Nov 25, 2015
Office Hours: Listener questions and comments
- Question from Peter D - Stocks are being hit by latency sensitive strategies like HFT. Is that happening in options as well? Should I steer clients to other products instead?
- Question from Batram - Thank you for the information you provide on your advisors option program. I have found it very useful in my business. I have evaluated multiple online platforms for use with my clients but have not found the optimal solution yet. I would like to hear your recommendations for platforms that can handle basic covered calls, put writes and collars on approximately 200 SMAs. My concerns are ease of use, reporting and compliance. Cost is less of an issue as I do not mind paying for good functionality.
- Question from Neal M - I recently attended a seminar where a financial advisor mentioned using straddles and strangles to make money no matter which direction a stock moved. He was a little light on specifics so I did some google research and found your program. Can you please give overviews of these strategies and explain if they are suitable for longer-term investing via a retirement account?
- Question from AVX16 - The fed is set to raise interest rates in December. While this raise will be nominal it sets the stage for future raises in 2016. I am a relatively new convert to options thanks to this program. I have only used them in the current zero rate environment. Are there any performance peculiarities that I should know before putting my clients into options positions in a rising environment? My primary strategy is 2% out-of-the-money covered calls on spy although I am considering more aggressive income strategies such as covered strangles and iron condors. With the prospect of a rising interest rate environment on the horizon are there certain impacts on options that i should note before using these strategies for clients.
- Question from AngeloM4 - Can you clarify what is meant by a naked options position vs a covered options position? Sexy name aside - is the former truly exposed to unlimited risk?
- Question from beansie - Is there such thing as a commitment of traders report for options? Something that shows bullish and bearish positions in the marketplace?
- Question from Ben A - Are the options prices more volatile going into events like earnings and crop reports? What is the cause of volatility in the options market? Where does it come from?
- Question from Sebastian - What is the status of the Chinese options market? Are options going to be listed in anytime soon? Do you expect they will be accessible to outside investors? I have multiple clients interested in investing in china but I do not see many viable options offerings.
- Question from INC451 - I saw a recent headline stating that the second BATS options exchange launched on 11/3 bringing the total number of options exchanges to 13. Should I be excited or concerned that there are so many exchanges listing spy and apple options? In my experience with equities more venues does not always equal more liquidity and deeper markets. In fact, it can frequently be the opposite.
- Question from Kevin D - Hi Mark, I love your shows! What happens to my options if the underlying gets halted permanently? Would I ever be able to close them? I am remembering Sino Forest from a few years ago in Canada- stock got halted pending a fraud investigation and never came back. I am worried that I will not be able to cash in on my BABA Puts! Thanks, Kevin Sent from my iPhone