Open interest for VIX calls reaches highest level in 5 yearsParallels with 2011 spur hedging for extreme selloffIn Washington debt-ceiling brinkmanship is threatening to push the US into default. And on Wall Street, traders are gaming out what could be a rare Black Swan event.In the options market, hedges against a volatility breakout are seeing the most demand in five years. The cost to protect against a market selloff of around 10%, or one-standard deviation, is the highest in a year. Demand for tail-risk hedges that pay out in a fall as precipitous as 30%, or three deviations — a Black Swan event — has risen to levels last seen at the peak of March’s banking turmoil.The doomsday hedging is taking place on the market fringes, against a pervasive calm that’s pushed the widely used Cboe Vo
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Put bull spreads and application introduction
A bull spread consists of a buy leg and a sell leg of different strikes for the same expiration and same underlying contract.This strategy will pay off in a rising market, also known as a bull market, that is why it is referred to as a bull spread.Bull spreads can be constructed from either going long a call spread or going short a put spread.Put Bull SpreadsBull spreads can be constructed from selling a put spread. Selling a put allows you to collect a premium that you can keep if the underlying futures contract finishes at or above the strike price.A trader believes that the market will have a moderate rise before the options expire. If the underlying market was trading at 100, we can sell the 110-105 put spread. This would entail selling the 110 puts and buying the 105 puts which
Put bull spreads and application introduction
Wall Street Loads Up on Doom Hedges as Countdown to X-Day Begins
Wall Street Loads Up on Doom Hedges as Countdown to X-Day Begins
Top 10 Stocks for Trading Options in the Financial Report Season
The 2022 Q4 earnings season is drawing to a close amid expectations of a soft landing for the US economy. Profit margins for S&P 500 companies have fallen for the sixth straight quarter since peaking at 13% in 2021, and inflation is taking a real bite out of profits across industries.But by the end of February the S&P 500 was up 3%! The stock trend has been positive against pessimistic expectations. Tiger Community compiled a list of the top 10 stocks by options trading volume to see what kind of options trading characteristics they had during earnings season.1. $Tesla Motors(TSLA)$Tesla was arguably the hottest stock option trade of Q1 earnings season. Through February, Tesla shares closed at $205.71, up more than 73%
Top 10 Stocks for Trading Options in the Financial Report Season
【Options Strategy】Q2 Earnings season outlook for U.S. banks
Major U.S. banks, such as JPMorgan Chase, Wells Fargo, and Citigroup, will commence reporting their second-quarter results on July 14. Heading into the earnings season for the second quarter, banks are faced with low expectations as earnings have yet to make a significant recovery since the eruption of the regional banking crisis in March. The prevailing market sentiment towards bank stocks is excessively negative, but robust net interest income will likely surprise investors and offset the weakness in capital markets.US banking stocks have been among the best-performing sectors in the past week, indicating that investors may be positioning themselves for a positive earnings and outlook surprise from US banks. The future performance of US banks largely depends on whether the U.S. economy e
【Options Strategy】Q2 Earnings season outlook for U.S. banks
Hi, all. I’m back with my simulations trade.Today my trade is Short $NVIDIA Corp(NVDA)$’s Call with strike price of $133, expiring on this Friday.This trade means I think NVIDIA won’t rise to $133 this Friday.But the risk of short call is very risky. You can buy 100 shares of Nvidia. 100 shares and the short call will combine a Covered Call.Here is the process: find options and then click demo sell.Btw, last short call I share expired on last Friday. That’s the advantage of acting as the seller of options: profiting from the time decay.But remember, do covered calls.Welcome to follow my demo account trading and win tiger coins!
0DTE Battling With Long-Dated Options in Trendless Stock Market
A year after being shaken awake by an ultra-aggressive Federal Reserve, the stock market has gone back to sleep. Analysts trying to explain how it happened say dynamics in derivatives trading may be playing a role.While cooling inflation and better-than-feared earnings have helped promote calm in a market less vulnerable to valuation shocks after last year’s declines, fresh research is being published almost daily into how newly popular varieties of stock options act as forces for and against equity volatility.The latest to weigh in are strategists at JPMorgan Chase & Co., who argue that the interplay of zero-day stock options — fast-expiring contracts whose use exploded in the last year — and more conventional longer-dated ones is combining to dampen big and decisive moves in the broa
Implied volatility on Nvidia options expiring this week is as high as 124%
Artificial intelligence (AI) chip leader Nvidia $NVIDIA Corp(NVDA)$ will report second-quarter earnings after the U.S. stock market on Wednesday (23), and investors expect Nvidia's revenue in the quarter to beat expectations, and shares rose 5% on Monday.Wall Street expects Nvidia's revenue to grow about 110 percent to $12.5 billion in the current quarter, according to Refinitiv data. Nvidia has missed earnings estimates only once in the past two years. Citigroup analysts last week estimated Nvidia's revenue for the current quarter at only about $12 billion, but brokerages expect that to rise to $14 billion.After Nvidia estimated second-quarter revenue growth of more than 50 percent in May this year, its 12-month forward PE surged to more than 80
Implied volatility on Nvidia options expiring this week is as high as 124%
FOMC collision Quadruple Witching, this strike price will become the week's closing price threshold
Since the November FOMC meeting, market expectations for future rate hikes have changed slightly, as shown in the table below, from the day after the last FOMC meeting to the end of last week:Notable changes include:Modest expectations for a 25 basis point rate hike by January (32.5 per cent) have shifted to slightly narrower expectations for a rate cut (4.8 per cent).The rate cut was not fully priced in until July.Market expectations for a rate hike in March have shifted from 11.7 per cent to 49.4 per cent.Interest rate expectations fell 25 basis points in December to 4.334% from 4.543%. In other words, there will be one rate cut in 2024.The chart below shows the pace of the current quantitative tightening (QT) of the Fed's balance sheet. The latter table shows the SPX's reaction to recen
FOMC collision Quadruple Witching, this strike price will become the week's closing price threshold
[Options Strategy] Is Apple worth buying ahead of earnings?
Options show that the market has high expectations for AppleApple $Apple(AAPL)$ , which reports on Nov. 2, is expected to report revenue of $8.931 billion, up from $8.18 billion in the previous quarter, and earnings per share are expected to be $1.39. That's up from $1.26 in the previous quarter.Because Apple has met or exceeded revenue and earnings per share expectations in three of the last four quarters, coupled with the iPhone 15 release, the market's expectations for this earnings report are higher.While Apple shares are well off their highs for the year, the stock is still up more than 30% this year. The 2023 Apple price opened at $130.28 and has been steadily rising for most of the year, peaking at $198.23 on July 19. But it is currently tr
[Options Strategy] Is Apple worth buying ahead of earnings?
Hi, all. I’m back with my simulations trade.Today my trade is Short $NVIDIA Corp(NVDA)$’s Call with strike price of $1270, expiring on 7th June.This trade means I think NVIDIA won’t rise to $1270 on the day of stock split.But the risk of short call is very risky. You can try it in demo account.Here is the process: find options and then click demo sell.You are welcome to post your demo account trade in this topic and win tiger coins!!!Happy investing and have a good weekend~~~😺
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