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
By LAWRENCE MCMILLAN
“.. 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
By BILL LUBY
“.. 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
By STEVEN M. SEARS
“… 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. … “

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