Weekly Options Market Update


Below are some excerpts from Cabot Options Trader, your guide to quick profits using puts, calls, spreads, straddles, iron condors and other options trades. Analyst Jacob Mintz explains and recommends diverse investing strategies for big gains with controlled risk.

Options Market Update

Economic data releases this week will be fairly light. In stark contrast, there will be an overwhelming number of major companies set to release earnings.»

Options Market Update

Some might interpret the low put buying as a great sign that traders aren’t concerned. Contrarians might push back that you need to buy puts when no one else is. »

Options Market Update

Traders again saw why put protection is an important part of portfolios as the unknown (flash crash for the British pound) can shake up the market faster than the known (elections, job reports).»

Options Market Update

As is always the case as the calendar flips from one quarter to the next, it’s interesting to see which sectors and stocks the smart money will be targeting.»

Options Market Update

Because so many traders are short the market or under-invested, there’s potential for a big run into equities into year-end.»

Options Market Update

The VIX closed at 15.37 on Friday, lower for the week by 12%. I expect this will the lowest the VIX will go ahead of the Federal Reserve’s meeting on Tuesday and Wednesday.»

Options Market Update

The VIX closed the week at 17.50, higher by 46% on the week. Most of the rise came on Friday, as the “fear index” slowly rose throughout the day, and then spiked into the close. »

Options Market Update

While the VIX is at 12, the 30-day realized volatility in the S&P 500 is at a shockingly low level of 5, so the VIX is still overpriced by 7 points.»

Options Market Update

While many savvy investors are recommending buying puts/volatility, many other savvy investors are selling puts/volatility. »

Options Market Update

Ahead of Janet Yellen's speech tomorrow, there has been an uptick in call buying in interest-rate-sensitive stocks such as the financials.»

Options Market Update

The low level in the VIX will continue as long as the S&P 500 stays within a couple percent of all-time highs and intra-day market volatility remains at historically low levels.»

Options Market Update

This week, traders will turn their attention to earnings from many of the nation’s largest retailers including Wal-Mart (WMT), Home Depot (HD), Lowes (LOW) and Target (TGT).»

Options Market Update

BMY fell 17% on Friday after one of its cancer drugs failed to meet targets in a late-stage study. Meanwhile, MRK, which sells a competing drug, gained 10% following the BMY news. »

Options Market Update

While some of the smart money is calling for a pullback, last week, even as the market essentially went nowhere, the price action was quite impressive. »

Options Market Update

There have been no signs that the market will pull back, and I have not yet seen large bearish bets or hedges. Until I see those signals, we will continue to lean bullish.»

Options Market Update

The chorus of hedge fund managers and large brokerage houses voicing disbelief in the market’s recent rally grows louder and louder.»

Options Market Update

Now that the Brexit hysteria has passed, the Jobs Report for the month is over and the Federal Reserve seems to be on hold, it’s time to focus on the start of earnings season. »

Options Market Update

If the VIX trades much below 15, in these uncertain times and the market moving as much as it is, I like the risk/reward of buying market volatility.»

Options Market Update

The fear index is now up 90% in the past three weeks, and Friday’s nearly 50% spike higher is one of the top-five biggest single-day moves ever for the VIX.»

Options Market Update

The upcoming Brexit vote has the potential to be a real nuisance for traders and investors. Without question, there is the potential for some market volatility following the vote. »

Options Market Update

Traders are becoming more and more anxious about the potential for the U.K. to leave the European Union, and what the ramifications would be for the markets.»

Options Market Update

Last week was packed with economic data and potential market-moving events, but virtually none of the potential volatility was realized. This week, in direct contrast, has very few such events.»

Options Market Update

Only for very brief moments recently did the VIX get above the 15/16 levels. This signals to me that the big market players do not fear a big pullback and we should stay in our bullish positions.»

Options Market Update

The Volatility Index (VIX) closed the week at 15.20, virtually unchanged on the week and almost the exact same level it has closed at for the last several weeks. »

Options Market Update May 16, 2016

While there’s a great deal of concern amid traders because the three major indexes have been weak, the VIX continues to show only mild concern.»

Options Market Update May 9, 2016

After the recent 3% fall in S&P 500, I added another bullish position to the portfolio on Friday afternoon for three reasons.»

Options Market Update May 2, 2016

Two weeks ago, I began highlighting that put buying was matching, or even outweighing, call buying—this is fairly rare in an up-trending market.»

Options Market Update April 25, 2016

The upcoming week is packed with economic data releases and earnings announcements, and there’s the potential for volatility based on these catalysts Tuesday through Friday.»

Options Market Update April 18, 2016

There will be plenty of market-moving catalysts this week. First, the market will react this morning to the lack of an oil deal from the world’s largest oil producers.»

Options Market Update April 11, 2016

The market is expecting very little from the financials this earnings season, and it will be interesting to see how the market reacts to negative/positive earnings reports.»

Options Market Update April 4, 2016

Rarely does the VIX stay at such depressed levels for long, and that the risk/reward at such cheap prices is skewed towards buying volatility vs. selling.»

Options Market Update March 28, 2016

This week will be packed with important economic data including Consumer Confidence, Consumer Sentiment, Consumer Spending and two manufacturing reports.»

Options Market Update March 21, 2016

I would be very cautious buying too many options this week, as the decay of the upcoming long weekend will likely hurt long calls/puts unless stocks or indexes make big moves.»

Options Market Update March 14, 2016

After the European Central Bank "fired its bazooka" of economic stimulus, European and U.S. markets swung wildly on Thursday, but managed to close at the highs for the week on Friday. For the week, the S&P 500 gained 1.11%, the Dow added 1.21%, and the Nasdaq advanced by 0.67%.»

Options Market Update March 7, 2016

If you are bullish or bearish on these stocks, many of which added over 100% the past week, I recommend using calls or puts to make your “bets.”»

Options Market Update February 29, 2016

This week will be packed with important economic data, but the biggest event of the week could come from the political world. »

Options Market Update February 22, 2016

The VIX closed the week at 20.53, lower by 19%. What was interesting was that the VIX continued to decline into the end of the week, even as the market stopped advancing.»

Options Market Update February 15, 2016

In light of the recent volatility in the market and dire predictions for a global recession, buying puts/volatility against a portfolio seems to be a prudent tool even at these levels. »

Options Market Update February 8, 2016

For the bears, Friday’s price action was nearly ideal, as former market leaders such as Facebook, Google and Microsoft, which had recently handily beat earnings expectations, were crushed.»

Options Market Update February 1, 2016

Earnings season rolls on this week with reports from companies such as Google (GOOG), Dow Chemical (DOW), Pfizer (PFE) and Exxon Mobil (XOM). It's also a big week for economic data releases.»

Options Market Update January 25, 2016

This week is packed with important economic releases, including Consumer Confidence, GDP and the Federal Reserve’s Announcement on Wednesday.»

Options Market Update January 18, 2016

Earnings season ramps up significantly this week, with reports from Bank of America (BAC), Delta Airlines (DAL), Morgan Stanley (MS), Netflix (NFLX) and Goldman Sachs (GS). »

Options Market Update January 11, 2016

The upcoming week is full of economic data releases, Federal Reserve member speeches and the start of earnings season. Unfortunately, very little of that will matter to U.S. stocks. »

Options Market Update January 4, 2016

The release of economic data will be very heavy this week. Leading the headlines will likely be Friday’s release of the December Jobs Report.»

Options Market Update December 28, 2015

The overall market continues to stay within a reasonably tight range, while under the surface there is extreme sector rotation. What sparks this rotation is anyone's guess. »

Options Market Update December 21, 2015

This week is full of economic data including third quarter GDP, and housing and oil data. It will be interesting to see how the week plays out because sentiment is swinging wildly.»

Options Market Update December 14, 2015

Why would the steady decline in the price of oil cause selling in stocks such as Amazon or Facebook? The reason is the meltdown in the high yield market.»

Options Market Update December 7, 2015

All successful traders have their own rules on stops. Some traders believe in “hard stops,” some believe in “loose mental stops” and others believe in a combination of the two.»

Options Market Update November 30, 2015

The market is pricing in an approximately 72% chance of a rate hike in December, and Friday's jobs number will go a long way toward firming up the odds.»

Options Market Update November 23, 2015

The couple of hours or days when options are mispriced are the times when it makes best sense to execute a buy-write, naked put or other volatility-selling strategies. »

Options Market Update November 16, 2015

The VIX closed the week at 20.08, or higher by 40% for the week. While a significant rise, it was not a huge spike but rather a slow and steady grind higher. »

Options Market Update November 9, 2015

The VIX closed the week at 14.33, marginally lower for the week. As the price of puts has declined along with the VIX, my scanner has been picking up on more and more strangle purchases.»

Options Market Update November 2, 2015

Approximately one-third of S&P 500 companies will report earnings this week, including Tesla Motors on Tuesday, Facebook on Wednesday and Walt Disney on Thursday, and the October Jobs Report is due on Friday.»

Options Market Update: Rough Week for Ackman

As of Bill Ackman’s latest filing, nearly 30% of his hedge fund’s capital is invested in Valeant Pharmaceutical, which fell by almost 45% at one point last week. »

Options Market Update: Train Wrecks Continue

The list of daily "train wrecks" continues to grow this earnings season as Pandora (P) is down 35% today, Whirlpool (WHR) is down 10% and select biotechs have lost 10%-20% each day.»

Options Market Update: Stops and Quick Profits

This week is light on economic data, but packed with earnings announcements. We'll be active this afternoon and tomorrow, selling new calls against positions whose calls expired on Friday. »

Options Market Update: Short-Term Bullish

Clearly market momentum is bullish in the short term, but there could be a great deal of supply/sellers waiting to take profits or exit positions that they didn’t liquidate before the August selloff. »

Options Market Update: The Dogs Explode Higher

On Friday, a trader bought 40,000 Exxon Mobile (XOM) November 77.5 Calls, and call buying was brisk in nearly every oil stock. »

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