Blogging Options: CBOE Morning Update 1.14.14

Street watching WFC & JPM as earnings season kicks in.  Google buying NEST looked on as a great fit.  10-year edges up to 2.85%.  Big volume day in VIX options yesterday.

Volatility as an asset class

JP Morgan (JPM) is up $0.29 to $58.01 in the premarket on Q4 benefiting from a continued reduction in the provision for credit losses and equity underwriting revenue increasing 42% from a year earlier. January call option implied volatility is at 26, February and March is at 19; compared to its 26-week average of 22.

Time Warner Cable (TWC) is higher by $1.97 to $134.37 after announcing its board rejected a merger proposal from Charter Communications (CHTR) that valued the company at $132.50 per share. Overall option implied volatility of 23 is below its 26-week average of 28.

Microsoft (MSFT) is down $0.26 to $34.71 in the premarket after Citigroup downgraded its rating to Neutral from Buy citing a balanced risk/reward profile ahead of the company’s new CEO decision.  Overall option implied volatility of 26 is above its 26-week average of 23.

Options active expected to be active @ CBOE: TWC CHTR SSYS TSLA JPM WFC BAC INTC  VIX

CBOE S&P 500 BuyWrite Index (BXM) closed at 1021.80, above its 50-day moving average of 1004.26 cboe.com/BXM

CBOE DJIA BuyWrite Index (BXD) closed at 255.42, above its 50-day moving average of 251.35 cboe.com/micro/bxd/

CBOE S&P 500 Short-Term Volatility Index (VXST) closed at 13.09, above its 10-day moving average of 12.32. VXST is a market-based gauge of expectations of 9-day volatility.   cboe.com/vxst

CBOE Volatility Index (VIX) closed at 13.28, near its 10-day moving average of 13.29 and near its 50-day moving average of 13.51. cboe.com/VIX

SPDR S&P 500 ETF Trust (SPY) is recently up 56c to $182.24 on German industrial production, a surprise drop in U.K. headline inflation and the Nikkei plunging over 3%.

Calls with increasing volume at CBOE:

SPY 1/18/2014 183 25K contracts
QQQ 1/18/2014 87.50 16K
BAC 1/18/2014 17 13K
DOW 1/18/2014 45 12K

Puts with increasing volume at CBOE:

SPY 1/18/2014 181 19K contracts
LNG 1/17/2015 40 9K
DD 4/19/2014 57.50 8K
GME 1/18/2014 41 8K