Category Archives: Education

No Comments

Alibaba – Premiering Soon at CBOE

We don’t have to wait “One Thousand and One Nights” for the Alibaba IPO.  We have seen several reports about Alibaba (BABA is the expected stock symbol) being priced on Thursday September 18th and shares trading Friday, September 19th.  When all is finalized we will be back to confirm everything, but this is a good [...]

No Comments

The Volatility Surface: Skew and Term Structure

In one of the final sessions of Day Two, Sheldon Natenberg, Co-Director of Education, Chicago Trading Company, and Natasha Jhunjhunwala, Director, Equity Derivatives Product Management, Credit Suisse, presented on “The Volatility Surface: Skew and Term Structure.” Natenberg is the author of “Option Volatility and Pricing,” one of the most widely read books by option traders [...]

No Comments

Weekly Weekly’s for 9.4.14

Apple leads the way in my report on Weekly’s. The highly anticipated new product launch is next Tuesday. Today, I’m covering weeklys set to expire this Friday and next Friday, September 12th. It’s been a wild week for Apple (AAPL) traders. The stock is now trading below $100. Some people say it’s profit taking ahead [...]

One Comment

Day One CBOE RMC Europe Recap

The 3rd edition of CBOE’s Risk Management Conference held in Europe commenced today with three presentations covering a diverse range of topics. The day began with an informative and educational presentation on Option and Volatility Strategies by Paul Stephens and Colin Bennett.  More color from this colorful presentation may be found at – http://www.cboeoptionshub.com/2014/09/03/rmc-kicks-primer-options-volatility-strategies/ Bill [...]

No Comments

RMC Kicks off with Primer on Options and Volatility Strategies

The first session kicking off the 2014 CBOE Risk Management Conference Europe was led by Paul Stephens from CBOE and Colin Bennett Head of Quantitative and Derivative Strategy at Banco Santander Central Hispano.   Bennett is also the author of Trading Volatility which may be found at www.trading-volatility.com. This session was a great primer for the information [...]

No Comments

Weekly Weekly’s for 8.28.14

As we inch closer to the long Labor Day Holiday weekend, I’m mostly focused on weekly’s with options expiration for this Friday. I have a feeling many traders will be using this strategy with the weeklys for a quick turnaround play before taking off for the weekend. It’s going to be very interesting to see [...]

No Comments

Expiration Friday – At Last

Expiration Friday. Since the beginning of time (OK, the last 40 years we’ve had listed options), options expired on the Saturday following the 3rd Friday of the month.  Why Saturday? Let’s take a walk to the way-back machine with Mr Peabody.   I was a floor trader at the CBOE and I am trading front-month options [...]

No Comments

Labor Day Holiday Trading Schedule

Labor Day is next Monday, this summer went fast.  The following is the trading schedule for Chicago Board Options Exchange® (CBOE®), C2 Options ExchangeSM (C2SM) and CBOE Futures ExchangeSM (CFE®) in observance of the upcoming Labor Day holiday: Friday:  Regular trading hours for everything. Monday:  CBOE & C2 Closed. CFE:   All products closed with the [...]

No Comments

CBOE’s Ed Tilly Takes ALS Ice-Bucket Challenge

I’m a little wet and the water was cold, but I was thrilled to participate in the ALS Ice-Bucket Challenge this afternoon. I’ve challenged three others to do the same – Steve Sears of Barron’s, Rich Repetto of Sandler O’Neill, and market commentator Jon Najarian. As of this morning, the ALS Association has raised $79.7 [...]

No Comments

Weekly Weekly’s for 8.21.14

Gap, GameStop and Salesforce.com all report earnings after the bell and traders are setting up now in weekly options. I’m Angela Miles covering Weeklys set to expire this Friday and next Friday. I’m falling into the Gap to start this report. Some traders are using call spread strategies as an earnings play on GPS. As [...]

No Comments

12 Key Stats Re: VIX Index

In the recent August 16 Striking Price column in Barron’s, Steven Sears authored a piece entitled “A New Vision of VIX” that noted –  “Over the past 21 years, the CBOE Volatility Index, or VIX, has emerged as one of Wall Street’s most watched sentiment indicators. …Krag “Buzz” Gregory, a Goldman strategist, found that U.S. [...]

No Comments

Walking A Fine Line Here – Weekly Market Outlook

In retrospect, last week’s bounce wasn’t have been a total surprise.  Most of the market’s major indices were approaching major support levels, as we’ve previously discussed.  Will the momentum continue or will the bearish volatility return? We’ll look into that, right after a quick look at all of last week’s and this week’s economic numbers. [...]

No Comments

Free VIX Webcast Series – Aug 25 – 27

In just over one week The Options Institute at CBOE will be offering three free webcasts discussing different aspects of the CBOE Volatility Index or VIX. On Monday August 25th I’ll start out with the basics of volatility indexes and introducing exactly what VIX is measuring.  In addition we will look at how the index has historically behaved [...]

No Comments

CBOE Risk Management Conference – RMC Europe in Three Weeks

CBOE’s Risk Management Conference (RMC) Europe is quickly approaching.  As you know, it will be held at the Powerscourt Hotel, County Wicklow, Ireland (near Enniskerry – 20 minutes outside Dublin), from September 3 – 5, 2014.   That’s in three weeks!  We published the first two day’s agendas earlier this week, here is the Day Three [...]

No Comments

“The Game”: An Intern Showdown

We’ve been hearing about it for months. Jim Bittman and Russell Rhoads call it “The Game” against Spot Trading (A proprietary trading firm located seven floors below CBOE’s Regulation Department at 440 S. LaSalle). Jim and Russell got a good amount of entertainment by not explaining how to play the game, regardless of the amount [...]

No Comments

Valuation Trepidation – Weekly Market Outlook

Ouch.  Not that traders didn’t have an inkling the market was overbought and perhaps poised for stumble, but few saw coming the suddenness and size of Thursday’s drubbing.  However it materialized, we have no choice but to at least entertain the possibility that this is the beginning of a much more significant pullback. We’ll slice [...]

No Comments

Part #3 of 4 – Using SPX Options in a Diagonal Spread

Back in May and June we posted two videos on using Index options and SPX Super LEAPS®, this is the third in a four part series on using SPX Index options. You can watch the previous videos by visiting http://www.cboeoptionshub.com/author/shawn-howell/ For this third segment I’m using the SPX LEAPS and Super LEAPS as a foundation [...]

No Comments

Floor Trading History 101: Hand Signals

With the millions of investors and traders across the country involved in the stock, options, and commodities markets, very few have actually seen these products traded in person. Someone who has never taken a tour of any one of these trading floors is missing out on an art that takes years to perfect yet only [...]

No Comments

CBOE Options Institute Visits Shanghai Exchanges

In preparation for the commencement of options trading in China, the Shanghai Stock Exchange and the Shanghai Futures Exchange have been sending various groups of exchange staff, brokers and market makers to The Options Institute at CBOE for basic- to intermediate-level education on options strategies and options pricing. In the last 18 months, 10 classes [...]

No Comments

CBOE at Public Funds Summit This Week

CBOE is working the 3-day Opal Public Funds Summit East in Rhode Island this week. About 250 financial professionals, including four state treasurers and dozens of trustees of public pension funds, have been in attendance.  At the CBOE exhibit table, available educational literature includes fact sheets on CBOE benchmark indexes, on CBOE volatility indexes (including [...]

No Comments

Weekly Weekly’s 7.17.14

Tomorrow is a traditional options expiration. Next week, it’s just the Weeklys, which is what I am focused on today. Popular stocks with weekly options turn in their earnings next week. Next week starts strong with earnings from Netflix ($444). Right after the bell this morning, 10,000 contracts traded with a few call buyers at [...]

No Comments

VIX 101: A Perspective from a CBOE Intern

If you have been following the market at all in the past few months you know what has been going on with the VIX and how customers, brokers, and traders have been going bananas over it. For the young, inexperienced, or “under a rock” investors who are not too familiar with what the VIX is [...]

No Comments

Key SPX & VIX Levels To Watch Here – Weekly Market Outlook

Even with last week’s losses, there’s a glimmer of hope for this overbought market.  And with the onset of earnings season, anything is still possible.  Just know that the deck is still stacked against stocks here.  They reminded everyone last week that no rally can last forever.  The good news is, there are some clear [...]

No Comments

Can You Admit When You Are Wrong?

Admitting you are wrong is not admitting defeat.  But many traders and investors let their ego get in the way and that leads to a calamitous road.  I have seen more train wrecks by option and stock traders happen because a lack of focus, humility and the need to be right at all times.  Traders [...]

No Comments

Why Should You Attend CBOE’s Risk Management Conference Europe?

CBOE will be hosting the 3rd annual CBOE Risk Management Conference Europe this September 3 – 5, 2014, at the Powerscourt Hotel in County Wicklow, Ireland (outside of Dublin).  Here are just five reasons why you should consider attending: Learn the latest trading strategies from practitioners — top institutional derivatives and volatility traders from the [...]

No Comments

Weekly Weekly’s for 6.12.14

LULU earnings miss, TSLA motors higher & social media weeklys in play- TWTR, FB, LNKD.  Weekly Weeklys for Friday June 13th. Lululemon disappointed on earning guidance and it’s taking the stock downward. As the stock trades $38 there are some upside call buyers at the 39, 40 and 42 strikes. But, its the puts that are [...]

No Comments

2016 Index & ETF LEAPS To Be Added

On June 25, 2014, trading will begin for June 2016 LEAPS in the following Index and exchange traded fund (ETF) option products: DJX (Dow Jones Industrial Average) MNX (Mini-NASDAQ 100 Index) NDX (NASDAQ 100 Index) OEF (iShares on the S&P 100 Index Fund) OEX (S&P 100 Index with American Exercise) RUT (Russell 2000 Index) SPX [...]

No Comments

June is Russell Reconstitution Time

For many people June means getting out of school for summer break, warmer weather, and vacations. For me it means Russell Reconstitution time. For those of you unfamiliar with the Russell Reconstitution process I’ll explain a little more – Every year on the last day of June the components for all the Russell Indexes are [...]

No Comments

CBOE RMC Returns to Europe This Fall

The annual CBOE Risk Management Conference (RMC) is the premier financial industry conference designed for institutional users of equity derivatives and volatility products.  Now in its 30th year in the U.S., CBOE will be hosting the 3rd annual CBOE RMC Europe September 3 – 5, 2014 in County Wicklow, Ireland (outside of Dublin). CBOE RMC [...]

No Comments

Looking for a Summer Rally?

We all heard the cries of ‘sell in May and go away’, but that hasn’t materialized – at least for this month.  With only four trading days remaining it appears the SPX 500 and Dow Industrials may squeak out a gain (currently up a fraction in May) while the NASDAQ has been the leader and [...]

No Comments

Answering the VXST vs. VXX Question

The growing popularity of weekly options, coupled with the unique properties of the VIX franchise has led to large growth and overall volumes in the trading of VXX weekly options.  Now that CBOE has launched VXST options, options on “weekly VIX”, investors have another choice.  So how should one go about deciding between the two [...]

No Comments

Weekly Weekly’s 5.22.14

Retail earnings steal the show! I’m Angela Miles, covering weekly options that expire this Friday and some for next week. The long Memorial Holiday is coming up, which means time-decay for options premiums. So these are fast turn around trades. I’m starting with Hewlett Packard. HPQ earning are expected today after the close. As the stock trades $32.50, upside [...]

No Comments

Memorial Day Trading Schedule, Monday May 26th

Next Monday, May 26th, we celebrate Memorial Day, so CBOE and C2 (as well as most other U.S. Exchanges) will be closed. This Friday, May 23rd, we will have normal trading hours at CBOE, C2 and CFE. On Monday May 26th, although CBOE and C2 will be closed, CFE will keep VIX Futures (and VIX [...]

No Comments

9 Weeks (And Counting) Of Treading Water – Weekly Market Outlook

Part of the market’s current stagnation can be chalked up to the time of year… the coming summer doldrums.  Another part of it, however, stems from the fact that traders are simply unsure of what to think here.  The good news is, the floors and ceilings are pretty clear.  The challenge is, there’s no particular [...]

No Comments

Option Trends: Walgreen Company and Herbalife Ltd.

Call buyers have been scoping out WAG, while troubled HLF has attracted put traders Options players are choosing sides on a pair of prominent wellness names: pharmaceutical retailing giant Walgreen Company (NYSE: WAG, $69.62, off $0.25) and nutritional supplements provider Herbalife Ltd. (NYSE: HLF, $61.91, up $0.03). Per data from the major options exchanges, traders [...]

No Comments

Weekly Weeklys Report 5.1.14

Weekly Weeklys I’m headlining with LinkedIn ahead of earnings in this week’s report.  We’re covering Weeklys options that expire this Friday and next Friday, May 9th. Traders are predicting a major move in LinkedIn off earnings. LinkedIn’s straddle is pricing in around a $14 move up or down off the strike price of $160 (~9%).  [...]

No Comments

CBOE Mid-Day Update 4.10.14

VXST options opened for trading on an interesting day.   With momentum tech stocks resuming their downward spiral and their  option implied volatility increasing, VXST options traded several thousand contracts by noon.  VXST futures traded a very respectable 81 contracts.  Option volume overall was heavy. Facebook (FB) is down $3.00 to $59.41. April call option implied [...]

No Comments

Can S&P 500 Bounce From 1850?

Stock indexes snapped a three-day skid with mild gains Tuesday, a move that allowed the S&P 500 to close clear of a key technical level at 1850. Its pursuit of 1900 has been slow going as Q1 wrapped and Q2 kicked off. Market nerves eased Tuesday, which could bode well for a fresh charge higher [...]