Some further thoughts on this CXO piece.
Academic papers obviously study problems in a theoretical vacuum. Real world of course differs. I’ve traded options for a while now, and I believe this one gets the gist right. That is, further OTM options provide weaker returns than closer to the money ones. But it may also get [...]
OK, fool me once…..
The RIMM charts have a familiar ring to them. Sometime high flyer? Check. Very low options volatility? Check. Stock itself not doing a darn thing? Check. Looks just like AAPL, FSLR, GOOG, et. al.
Again, sure seems like a great time to load up on some options gamma, as RIMM rarely gets to [...]
Another warning about trading the VIX. Tradable VIX products NEVER move as much or as swiftly as the VIX itself, with the possible exception of the day before they expire.
The lower chart shows the VIX over the past 6 month’s, while the higher chart shows the VIX Sep. futures (thank you Bill). To line they [...]
Mark from Options For Rookies makes an excellent point regarding on my thought that in this choppy environment, short gamma players should hang tough and wait for the inevitable reversal one or three days later. That’s an unrealistic trading strategy in the real wold. In fact that’s exactly how Expiration Week whipsaws take place. Short [...]
Got this in email yesterday:
Looking at FNM this morning it was trading 4.85. The Sept 5.00 call was trading about 1.25. I realize this is just because the vol has blown out and selling this vol is probably the right thing to do. Were it a more normal situation I know a strangle, straddle, butterfly [...]
If you’re tracking the Dick’s (DKS: Sporting Goods) to Dicks (LEH: Loaning Bads) relationship, big change of direction lately as one (DKS) not looking so much like wallpaper any more. Probably the main factor is that one of them is selling the Speedo Michael Phelps line of everything and the other is selling anything they [...]
So how mediocre is volatility these days?
How about a spot where by all rights options should see a vertitable spike now, Goldman Sachs (GS)?
You have an ugly stock chart. You have an ugly stock chart with historical volatility on the high end. And you have an ugly stock chart with high end historical volatility in [...]
So if you can’t say something nice, don’t say it, right?
So what to say then of these commodities?
Well, commodity stocks are starting to outperform the underlying. Popped up GDX vs. GLD and SLV, and IYE vs. USO here, and all are in “X”s. GDX veritably bullish vs. SLV.
So if the stocks are “leading” a bit, [...]
Guess who’s got *hand* this expiration? It’s the options shorts. Even the movers of Wednesday, the ags and energy et. al. simply moved into middle ground sort of spots. And with no follow through, no real whipsaw action like we saw in, say, July, when financials went to wallpaper and then soared all within a [...]
It’s one of those times of year again where I like to pre-warn about something. Ignore all volatility indices and measures. Or at least take them with a grain of salt.
All volatility measurements basically take all the *fixed* info, I.e. the stock price, the strike, interest rates, dividends, time until expiration, and price of the [...]
