Russell’s Weekend Recap
There was very little new in the way of news over the weekend, only certainty seems to be persistent uncertainty.
The guys on Options Action discussed a bearish spread on Amazon (AMZN) stock and a neutral to bearish spread on the XLE ETF which is the Energy Select Sector ETF.
In Barron’s, The Striking Price column discussed an over the counter trade that’s been going around that involves a payout based on a spike in the price of oil and a dramatic drop in the S&P 500 Index. Although this is a complex trade for institutions, it is of interest to know what the big players may be concerned about – higher oil prices and lower stock prices – over the next 3 to 6 months.
Steven Sears also noted the level of the Oil Volatility Index (OVX) rose dramatically last week. The OVX rose from 30.82 to 42.49, a gain of about 38% and the first time the index has breached 40.00 since July of 2010. This index is based on the volatility of option contracts that trade on the USO exchange traded fund which is tied to the price of oil. If you have more interest in the OVX just click on www.cboe.com/ovx.