Category Archives: Education

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Calculating the New VIX—the Easy Part

The movements of the CBOE’s VIX® are often confusing.  It usually moves the opposite direction of the S&P 500 but not always.  On Fridays the VIX tends to sag and on Mondays it often climbs because S&P 500 (SPX) option traders are adjusting prices to mitigate value distortions caused by the weekend. In addition to these market driven eccentricities the [...]

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Will The Bounce Have Legs? – Weekly Market Outlook

Although the market technically lost ground last week, between Wednesday’s and Thursday’s back-to-back intraday reversal bars and Friday’s strong bullish follow-through, stocks ended the week on such a positive note that it’s tough not to be at least a little bullish now.  And, given that all big trends start out as small ones, Friday’s bullish [...]

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Weekly Weekly’s Option Report 10/16/14

Traders are loving the wild rides in the market. I’m Angela Miles covering Weekly’s options expiring next Friday, 10/24.  I’m starting with SPX this week, because in my last weeklys report, there was notable downside put buying around the 1875 strike. Wow, did those traders play it spot on as the S&P 500 plunged!  In [...]

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More 2017 LEAPS® Listed Today

As of this morning, we are now 2/3 of the way through listing ETF and stock (equity)  LEAPS® options expiring in January of 2017.  Monday September 15th we added 2017 Leaps for stocks on the “January Cycle”.  This morning we added LEAPS on those stocks and ETF’s in the “February Cycle”,  and in five weeks [...]

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Do Options Dream of Dancing Underliers?

While doing simulations on volatility and the square root of time I started thinking about what kind of time options experience—calendar time, market time, or something in-between. The CBOE’s VIX® calculations use calendar time, a 365 day year, but most option gurus recommend using a 252 day year for volatility calculations—the typical number of trading [...]

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Warning Alarm Or Healthy Pullback? – Weekly Market Outlook 9.29.14

The BigTrends TrendScore is a daily reading on the bullish/ bearish level of various market assets – it uses the S&P 500 Index (SPX) (SPY) as a proxy for the broad market.  The SPY Trend-Score fell out of the bullish range for the first time since early/mid August on last Thursday, but did close back into bullish territory on Friday. To some [...]

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BABA, It’s Option Time – Monday

CBOE has received permission from the OCC  to list Alibaba Group Holding (BABA, ~ $89) options next Monday, Sep. 29th .  Here’s  what you need to know: Strikes:               75 – 100 Increments:         5-point Cycle:                  January LEAPS:                  Yes Penny Pricing:    No Weekly’s:            Yes American Style options like all other stocks, trading hours will also be standard – 8:30am [...]

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Weekly Weekly’s for 9.25.14

It’s big week for weekly options!  I’m Angela Miles covering weekly options expiring this Friday and next Friday. Apple shares are trading around a 3 point range this week. Options contracts are trading briskly. Apple confirms pulling its IOS 8 software update, which is causing some iPhone users to lose their cell service. There are also customer complaints [...]

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How I Paid off $22,000 of Credit Card Debt

Ding dong the witch is dead! Which old witch? The credit debt witch! Here’s how I killed the wicked old witch of debt and eliminated twenty two thousand of credit card debt in just three years. If you have questions or want to share your story about paying off credit card debt visit – http://youngfinances.com/

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Weekly Weekly’s for 9.18.14

Where does the trade go from here?  I’m Angela Miles, and that is what I am covering today. Option’s plays in hot stocks going into next week’s options expiration. Let’s get it started with the grand-daddy of them all: Apple. Apple’s iPhone 6 hits store shelves tomorrow. Implied volatility has remained tame with many traders [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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Are You Making These Common Financial Mistakes?

The social media team at CBOE is proud to welcome a new contributor.  I met LaTisha Styles when visiting Kennesaw State University a few years ago. She is one of the brightest and most articulate students I have had the pleasure of meeting while traveling on behalf of CBOE. In 2010 LaTisha started YoungFinances.com and has been [...]

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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 [...]

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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 [...]

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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 [...]

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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. [...]

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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. [...]

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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 [...]

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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 [...]

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“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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]