Aug 30, 2013
Option Block 272: Presidential
Rope-A-Dope, or Bags of Money
Trading Block: Labor
Day weekend is nearly upon us. VIX cash above the 16-handle.
Jobless claims are down, as expected. HFT and algos appear
to have had a negligible impact on the vol of major futures
Odd Block: Puts trade
in Garmin ltd. (GRMN) Calls buyers in Taiwan Semiconductor Mfg.
- Question from Mike - I have been
watching Dollar General for a while. What do you mean by the seller
could be using an up-tick in volatility going into earnings for a
- Question from Tim C. - Is it
true if I sell a time spread that OX will margin me as if I am
naked short the longer-term option? If so I do not understand that?
Why wouldn’t they treat it like a spread until the nearer-term
- Question from Avega - Why would I
ever trade a back spread? Why waste money on a reverse ratio - say
3x2. Then I am just net long one contract - can I just save money
and buy the one?
Around the Block: Watch out
for the weekend risk! Perhaps scoop some cheap premium on friday.