3 Recent Barron’s Striking Price Columns – All Covered CBOE Indexes

CBOE is a leader in innovation and has introduced a number of indexes designed to provide useful information and tools to options investors.

I am pleased to see that three recent Barron’s Striking Price columns (by three different authors) all covered CBOE indexes such as the BXY, BXM, PUT and/or VIX. Below are excerpts (with emphasis added) from the three columns —

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From: Barron’s The Striking Price
Two Types of Volatility – Why the VIX and VIX futures diverge. And, the beauty of partial protection from market declines.
JANUARY 5, 2013
“.. THE RECENT GAINS in the VIX were short-lived, as the Volatility Index subsequently plunged to 14.68 from 22.72 in two trading days. According to the CBOE, that marked a record two-day percentage loss for the index. The rise and fall created a peak spike in the VIX chart, and such spikes are an intermediate-term buy signal for stocks. … We generally advise clients to keep a partial long-volatility call position in place at all times, moving to full protection when indicators begin to turn bearish for stocks.”

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From: Barron’s The Striking Price
The Case for Options Trading
JANUARY 2, 2013
“.. For those investors who take New Year’s resolutions seriously, I have a suggestion: resolve to sell more options in the coming year. … The case for selling options is fairly simple. Looking at the CBOE Volatility Index (the VIX), relative to the historical volatility of the Standard & Poor’s 500 index, the average VIX was higher than the average historical volatility in the S&P 500 index in 22 of the past 23 years. The only exception was 2008. … While it sounds risky to the uninitiated, systematically selling puts is a proven strategy. The CBOE S&P 500 PutWrite Index, for instance, regularly outperforms the S&P 500 index (nine out of the last 13 years) and does so with considerably less risk. … “

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From: Barron’s The Striking Price
Profiting From Selling Puts, Calls
DECEMBER 22, 2012
“… It was a good year to sell calls. It was an even better year to sell puts. … Performance has proved compelling. As of Thursday’s close, the Chicago Board Options Exchange’s BuyWrite Index (BXM) was up 5.4% on the year. The CBOE’s 2% OTM BuyWrite Index (BXY), which sells out-of-the-money calls, was up 10.4%. The S&P 500 PutWrite Index (PUT) was up 7.6%. True, the Standard & Poor’s 500 index is outperforming the options indexes, but the latter are less risky. The strategies are in such demand, even among bond investors, that Goldman Sachs now sends clients a weekly overwriting list. … “


To access research papers on how CBOE indexes can help you manage portfolio risk and enhance income, please visit www.cboe.com/benchmarks