The Option Block

Trading Block: Earnings Today

• Before the bell - Hasbro
• After the bell - CBOE Holdings, Twenty-First Century Fox

But there is more than just earnings. OCC announces Total Cleared Contract Volume was down 9% in January. The Snapchat IPO looms ahead.

Odd Block: Calls trade in S&P 500 VIX Short Term (VXX), puts trade in T-Mobile Inc (TMUS), alls trade in TrueCar Inc (TRUE).

Mail Block: Options #QuestionOfTheWeek

Time for another Earnings #StraddleBattle : Which stock will outperform its straddle by the largest margin?

• 35% - Apple (AAPL) (ACTUAL WINNER)
• 13% - Facebook (FB)
• 39% - Amazon (AMZN)
• 13% - Chipotle (CMG)

Options #QuestionOfTheWeek - With so many different #Options expiration cycles available (weekly, etc) - which duration do you prefer?

• Longer than 1 month
• Monthly
• Weekly
• Daily/Intra-day

Listener question:

• Question from In-to-it - Why can I not trade options on the Super Bowl?

Around the Block: Earnings!

• Tuesday: General Motors, Walt Disney Company, Take Two Interactive
• Wednesday: GrubHub, Time Warner
• Thursday: Twitter, Coca-Cola, Dunkin Brands Group, Activision, Nvidia, Zinga

This Week in the Market:

• Feb 7: International Trade
• Feb 9: Jobless Claims
• Feb 10: Import and Export Prices, Consumer Sentiment
• Feb 10: Treasury Budget

Trading Block: Earnings edition

• AAPL: Closed: $121.35, ATM Straddle: $4.25 approx. 3.5%. Opened: $127.09 - up 4.7%, traded as high as $130.49 - up 7.5%. iPhone 7 sales blew away estimates. Apple still sitting on over a quarter of a trillion in cash - excluding debt.
• FB: Closed: $133.23, ATM Straddle: $6.70 approx. 5%. traded as high as $135.29 - up 1.5%, today down to $130.70, approx. 2%

After the bell: Amazon, Chipotle, Visa, GoPro

• AMZN: $839.75, ATM Straddle: $41.50 - approx. 5%
• CMG: $424.1, ATM Straddle: $20.55 - approx. 5%
• GOPRO: $10.88, ATM Straddle: $1.25 - approx. 11.5%

Odd Block: Calls trade in Alcoa Inc (AA), calls trade in MetLife Inc (MET) and calls trade in Nordstrom, Inc (JWN).

Strategy Block: Uncle Mike Tosaw discusses hedging Apple going into earnings

Mail Block: Options #QuestionOfTheWeek

Time for another Earnings #StraddleBattle : Which stock will outperform its straddle by the largest margin?

• Apple (AAPL)
• Facebook (FB)
• Amazon (AMZN)
• Chipotle (CMG)

Listener Questions and Comments

• Question from Geoff - Are straddles really better than analysts estimates for predicting stocks?
• Question from Bob - Concerning earnings - I have been told to take an ATM call and a put and add them together and that is the expected move. Is that correct?

Around the Block: Numbers on the horizon

• Feb 3: Unemployment
• Feb 3: Factory Orders

Trading Block: Earnings today include Apple, Under Armour.

Odd Bock: Call writer in Coach Inc. (COH), call spreads trade in Constellation Brands, Inc. (STZ) and calls trade in Pfizer Inc. (PFE)

Mail Block: Questions, comments, and more.

• Options #QuestionOfTheWeek - Time for another earnings straddle battle. Which company will outperform their earnings straddle by the largest margin?
• Apple - $AAPL
• Facebook - $FB
• Amazon - $AMZN
• Chipotle - $CMG

Listner questions:

• Question from Michael Gavriel - Hey guys, I appreciate all the programming. As far as I can tell, the Option Block podcasts sort of arrive a day late. Maybe its my podcast client? I have not looked into it. What I mean is - for example, the recent Option Block show - Option Block 572, it seems like that is a recap of Thursdays action. But when is it published? I sort of 'need' it to be published on Thursday night i.e. the 10th, or very early in the morning, I guess, on the 11th, if I am going to sort of use it to keep me abreast of action ahead of the trading day? Just curious if this is just how your guys schedules work, maybe you record the next morning, and release mid day, in which case I am a bit out of luck in terms of it being a super timely source. But if it is something I am doing wrong on my end, please do let me know! Thanks.
• Question from Tom - What does this article mean?
• Question from Koukas - Researchers say we were in the most narrow equity range since 1933 just before the elction. What's the best way to trade that? Sell out a far out straddle?

Around the Block: Earnings! AAPL, XOM, CMG, AMZN. Trump Twitter watch. Confirmations.

Trading Block: Earnings!

• Before the bell: Southwest, Caterpillar
• After the bell: Alphabet, PayPal, E-Trade, Microsoft, Intel
• GOOGL - $852.70. ATM Straddle: $34, approx. 4%
• MSFT - $64.05. ATM Straddle: $2.75, approx. 4.3%
• INTC - $37.6. ATM Straddle: $1.25, approx. 3.3%
• PAYPAL - $41.52. ATM Straddle: $2.12, approx. 5%
• SBUX - $58.51. ATM Straddle: $2.20, approx. 3.7%

Odd Block: Calls trade in Kate Spade Co. (KATE), calls trade in Technology SPDR (XLK) and puts trade in JPMorgan Alerian MLP index (AMJ)

Strategy Block: Uncle Mike Tosaw discusses dollar-cost averaging

Mail Block: Questions, comments, polls, and more.

Options #QuestionOfTheWeek: Lots of earnings on the horizon. Which company will outperform their earnings straddle by the largest margin?

• Alphabet - $GOOGL
• Microsoft - $MSFT
• Intel - $INTC
• Starbucks - $SBUX

Listener questions:

• Question from Tim Avery - If I choose an advisor that uses options do they traditionally charge higher fees than straight-up equity advisors?
• Question from Kddidy - I managed to buy 100 NAK Feb 3.00 Puts at .25 when the stock was trading at $3.30. Do you have any idea how this could happen? I am not sure if I should feel lucky or stupid.
• Question from Yukoner - Are covered calls still a viable strategy in a 401k these days?

Around the Block/This Week in the Market:

• Jan 26: Jobless Claims, International Trade, New Home Sales
• Jan 27: Durable Goods, GDP, Consumer Sentiment

Trading Block: The Trump Effect: President Donald Trump is set to unleash a cascade of stock-market anxiety - The day of reckoning for the Wall Street is here. McDonalds (MCD) earnings today. Friday close - $122.26; ATM Straddle - $3.52, approx. 3%; Open down $.75, Traded as low as $2.44; No more love for all-day breakfast.

Odd Block: Calls and puts trade in Morgan Stanley (MS), calls trade in Home Depot Inc (HD) and calls trade in Lending Club Corp (LC)

Mail Block: Questions, Comments, Polls, and more

Options #QuestionOfTheWeek

Earnings Season awakens! How do you play earnings using options? Are you an Earnings #Jedi or #Sith?

• 41% - Dark Side (Short Premium)
• 26% - Light Side (Long Premium)
• 25% - No Side - Avoid earnings
• 08% - Other (Reply/DM w/ideas)

Options #QuestionOfTheWeek - Lots of earnings on the horizon. Which company will outperform their earnings straddle by the largest margin?

• Alphabet - $GOOGL
• Microsoft - $MSFT
• Intel - $INTC
• Starbucks - $SBUX

Listener questions and comments

• Comment from Steve Place - CREE it is always CREE
• Question from Chris - Is there a way to subscribe to your posts as they go up on the website so you can get notified via email or mobile phone? Thanks, Chris
• Question from Fundconcept - Do you think activist investors opportunities will rise considering their experience with mkt volatility?

Around the Block/Earnings Highlights this Week:

• Tuesday - Alibaba Group, Verizon, Johnson & Johnson, 3M, Kimberly-Clark
• Wednesday - Boeing, Abbott Labs, eBay, Qualcomm, AT&T
• Thursday - Alphabet, PayPal, E-Trade, Microsoft, Southwest, Caterpillar, Intel
• Friday - Honeywell

Trading Block: Stocks tumble ahead of Trump inauguration - Dow off 100. Netflix: Another crazy earnings for NFLX. Close = $133.26, straddle = $12.60 / 9.5%. Spiked to $145 in the after-hours, opened at $142 today. How a one-two, Trump-Yellen punch may move interest rates.

Strategy Block: Uncle Mike Tosaw discusses the importance of event risk

Odd Block: Puts trade in 3D Systems Corp (DDD); Calls trade in Avon Products, Inc (AVP); Calls trade in Union Pacific Corp (UNP)

Mail Block/Options QuestionOfTheWeek:

Earnings Season awakens! How do you play earnings using options? Are you an Earnings #Jedi or #Sith?

• Dark Side (Short Premium)
• Light Side (Long Premium)
• No Side - Avoid earnings
• Other (Reply/DM w/ideas)

Listener questions and comments:

• Comment from Scott Francis - Generally most short with puts unless stock has been hammered then you get short squeeze
• Question from Piggyback - Learned about Lightspeed from the last show. Checked out their site and saw $.60 per contract but didn't see a ticket charge. Do they have one? Answer from Kevin:No ticket charge on options. We will tier commissions based on activity, at the lowest activity level we will charge $0.60/contract with $1.00 min. (So a 5 lot is $3.00, a 1 lot will be $1.00.) We can go down to $0.20/contact for active accounts, tiering schedule is on our website. Mention Option Insider when you call Lightspeed we will give them another nickel off the commission.
• Question from Ski -As for the repealing and recall of Obamacare. How do you price LEAPs on spider biotech? Someone bought 340 Jan 2018 55 Puts on XBI. Is this a bet on the repel of Obamacare? If so, are LEAP puts a good way to go?
• Question from Sean - If a trader thought that a price was going down, would a put not have been the best trade in the asian session?

Around the Block:

This Week in the Market -Jan 19: Jobless Claims, Housing Starts

Earnings This Week

• Thursday - Union Pacific - Thursday am; IBM - Thursday pm
• riday General Electric, Procter & Gamble Co.

Trading Block: Stocks sharply lower: Dow drops about 150 points. Who can slow down the Amazon juggernaut?

Odd Block: Calls trade in Cheasepeake Energy (CHK), puts trade in Fiat Chrysler Auto NV (FCAU) and puts trade in Ford Motor Co (F).

Mail Block: #QuestionOfTheWeek

$VIX hit a high of 28 last year. How high will $VIX get in 2017?

• About the same (27-29)
• Slightly Lower (24-26)
• Slightly Higher (30 - 33)
• Much Higher (Above 33)

Listner questions and comments:

• Question from Ian Wagner: Overheard at #STACMWM retail #options panel: "Customers are market-takers. They do not deserve to trade on our bid." This would seem to be a pretty profound statement. Can you discuss on #OptionBlock?
• Comment from Max: Who can stop Amazon? Well Trump surely can.
• Question from RealRX: Hey fellas! Heavy call buying OTM in Bank of America. In particular the Jan 25.5 call expiring on the 20th, and other bank stocks. Looks like protection again massive short sales since smart money usually buys iTM (could be wrong). Do you guys see this as a sign of bearish sentiment on financials with the dollar weakness, multiple rate hikes priced in, etc? Smells funny to me.
• Comment from The Real Justin: I am think gold will continue to run up to inauguration.

Around the Block/This Week in the Market:

• Jan 13: PPI, Retail Sales, Consumer Sentiment

Earnings Highlights this Week

• Thursday - Delta Airlines
• Friday - Bank of America, JP Morgan, Wells Fargo, PNC, Blackrock

Trading Block: Oil drop stymies the Dows march to 20,000. Tech stocks send Nasdaq to record, Apple is celebrating the tenth anniversary of the iPhone. Gold prices settle at highest level in nearly 6 weeks. The options market is not too worried about retail (XRT) woes, but should it be? Is Amazon.com the mall killer?

Odd Block: Calls trade in 3D System Corp (DDD), calls trade in IAMGOLD Corp (IAG) and calls trade in Direxion Daily Junior Gold Minors (JNUG).

Strategy Block: Uncle Mike Tosaw discusses trading silver and other metals.

Around the Block:

This Week in the Market

• Jan 10: JOLTS
• Jan 12: Jobless Claims, Treasury Budget
• Jan 13: PPI, Retail Sales, Consumer Sentiment

Earnings this Week

• Thursday - Delta Airlines
• Friday - Bank of America, JP Morgan, Wells Fargo, PNC, Blackrock

Trading Block: Looking back at 2016! The thrills of victory. The agonies of defeat.

Odd Block: Andrew's favorite Odd Block trades from 2016

• Big winner: Calls trade in Market Vectors Gold Miners ETF (GDX). Size upside calls trade (buy Jun expiration $5 ITM) - 2/4/16
• Favorite House Money Roll: Calls trade in Advanced Mico Devices Inc. (AMD). Calls roll up in Jan 2017 - 8/23/16
• Big Jury is still out: Calls trade in Financial Select SPDR (XLF). Size calls trade - 11/17

Mail Block: Happy New Year!

First #QuestionOfTheWeek for 2017. Total #Options volume dropped 2% last year. How will 2017 #Options volume compare?

• About the Same (+- .5%)
• Modest Increase (up 1-2%)
• Modest Drop (down 1-2%)
• Big Change (+- over 2%)

Listener questions

• Question from Scott - I benefited from your unusual activity report (of course there is due diligence on my part). Thank you! Do you have any subscription service for unusual activity? More in depth? Great insight, loved how you filtered the noise. Happy New Year!!"
• Question from WilliamPZE - Does it make sense to buy Rite Aids puts March 7, as Walgreens will close the deal on 01-27-17? Your reply is much appreciated. Thanks, Bill
• Question from RealRK - I just entered the industry. I passed the 7 and 66, but I will not be doing a lot in the options arena aside from hedging. I have a lot of time in the next month, do you guys have suggestions for furthering options knowledge and possibly becoming a specialist in the few years?
• Comment from ELXDX86 - Options Bootcamp is THE best way to start learning options!

Around the Block/This Week in the Market: Nonfarms payrolls for December on Friday, Jan 6.

Trading Block: A look back at the year 2016 in the options market. An overview of Lightspeed Trading with guest co-host Kevin Ott. Oil falls for the first time in nine days as U.S. crude supplies climb.

Odd Block: Calls trade in Moblieye NV (MBLY), calls roll in Jetblue Corp (JBLU), puts trade in Kinross Gold (KGC).

Strategy Block: Uncle Mike Tosaw discusses 1256 contracts

Mail Block: Listener questions and comments

• Question from Trader Taz1 - Do you have a broker recommendation for someone who is new to options? Maybe with a cash account since I do not want to do margin?
• Question from Yukoner - Are covered calls still a viable strategy in a 401k these days?
• Question from JLN84 - I bought a call on a major equity that is now in-the-money. What is my next step? Do I need to do something to get the stock?

Around the Block/This Week in the Market:

Will be a lighter trading week as many traders and investors will be taking the week off because of the holidays. There are a couple of economic reports worth noting listed below. Happy New Year!

• Dec 27: Consumer Confidence
• Dec 28: Pending Home Sales
• Dec 29: Jobless Claims
• Dec 29: International Trade