Cusick’s Corner

We would like to welcome a new contributor to the CBOE Blog community, Joe Cusick. Joe is a Senior Vice President of Education and a Senior Market Analyst for OptionsXpress. You may have seen Joe on CNBC, Bloomberg or read his comments in BARRON’s or the WSJ, among other places. Joe’s trading experience goes way back. Prior to working with OptionsXpress Joe managed his own book of business. He also was a Market-Maker and portfolio manager at the Chicago Board of Options Exchange. Joseph is a graduate of Marquette University and holds his Series 4, 7 and 63 registrations with FINRA.

Welcome Joe!

I am writing this into today’s Fed number so I will be brief. Unless there is a major shift in policy language or lack of unanimous agreement, the market looks ready to challenge to the upside. In other words, I will be watching to see if dips are being bought or if we just run to resistance of 1300 on the S&Ps, challenge, then roll to the upside. I will have more to say in the After Hours.

Stock market averages have battled back from morning losses and are little changed ahead of the Federal Reserve’s post-meeting statement. After four days of gains, and with little news flow to guide the morning action, the Dow Jones Industrial Average opened with modest losses ahead of the Federal Reserve’s interest rate announcement, which is due today at 12:30pm ET. Economists expect Fed officials to echo the same concerns about the slowing economy and make no changes to rates. Investors will also be looking for information about another round of Quantitative Easing as QE2 comes to an end this month. The day’s stock news is mixed. While FedEx (FDX) shares are up 2.7 percent after its profits topped expectations, Adobe (ADBE) is suffering a 6 percent post-earnings loss. Meanwhile, crude oil prices added 45 cents to $94.62 following today’s inventory data. Gold gained $11.8 to $1,558.2 an ounce. The Dow Jones Industrial Average is flat and 55 points off session lows. The tech-heavy NASDAQ added .6 points. CBOE Volatility Index (.VIX) lost 1.02 to 17.84. Overall options volume is light, with 3.2 million calls and 2.7 million puts traded through 11:45pm ET.

Implied Volatility Mover
FedEx (FDX) shares are up $2.45 to $91.58 and FDX options are seeing heavy trading after the company delivered a $1.75 per share quarterly profit, which was 2 cents better than Street estimates. The stock is rallying on the news. Today’s options volume of 19,000 calls and 9,500 puts is 3.5X the average daily for the shipping company. Meanwhile, implied volatility is down sharply now that the earnings event risk has passed. IV in FedEx options is down 17 percent to 22.

Implied Volatility Mover
FedEx (FDX) shares are up $2.45 to $91.58 and FDX options are seeing heavy trading after the company delivered a $1.75 per share quarterly profit, which was 2 cents better than Street estimates. The stock is rallying on the news. Today’s options volume of 19,000 calls and 9,500 puts is 3.5X the average daily for the shipping company. Meanwhile, implied volatility is down sharply now that the earnings event risk has passed. IV in FedEx options is down 17 percent to 22.

Joe Cusick

www.optionsxpress.com

www.xpoundblog.com/

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Joe Cusick

Joseph Cusick is currently Vice President of Wealth and Asset Management at MoneyBlock. Joseph is passionate about marrying his 20 years of market experience and the powerful tools at MoneyBlock with the goal of empowering wealth managers with the tools to better manage and grow their business. Joseph was previously the Senior…