Feb 13, 2018
Trading Block: One week later, how is everyone doing? SPY is back in rally mode. VIX back in the mid-20s. It's been a wild week for CBOE. Stock took a hit, threatened $100, now rallying up 4%. Earnings this week include APRN, before the bell tomorrow. ATM straddle $0.65, approx. 20%. Volatility's awakening spurs a record long position in VIX Futures
Odd Block: Review from 2/8: Someone unloading calls in (UNP), Pre earnings action in Under Armor (UAA).
Mail Block: Options question of the week
VIX is moving like crazy today. It's already blown past 23 and is threatening 35. So let's dial up our $VIX threshold for extra #ZombieApocalypse fun. You buying or selling these levels? Quite Simply: Where will $VIX close on Friday?
- 21% - Crazy Town: 30-35
- 22% - ZombieApocalypse: >35
- 19% - Crazy: 25-30
- 38% - Mildly Crazy: <25
Options question of the week, part two: It's been a rocky week for the markets. People are understandably scared and confused. That raises the question: Which product are you most concerned about over the next 30 days? Which product would you not touch with a 10-foot pole?
- VIX
- SVXY
- SPY
- Bitcoin: XBT, BTC, etc.
Listener questions and comments:
- Follow-up from Matt Williamson - Disclosure time: I'm in those FB $5.00 calls. But why??? I think Mike will see it first...No, you were actually close with your box theory. I just think Mike be the first to slap his forehead.
- Question from JohnnyBananas1 - If you buy a put option and the strike price is $5 and the drops to $3. Is it still worth $ even if it's 3$ under...even though my strike price is 5$?? So if the stock price is $7 drop to 5(strike). But end up going to 3 and my option is worth ~$4?...so I don't have to sell if I reach my strike price? Is the same with call options? That's what confuses me is the strike$. #learning
- Question from Chris T. - The most I can lose buying SVXY is the price I pay, correct? So can I buy it ~$10 and treat it like a lotto ticket call?
Around the Block: Earnings! Blue Apron, Under Armor. Can we get back into positive territory for the year in the S&P? Can get get three days of up? Or a couple of days of "not up so much"?