Sep 13, 2013
Option Block 275: Predictably Crappy
Trading Block: A mild selloff, but gold and silver took it on the
chin. AAPL down 30 handles in a dismal post iPhone
announcement. Ichan liked it at $500, he’ll love it at $470.
Lulu earnings before the open...sheer pants knock the stock down
5%, well off the highs of $82 from earlier this year.
Odd Block: Puts trade in Mechel OAO (MTL), calls trade in
Wendy’s Co. (WEN), and calls trade in Vera Bradley Inc. (VRA). Alex
discloses that he knows way too much about women’s retail.
Xpress Block: Lots of questions coming in about AAPL, LULU, and
SPX.
Mail Block: Question from Contrails.
Hi Mark, I really like your talk shows and loving all the humor.
Thank you for educating and entertaining me all those night shifts
that you guys keep me in company. I have one burning question for
you regarding an observation I noticed today as I was following the
SPY and SPY weekly options. First off, I am a noober. But i could
not find an explanation for what I saw for those weeklys that are
expiring in 4 days. So what happened is that the ATM and ITM calls
were not following the price of the SPY. So as SPY was fluctuating
up and down, the calls mentioned above were higher in price around
1030 AM EST compared with calls corresponding to same SPY price
later during the day around 1300. The call price difference was
about 15% which is a lot for home gamer like me. Why is that??? By
the way I did not check the Puts, I'll look at it later today… Do
the weeklys lose time value Theta as the hours go by during trading
day? Or is this something related to the all mysterious Vega? But I
plotted the greeks of those options on TOS and they were all flat
lines, Confusing!!! Please enlighten me more Please don't mention
my real name on the podcast. You can call me "Contrails" And please
let me know if you get a chance the title of the podcast you'll
answer my burning question. Your fan, Contrails
Around the Block: Looking at gold, silver, and oil in light
of next week’s FOMC meeting. VIX expiration next week.