What’s Working Now

Sun, Apr 20, 2014

The easy approaches to the market that worked so well in 2012 and 2013 have performed poorly so far this year. We’re more than a quarter through 2014, and the S&P 500 is up just 0.78% for the year, with several dips so far into negative territory. Short volatility plays, which became hugely popular in recent years, have also seen mixed results. SPVIXSTR (the index tracked by ETPs like XIV) is down more than 9%, indicating that it hasn’t paid…

Good things at other places

Mon, Apr 14, 2014

1) Every quarter, Matthew Boesler at Business Insider polls analysts, economists, and portfolio managers for their picks of the most important charts in the world. Here’s the most recent update, and here is my contribution. The whole series is a great resource. 2) If you listen to podcasts and are a reader here, chances are you’re probably already a fan of Volatility Views, one of the many excellent offerings from The Options Insider network. If you aren’t…

U.S. Market Risk Dashboard Update – No Warnings Signs, Yet

Tue, Apr 8, 2014

Given the fierce market selloff in recent sessions, I thought it would be helpful to check on our favored set of risk indicators for the U.S. market. As of the Monday close, VIX is above its two year median level, indicating a stronger bid for short-dated SPX premium. Longer term implied volatility is still well-anchored with SPY one year at the money options priced near the first quartile threshold. The other indicators are not at elevated levels, either: while…

Highlights from the CBOE Risk Management Conference

Mon, Mar 24, 2014

The annual CBOE Risk Management Conference was held last week in Bonita Springs, FL, and it was a great opportunity to meet some old friends, make new acquaintances, and hear from some industry leaders. I thought I’d share some of my favorite moments from the conference sessions. The most important news from the conference was the announcement by CEO Edward Tilly on Tuesday that, beginning in June, the exchange will offer nearly 24-hour trading in VIX futures five days a…

CBOE Hosts the 30th Annual Risk Management Conference

Thu, Mar 6, 2014

The Chicago Board Options Exchange is holding its 30th annual Risk Management Conference this month in Bonita Springs, Florida, from March 17-19. This is one of the top events of the year for the options industry, and the conference has developed a reputation since its inception for high-quality speakers and panels. The CBOE provides this description of the event: “RMC is an educational forum dedicated to exploring the latest products, trading strategies and tactics used to manage risk exposure…

Options markets aren’t convinced about the “seismic” scale of Russian intervention

Mon, Mar 3, 2014

On Sunday, Eurasia Group President Ian Bremmer wrote about the scale of recent events in Ukraine: “As Russia conducts direct military intervention in Ukraine, the US and Europe condemn it, and the Ukrainian army goes on high alert, we’re witnessing the most seismic geopolitical events since 9/11.” But the options market is not yet convinced of that assessment. Russian stocks fell 10% in early trading on Monday, but the reaction in the RSX ETF has been more bullish than…

Reading In Lieu of Bearishness

Tue, Feb 25, 2014

You know that one slogan about how bearish investors always sound “smarter,” even if they’re wrong most of the time? I’m not sure that being able to conjure up obscure risk scenarios is the same thing as sounding smart. But nevertheless, here is a linkfest in the spirit of that slogan: sometimes, taking some time out to read is a good way to avoid buying stuff at too high a price. - “VIX options make exotics leap” – This…

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Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More

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