Apr 24, 2012
Option Block 145: What’s the Point of Open Interest?
Trading Block: The term structure of the VIX was today's worst enemy. Netflix, the widowmaker, reporting after the bell, and exhibiting its typical bad behavior. Apple seems stuck in the $570 range going into earnings. Revisiting a question from last week, what account size do you need to really trade Apple effectively?
Odd Block: Unusual and interesting activity in Aastrom Biosciences (ASTM), IAC Interactive Corp. (IACI), and Old Fields Ltd (GFI).
Xpress Block: Tim Navabi discusses earnings and some of the things you may want to be concerned about when trading options going into earnings.
Mail Block: Email question from Dan Tolefi, Vancouver, BC.
I know that you guys regularly disdain buying premium ahead of
earnings. But what are some scenarios where you would actually
consider going long options going into earning. Bear in mind that I
don't have the capital, or really the sophistication to delta hedge
my positions. So I'm not going to be able to lock in "cheap" Vol.
So I'm really looking for scenarios that would be suitable for the
active retail audience.
Via the Options Insider forum from Delta Trader.
What is the point of open interest? Mark and Andrew were
pretty dismissive of using open interest to inform your options
trading on a recent episode of The Option Block. My question is if
you're not supposed to use OI to inform your options trading, then
what is it good for?
Around the Block: The big news is Apple earnings tomorrow. Will the continued decline in Apple have a continued affect across the broad market? Andrew's favorite, Zenga, reports earnings on 4/26. Also, Amazon 4/26, Ford 4/27, AMZN 4/26, and F 4/27.