The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX and volatility-related articles from print, broadcast and online and social media outlets.
Bracing for Volatility
While volatility continues to rattle the bond and currency markets (see TYVIX Index), options traders believe it’s a matter of ‘when’ — not ‘if’ — volatility returns to equities. Traders are moving to establish hedges in anticipation of higher volatility in the months ahead.
“You Can’t Keep the Panic Out of Stocks Forever, VIX Traders Say” – Callie Bost, Bloomberg News
“Stock Volatility Gains Move in Step with Rising Bond Yields” – JJ Kinahan, Forbes
The Big VIX Trade
This week saw a huge VIX options trade, with an investor rolling a 1 x 2 call spread, closing a July position in exchange for the August expiration. Traders in the VIX pit believe it may have been one of the biggest VIX options trades ever.
“The Big $VIX Trade” – Russell Rhoads, CBOE Options Hub
“Outsized VIX 1×2 Call Swap Rolls Third Time to August” – Daniel O’Leary, EQDerivatives
Using Index Options in a Low Interest Rate Environment
Index options can offer ways to capitalize on the current low interest rate environment without taking on the risks associated with single-stock options. Says one advisor: “you’re seeing liquidity being poured into index options… People are going into the SPX, NDX and RUT options.”
“Single-Stock Options Face Headwinds” – Markets Media