PennyStockPayCheck.com Rss

Featured Posts

Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

Read more

Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

Read more

Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

Read more

Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

Read more

UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

Read more

Opinion: Why aren’t investors scared?

Category : Business, Stocks

Fear & Greed showing extreme greed, the VIX is at a 52-week low but there are still problems in Washington and it’s not like the economy is going gangbusters.

Continue reading here: Opinion: Why aren’t investors scared?

Post to Twitter

TLT-VIX: Relation to the Overall Market

Category : Business

This complimentary article from Options Profits was originally published on May 29. Don’t risk missing over 40 options trade ideas every week, educational content, exclusive commentary and webinars from over 15 experts. Click here for more information and a 14-Day Free Trial.

There has obviously been a decent amount of worry about what’s going on in Europe. If not for our friends across the pond, I think the S&P fundamentally should be trading above 1400 and the market should be creeping higher not lower. That said, for the S&Ps to still be up on the year while Europe gets slaughtered is somewhat impressive. Maybe the market is in better shape than we think and a rally is at hand? Looking at the stock market and ignoring bonds to determine the health of U.S. markets is a bit like buying a car based on looks alone. If the stock market is the U.S. exterior, the bond markets are the engine that really makes the markets work. Take a look at this chart. If one were to quickly glance at it, they would think it was CBOE Volatility Index (VIX), since it peaks every time the market drops and craters at market highs.

It is not VIX, it is a 10-year weekly chart of iShares Barclays 20+ Yr Treas.Bond (TLT) through October 31 of last year, the TLT is the ETF that represents long term US debt (more than 20 years to expire). I illustrate this point to show how VIX and bonds are similar instruments. They are both what I would classify as insurance vehicles. The VIX represents that cost of insurance via S&P options, while the bonds are a safe haven investment for banks and funds. If we zoom in from 2007-October 31 2011, you can see how similar they in movement. What the trader will notice is that typically the VIX moves sooner and in greater magnitude….

Click to view a price quote on TLT.

Click to research the Financial Services industry.

Read more here: TLT-VIX: Relation to the Overall Market

Post to Twitter

CBOE Special Feature: VXN Futures Debuting Today

Category : Stocks

This complimentary article from Options Profits was originally published on May 23. Don’t risk missing over 40 options trade ideas every week, educational content, exclusive commentary and webinars from over 15 experts. Click here for more information and a 14-Day Free Trial. Russell Rhoads is an instructor with The Options Institute at the Chicago Board Options Exchange. He is a financial author and editor having contributed to multiple magazines and edited several books for Wiley publishing. In 2008 he wrote Candlestick Charting For Dummies and is the author of Option Spread Trading: A Comprehensive Guide to Strategies and Tactics. Russell also wrote Trading VIX Derivatives: Trading and Hedging Strategies using VIX Futures, Options and Exchange-Traded Notes. In addition to his duties for the CBOE, he instructs a graduate level options course at the University of Illinois – Chicago and acts as an instructor for the Options Industry Council. Russell: Today the CBOE Futures Exchange, LLC (CFE) will launch trading on CBOE NASDAQ-100 Volatility Index(SM) (VXN(SM)) futures contracts. VXN is a key measure of market expectations of near-term volatility conveyed by NASDAQ-100 Index (NDX) option pricing. The structure of the futures contracts is the same as those on the widely followed CBOE Volatility Index (VIX). Initially there will be only four consecutive monthly contracts listed which differs from VIX futures which have contracts with expirations trading for the next nine months. The NASDAQ-100 Index is an index that tracks the most active domestic non-financial stocks trading on the NASDAQ Stock Market based on capitalization. The NDX is often considered an indication of the performance of technology stocks as about 2/3 the composition of the index is technology related companies. The table below shows the biggest stocks in the NDX. These 10 names represent well over 50% of the capitalization of the NDX.

Since the VXN is derived from NDX option pricing the relationship between NDX and VXN is worth exploring. There is daily closing pricing for the VXN available for several years on the CBOE’s website. Using this data I took a look at how the VXN trades relative to NDX and VIX. The results were a bit interesting and may be a good guide to a basis for trading VXN futures. As expected the relationship between the NDX and VXN is similar to the relationship between the S&P 500 and VIX. That is there is a distinct inverse relationship between the two. The chart below shows the NDX versus the VXN for 12 months leading up to the end of April 2012. The inverse relationship that appears in this chart is pretty typical of the relationship between NDX and VXN over any time period.

Comparing the daily changes of NDX and VXN from January 1, 2004 through April 30, 2012 results in a correlation of -0.73198, which is very close to that of the SPX and VIX. The correlation for this time period for the SPX and VIX is -0.75335. Many traders consider VIX futures a proxy for trading an outlook for the overall stock market. VXN futures should be considered a tool to trade an outlook for the NDX index, much like VIX futures may be used when traders have an outlook for the S&P 500. As a bit of caution — VIX futures move in the same direction as the underlying index, but often do not move with the same price magnitude. As a prime example of this sort of price action, check out these mid-day quotes of the VIX index and the first four trading months from mid-day on Tuesday May 22. The VIX is down 0.75 on the day and each of the next four futures contracts is down as well. However, the contracts are down less than the spot VIX. This trading behavior for VIX futures is typical when the VIX index moves higher or lower up and down and is unique to VIX futures trading. Although just listed, VXN futures may trade in this manner as well. Of course, time will tell….

Click to view a price quote on VIX.

Follow this link: CBOE Special Feature: VXN Futures Debuting Today

Post to Twitter

REPLAY LINK: Volatility Skew and its Impact to Options Trading

Category : Business

This complimentary webinar from Options Profits was originally presented on April 12. Don’t risk missing over 40 options trade ideas every week, exclusive commentary and educational content from over 15 experts. Click here for more information and a 14-Day Free Trial.

Many thanks to our live participants! It was an exciting, interactive presentation. Jared and I enjoyed spending time with our readers and look forward to “seeing” everyone online on Options Profits. **The reason you should care deeply about levels of volatility skew is that it can make or break your portfolio. Learn how to analyze skew to determine if there is an opportunity for portfolio hedging or a speculative trade**

CLICK HERE for the replay of Volatility Skew webinar….

Click to view a price quote on VIX.

Original post: REPLAY LINK: Volatility Skew and its Impact to Options Trading

Post to Twitter

Options Trading: Where’s the Volatility?

Category : Business

NEW YORK (Top Gun Options) — It has been an interesting week to say the least. After the release of the FOMC minutes from their last meeting, traders were shocked when it appeared that there would be no QE III.

At Top Gun Options, we believe the market is apparently suffering from short-term memory loss. Fed Chairman Bernanke did not say there would be another round of QE when he testified in front of Congress last month. The market feigned shocked, pulled back, volatility rose, and then…nothing. The market resumed its upward trajectory guided by the “invisible hand of the Fed.”

So it’s almost comical that the market has reacted to the “news” this week that the bartender has finally said “Last call!” Apparently they did not hear him the first time he said it, didn’t believe him, or are now starting to feel the effects of a hangover. Welcome to the way “smart people” trade in this market. As a former retail trader, I know this can be extremely frustrating — it’s counter-intuitive. Or not….

Read more: Options Trading: Where’s the Volatility?

Post to Twitter

Dion’s ETF Winners and Losers: VXX, FBT

Category : Business

NEW YORK (TheStreet) — Welcome to Don Dion’s “ETF Winners and Losers.” Be sure to stop by throughout the week to find out which ETFs are gaining or losing.

Winners

iPath S&P 500 VIX Short Term Futures ETN 9.2%

As major U.S. stock market indices waver, the fear index is finding some strength. Over the past two days, the VIX has managed to recoup losses and power back to March highs. It will be interesting to see if VXX can head higher in the days ahead. The fund continues to trade around all-time lows.

First Trust NYSE Arca Biotech Index Fund 1.4%…

Click to view a price quote on FBT.

Click to research the Financial Services industry.

Read more from the original source: Dion’s ETF Winners and Losers: VXX, FBT

Post to Twitter

Free Webinar: SPX and Correlation Review

Category : Stocks

During this presentation we will briefly review options strategies unique to a market outlook and methods of using different instruments to hedge market risk, including the CBOE S&P 500 Implied Correlation Index (ICJ). When: Thursday, March 15Time: 6pm ET (5pm CT)CLICK HERE for the LINK to the webinar: You will be able to pre-register but the presentation WILL NOT be live until 15 minutes before the webinar. You will be required to provide your name, email address and phone number to gain access to the presentation. Course material and replay link will be made available Monday, March 19.**This presentation will be especially helpful to those of you joining our full-day course (click on link for complete details), Professional Approach to Trading SPX. Concepts for the course will focus on speculating on market direction, hedging a portfolio,

Post to Twitter

Dion’s Friday ETF Winners and Losers

Category : Stocks

NEW YORK (TheStreet) — Welcome to Don Dion’s “ETF Winners and Losers.” Be sure to stop by throughout the week to find out which ETFs are gaining or losing.

Winners

iPath S&P 500 VIX Short Term Futures ETN 8.0%

After three days of gains, the fear-tracking VIX index took off at the end of the week as concerns began to resurface regarding in the ongoing Greece debt saga. VXX has relished in the market’s weakness, recovering all of its February losses.

Click to view a price quote on VXX.

Click to research the Financial Services industry.

Read the original here: Dion’s Friday ETF Winners and Losers

Post to Twitter

Volatility Trends

Category : Business

This complimentary article from Options Profits was originally published on February 6 at 10:24am EST. Don’t risk missing over 40 options trade ideas every week and exclusive commentary from over 10 experts. Click here for more information and a 14-Day Free Trial.

Believe it or not Friday was the fourth most volatile day of the year so far. That is incredible considering Friday’s total range was only 19 points. While we have had a lot of doubters, the speed at which we have crept up makes me far less suspect of this rally than some of the ones from September and October. In 23 trading days, the market has rallied about 100 points, a little more than four points a day. There are snails that move quicker.There are traders that complain about volume and continued fears. And others that complain about the spread between the CBOE Volatility Index (VIX) and realized volatility, and they have a point. There is something a little creepy about a realized volatility of eight and a VIX of 19. That should cause alarm and has been raising red flags for some time. I actually think we may have gotten the markets answer on Friday. Interestingly, I think the VIX and movement are finally starting to meet in a middle ground. If the SPX is moving 1% a day, that would be an annualized volatility of about 15.87%. If we add in 2% for market volatility risk premium that would peg the VIX at about 17.5-18%. On Friday the market moved 1.4%, the first time in the year (sans January 1) that the market outpaced option premiums. Considering the market outpaced the VIX on a rally and NOT on a sell off is, to me, a very bullish sign. Moving on to the volatility complex, another bullish sign for the market is the VIX complex itself. Right now VIX futures are in some of the steepest contango we have seen. While contango is seen by the outside observer as ominous, to me it represents something simple, the term of fear. All futures are saying right now is fear in the immediate is not high because of longer-term uncertainty fear is higher in the out months. There are those that will point toward contango pointing toward dates and events, I could not disagree more. The VIX futures are in contango about 80% of the time. If I walk down the street saying ‘a car accident is about to happen’ whenever I am outside, and then one time I say it and a car accident happens right in front of me, does this make me predictive? The answer is now, and I think the VIX futures are much the same way. Movement in contango and in structure is far more predictive than the VIX futures prices themselves. Just as VIX correlation is far more predictive than the VIX cash. Those looking for predictive pricing will find themselves a lot more luck looking at SPX options. Moving on to the VIX ETPs, the steep contango is putting HUGE pressure on iPath S&P 500 VIX Short-Term Futures ETN (VXX) and to a lesser extent iPath S&P 500 Mid-term Futures ETN (VXZ). At this point I am starting to look at VXZ as a better short than VXX, although I am not quite there yet. I’ll have something later today. We will hold VelocityShares Daily Inverse VIX Short Term ETN (XIV) until VIX futures start to flatten up. OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits. Mark can be followed on Twitter at twitter.com/OptionPit.

Click to view a price quote on VIX.

Originally posted here: Volatility Trends

Post to Twitter