Blogging Options: CBOE Morning Update 8.4.14

Markets look to bounce back this morning after a tough week.  Gaza situation seems to be winding down as some troops depart.  Portugal bank situation getting more complicated but overseas markets slightly higher.  Coolest Chicago July ever.  Big data week in store.  Volatility as an asset class:

Berkshire Hathaway (BRK.B) is higher by $1.97 to $127.80 in the premarket,   Overall option implied volatility of 18 is near its 26-week average of 16.

Michael Kors (KORS) is off $1.44 to $83.27,  despite reporting better than expected Q2 earnings and revenue.  August weekly calls option implied volatility is at 91, August is at 66, September is at 47, November is at 37, January is at 32; compared to its 26-week average of 34.

Pike Corporation (PIKE) is up $3.81 to $11.77 in the premarket after announcing a merger agreement where Court Square Capital Partners and J. Eric Pike, the company’s chairman and CEO, will acquire the company in which each of the company’s shareholders will receive $12.00 in cash. Overall option implied volatility of 79 is above its 26-week average of 57.

Options expected to be active @ CBOE: KORS MU RIG BRK.B AN ALU LNKD AMGN

CBOE SKEW INDEX (SKEW) at 128.93, below 50-day MA of 131.86. SKEW measures the purchase of out-of-the-money S&P 500 Index puts that require a very large downside move to profit from long put positions. An increase of this index indicates greater expectations for an extreme down move.

CBOE Volatility Index (VIX) closed at 17.03, compared to its 10-day moving average of 13.42 and its 50-day moving average of 11.98. cboe.com/VIX

CBOE S&P 500 BuyWrite Index (BXM) at 1075.20, compared to its 10-day moving average of 1091.51 cboe.com/BXM

CBOE DJIA BuyWrite Index (BXD) at 263.78 compared to its 50-day moving average of 268.07 cboe.com/micro/bxd/

CBOE S&P 500 Short-Term Volatility Index (VXST) at 19.01, compared to its 10-day moving average of 13.54. VXST is a market-based gauge of expectations of 9-day stks.co/r0CS2

iPath S&P 500 VIX Short-Term Futures (VXX) is recently down 31c to 32.74

SPDR S&P 500 ETF Trust (SPY) is up 49c to $192.96 as Japanese stocks fell on concerns over Argentina’s default and Portugal’s banking problems.

Calls with increasing volume at CBOE Friday:

DXJ    8/16/2014 52.38 19K contracts
AAPL 8/1/2014     96  17K
SPY    8/1/2014  193  13K
XLF   1/15/2016   25  11K
IWM  8/16/2014 113 10K