So the Striking Price Daily picked up on the sluggish VIX yesterday. They’re several days late to the party, as all the key options bloggers have been talking about this for awhile, but then what can you expect from a traditional media outlet? Anyway, they get the basic story right, but what’s with Pete Najarian stating the obvious? “I’d like to see a three on the front number of the VIX to signify that panic has set in,” says Najarian. “That has…
Sunday, January 6, 2008
Yes, it’s time for our list of predictions for 2008. Economy. GDP growth in the United States will slow to 1.5%, prompting an annoying number of articles on the decline of the US and lots of analogies to the Roman Empire. The Fed will bring discount rates all the way down to a futile 4.25%, in an attempt to put out an economic grease fire with a fiscal bottle of Evian. Which, as everyone knows, spells “naive” backwards. Oil will pull…
Thursday, January 3, 2008
This list from Henry Schwartz at Trade Alert lists the volume numbers for the top options and top options exchanges for 2007. A few notable items: 8 of the 17 listed are index products, counting VIX and XLF DIA comes in last on the list AAPL is the top single company options listing, at #5 Around 23 million VIX contracts traded last year (the #11 spot). That’s a lot. Think about this: the theory is that a huge chunk of options bought and sold are done so…
Tuesday, November 6, 2007
Boring rally this morning, and we’re not buying it (either literally or figuratively). Dow now hovering around 30, not a bad time to grab some negative deltas if you need them, and if you’re into that sort of thing. Also, here’s some good reading from Nouriel Roubini: The bloodbath in credit and financial markets will continue and sharply worsen. The gist is that the major financial institutions are valuing large portions of their assets by the relatively voodoo-tastic mark-to-model model. Merrill…
Wednesday, October 10, 2007
We write about individual trades and strategies so often it’s easy to sometimes lose sight of the big picture. But macroscopic issues affect us just as much as anybody else, which is why you should read this article from Financial Armageddon, complete with Lou Reed quote. If you think any of this country’s major financial institutions are much more than modern equivalents of priests, wizards, and two-bit hustlers, you probably just haven’t read enough. Level 3 assets, to extend the metaphor, serve…
Wednesday, January 16, 2008
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