week in the Market

• May 1: Personal Income
• May 1: Construction Spending
• May 3: FOMC Meeting
• May 4: Jobless Claims
• May 4: International Trade
• May 4: Factory Orders
• May 5: Unemployment

Earnings this week: Quarterly earnings continue to roll with one of the biggest names of the season set to announce Tuesday after the close. Technology giant Apple Inc. is set to release their latest numbers and the way they are perceived could push the stock to new highs like last release. In addition, there are other big names announcing as well including Tesla Motors and Pfizer.

Trading Block with very special guest co-host: Henry Schwartz, Trade Alert

Earnings today after the bell:

• Alphabet/GOOGL - $889, ATM Straddle - $29, approx. 3.2%
• Amazon - $921.50, ATM Straddle - $37.50, approx. 4%
• Intel - $37.25, ATM Straddle - $1.20, approx. 3.2%
• Starbucks - $61.75, ATM Straddle - $2.40, approx. 4%

Odd Block: Calls trade in Applied Optoelectronics Inc. (AAOI), calls trade in Nabors Industries Ltd (NBR), and calls trade in Yandex NV (YNDX)

Strategy Block: Uncle Mike Tosaw discusses the six factors of option pricing.

Around the Block/Question of the Week:

Earnings Season is upon us. Big names are reporting soon. Which is your pick for the largest % move post-earnings?

• $AMZN, 36%
• $GOOGL, 26%
• $CMG, 30%
• $MSFT, 8%

Earnings this week: 3M, ATT, Chipotle, JetBlue, Xerox, Boeing, PepsiCo, Nasdaq, Google, Amazon, Ford, Intel, Southwest, Starbucks, Exxon, General Motors.

Trading Block: Earnings today

• Alcoa: $33, ATM Straddle $2 - approx. 6%
• Chipotle: ATM Straddle $25.25, approx. 5.4%
• VIX 'fear' gauge plummets as French election results spark global relief rally.

Odd Block: Calls and puts trade in GGP Inc. (GGP), puts trade in Excelon Corp. (EXC) and calls trade in MGM Resorts Intl. (MGM).

Mail Block: QuestionoftheWeek:

Earnings Season is upon us. Big names are reporting soon. Which is your pick for the largest % move post-earnings?

• $AMZN
• $GOOGL
• $CMG
• $MSFT

Listner questions and comments:

• Follow-up comments from GameDay Dog:

You nailed it. I was assigned on 2 of the options. I knew that, but the (-) in my margin account was "alarming". My main thought was losing more than my spread safety net. The math did not make sense immediately. Glad to ask a ? that made others ask ?s..

My bad...just heard episode 608...Yeah, I got assigned 2 of 3 my put spread.. Way too early! I will get into better detail next time. Episode 208 had an excellent answer. That big negative number was stupid scary! I closed all the positions & sold the stock.. the 1 short put & 3 long puts made it a back ratio spread when I closed it.. it's funny now! PS - thanks for managing to get my questions on air.. once I closed the positions, I was able to sleep that night!!! Feels like I lost more than $300 though. By getting assigned the shares, it felt like I had more at risk and loss was influenced by the price of the underlying instead of the option. If that makes sense. Seeing the large margin number was not pleasant.. My credit spread had a 30% chance of being ITM when I sold it too! Hahaha..

• Question from Lesnod -How do you get out of the straddles? One side of a straddle is always a loss correct?

Around the Block/This Week in the Market

• Apr 25: New Home Sales, Consumer Confidence
• Apr 27: Jobless Claims, International Trade, Pending Home Sales
• Apr 28: GDP, Consumer Sentiment