Daily Options Report

Well, another thrombolic expiration move!

Truth be told, expirations are not as volatile as we think. What does happen though is a move in motion can compound upon itself as options shorts will literally no options premium cushion left get forced to chase to defend positions. This of course adds on to a move in progress and forces the next guy to chase. And so on.

But here's a thought. What if these Weekly options start to take off? Will this forever change the nature of expiration? Will...

Yes, no more dropped call issues with this new, state-of-the-art antenna.

OK, apologies for channeling my inner Jim Goldman, but Antenna-Gate is quite possibly the most ridiculous scandal ever. Not to mention, you can't even *fade* hysteria, it's the strongest name out there. I did actually use weekly options in here, rolled out an expiring July position to next week (long stock, long OTM puts, short OTM calls). Rooting for either a really bad earnings reaction or a modestly good one.

So I got mentioned in some Finance Twitter Spotlight yesterday.

Adam Warner

@agwarner

Adam Warner is an author and proprietary option trader with Addormar Co, Inc. He traded as a member of the American Stock Exchange from 1988-2001.

Sample Tweet: "markets pretty wide in $VVUS, I like the long $call spread idea with perhaps selling additional higher strike, but huge slippage if legging."

And despite that wisdom,  I've picked up twitter followers in the last day! Another horrendous idea...

"Is the VIX safe?"

"Yes yes, it's very safe".

Actually not even sure what that means. Been posting, reading posts, and emailing about the VIX futures last couple days. At the end of the day, no one "knows" what's going to happen, including the collective wisdom of VIX futures and options traders. In 2008, VIX obviously mertited it's premium above realized volatility, and the upsloping VIX futures curve was *right*. In 2009 it was wrong. In fact it stayed wrong for the most part until May...

Seems like years ago Larissa Riquelme promised to run through the streets of Asuncion with a mere coat of body paint if beloved Paraguay won the World Cup.

Well unfortunately by the time we figured out how to find Paraguay on a map, they lost.

But alas, Larissa has moved on.....to a photo shoot in Brazil.

Anyway, wrote this up for Investor Place the other day regarding the simultaneous Fear and Complacency in the VIX. Well, the Fear part has taken over since then, but the futures premiums are...

OK, I do find Bloomberg 1000x better than CNBC, but maybe not so much today. They broke the cosmic news earlier that An Apple Engineer Told Jobs About the Apple Antenna!

Oh. My. Gawd.

Actually that's not what's annoying, it's that they keep telling me about the selloff in Apple, as if their breaking news has battered the shares

As I type it's down 1.42%. SPY is down .82%. I imagine that's hardly exceptional (in fact it sounds low). The Russell is down 1.52%, so Apple really not doing so bad.

So I went over to RM yesterday to see if Cramer's Pretend Wednesday Expiration Look had returned. It hadn't. But did catch this in Columnist Conversation from Not Cramer.

Traders are buing some volatility seemingly on release of the FOMC minutes. But, Elliott Wave analysis allowed us to talk about this buying opportunity yesterday morning's Columnist Conversation: "...we should watch for VIX to bottom and move higher, sending the stock market indices lower. The iPath S&P VIX (VXX), the...

This is just awesome news.

'Beavis and Butt-head" -- the show that celebrated the slacker way of life and helped make MTV into a network that did more than just play music videos -- is coming back.

The move to resurrect the hugely popular 1990s animated anti-heroes has been rumored for several days. But yesterday, sources at MTV confirmed that a new batch of "Beavis and Butt-head" episodes are in the works.

The new series would keep Beavis and Butt-head in their perpetual high-school...

And a happy Bastille Day to All!

MKM Partners takes a look at the steep VIX that we're all yapping about

Although spot VIX has declined sharply over the last couple of weeks to close at 24.56 yesterday, its low since mid-June, longer- dated maturities have barely budged. This upward-sloping volatility term structure is approaching its steepest level in recent years (measured between spot VIX and the six- month future), likely reflecting imbedded skepticism in the aftermath of the May 20...

Well, strange day in VIX on Monday. We normally see an illusion of strength on Monday's as calender catches up the weekend options pre-sale. Yet VIX acted oddly weak, and (at least in the morning) out of line with VXO, VIX futures, and VXX.

Tuesday saw the action in the chart here (the time stamping didn't show up, but that's basically the day.

The market was strong all day, so one would normally expect a gradual VIX drift. Yet it opened low and by and large worked higher. Included was an...

OK, the VIX is 20% below it's 10 Day SMA. The RSI(2) is under 1.

Call me crazy, but it feels a bit extended here. Not saying the VIX really merits much higher prices given the recent market action, just that it sure looks like time for a pause at the very least.

Again, the oversold VIX provides a lousy signal if it's going with prevailing trend. So if in fact we've officially bottomed and turned, you want to start looking for the VIX to get overbought, not oversold. I tend to think this is a...

I remember reading that Steinbrenner actually filmed some scenes for Seinfeld that never made it into the George-Susan wedding episode. Never knew they actually saw the light of Youtube. Pretty good stuff, too bad it didn't run.

OK, it's offically getting ridiculous, the VIX futures premiums.

October is roughly 3 month's (and change) away, and the VIX futures are roughly $8 Nov even higher than that.

Pretty clearly Mr. Market expects a volatility pause this summer, followed by a return to Excitement this Fall. That's normally a safe assumption as summer is the lowest vol. time of year. What stands out now though are two things.

One is the magnitude of the expected volatility pop. 3-4 points I could easily see. But 8...

Well, it's official, Paul the Octopus has decided to cash in his fame. In an interview with Jim Gray last night on ESPN, here's what he had to say.

"I'm going to take my talent to South Beath, the Miami Seaquarium".

Yes folks, in a deal apparently sealed in Beijing in 2008, Paul plans to join his BFF's Larry the Squid and Mike the Manatee down in South Florida. Pat Riley has even announced he will come out of retirement to take credit for any picks they make.

Believe it or not, Paul...

Two of my favorite numbers guys looking for a down day today. This, from Market Tells (sub required).

Jason Goepfert from SentimenTrader shared the following seasonal pattern via twitter Friday… when S&P futures have gained 0.5% on the last three days of a week, the first day of the following week has been down 74% of the time, averaging a loss of 0.7%.

.....Out of 29 occurrences since 1990, the S&P closed lower the next day 23 times, or 79% of the time. That’s a significant downside edge...