JLN Options: How to play it: Options trades ahead of the Greek elections

Jun 7, 2012

Lead Stories How to play it: Options trades ahead of the Greek elections
Doris Frankel and David K. Randall, Reuters
Money managers and analysts are looking ahead to Greek parliamentary elections on June 17 that could decide whether the country continues austerity measures it agreed to as part of as an international bailout plan, or whether Greece takes a big step toward leaving the 17-member euro zone.
If Greece does exit the euro currency, Europe’s financial system may further weaken and lead to a freezing of global credit markets. Polls show that Greek voters are roughly split between the conservative, pro-bailout New Democracy party and the anti-bailout, leftist SYRIZA party.
http://jlne.ws/Lp1fU3
** Things are heating up in Greece.  Last night on live TV an MP for the far-right Golden Dawn party assaulted two female members of the leftist SYRIZA party (he threw water in the face of one and punched the other). -JB Was a China ETF Options Trader More than Lucky?
Steven M. Sears, Barron’s
Pure coincidence or inside information? One of those reasons explains how one investor knew to position bullishly in the options market one day before China’s central bank lowered interest rates for the first time since 2008.
http://jlne.ws/KjjJzG Wall Street Surges Amid Heightened Easing Optimism
Adam Samson, FOX Business
Wall Street rocketed to the upside on Wednesday in the best session for the broad S&P 500 since December as traders grew more hopeful that central bankers will take decisive action to buoy the world’s sputtering economy…
The Dow, which turned negative for the year last week, climbed back into the green. Meanwhile, volatility plunged 10.2% a tracked by the CBOE’s VIX.
http://jlne.ws/KlTQ4f Selling Options: Strategies and Results
All About Alpha
Recent research by the Asset Consulting Group indicates that the strategy of selling options for income may have some legs.
ACS, a St. Louis, MO based consultancy, compared the results since mid 1986 of four options-based benchmark indexes against the performance of the S&P 500, which for their purposes served as a token of more traditional indexes in general.
The four CBOE S&P options-based indexes surveyed all measured the performance of portfolios that sell one-month, cash-settled S&P index options: the BuyWrite Index (BXM), the OTM BuyWrite Index (BXY), the PutWrite Index (PUT) and the 95-110 Collar index (CLL).
http://jlne.ws/KAWDuL Enough With the Market Whiplash, Can’t We Just Have Balance?
Rick Pendergraft, InvestorPlace
The market is driving away investors due to the wild swings it is experiencing, but it’s investors who create the swings…
The CBOE Equity Put/Call ratio measures the number of calls and puts traded on individual stocks on a daily basis. This particular indicator can vacillate wildly from day to day, so I like to look at a 21-day moving average to smooth out the wild daily swings. The 21-day moving average for the ratio has climbed above 0.79 for the first time since last August. A high reading indicates that option traders are displaying bearish sentiment.
http://jlne.ws/MrbNgB

Exchanges

Exchanges Gather For Conference Amid Nasdaq Tumult
Jacob Bunge, The Wall Street Journal
Leaders of the world’s financial exchanges face investors in New York Thursday with a new game plan that reflects the sector’s diminished ambitions.Executives filing in to the annual CEO conference hosted by Sandler O’Neill & Partners are in a chastened mood. It’s been a year of deals that collapsed, technology that didn’t work, regulators that didn’t hit deadlines, investors who didn’t trade and, of course, the dark shadow of MF Global’s collapse.
http://jlne.ws/LfRJ36
**  The article notes that stock-options trading remains on an upswing. – JB NYSE Euronext May U.S. Equity Options Up 4.7% Year-over-year
RTTNews
NYSE Euronext (NYX) announced trading volumes for its global derivatives and cash equities exchanges for May 2012.
NYSE Euronext global derivatives ADV in May 2012 of 9.3 million contracts declined 11.9% versus May 2011, but rose 12.9% from April 2012 levels.
http://jlne.ws/MjJ6WJ

Strategies

Selling Options: Strategies and Results
All About Alpha
Recent research by the Asset Consulting Group indicates that the strategy of selling options for income may have some legs.
ACS, a St. Louis, MO based consultancy, compared the results since mid 1986 of four options-based benchmark indexes against the performance of the S&P 500, which for their purposes served as a token of more traditional indexes in general.
The four CBOE S&P options-based indexes surveyed all measured the performance of portfolios that sell one-month, cash-settled S&P index options: the BuyWrite Index (BXM), the OTM BuyWrite Index (BXY), the PutWrite Index (PUT) and the 95-110 Collar index (CLL).
http://jlne.ws/KAWDuL

Events

Introducing Complex Orders with Equity Leg and Expanded Risk Mitigation
NYSE Euronext’s Amy Farnstrom and Todd Wilemon will talk about upcoming enhancements to NYSE U.S. Options.  Listen as they explain Complex Orders with an Equity Leg and Expanded Risk Mitigation controls for both Orders and Quotes.
Date: June 7, 2012
Time: 4:30pm – 5:30pm ET / 3:30pm – 4:30pm CT
Register at: http://jlne.ws/JRc3Lu Opportunities in Options on NYSE Liffe US 33.2 oz. Mini Gold
A Market Maker’s Perspective
Join NYSE Liffe US and RTS Realtime Systems for an interactive discussion on opportunities in options. Trading examples will be drawn from options on mini gold and mini silver futures (OYG and OYI) that are listed on NYSE Liffe US, the US based futures exchange of NYSE Euronext. These are the only mini options on futures metals contracts listed in the US. The underlying futures contracts (YG and YI) are the most liquid mini metals contracts in the US.
Professional Trader and Market Maker Doug Wilbert will speak on:
–  Favored options strategies in quiet, volatile and trending markets
–  Limited risk options strategies that have provided him the greatest success over time
–  Answers to your questions about running a dynamic portfolio, managing margin efficiently, and more
Date: Wednesday, June 20
Time: 2pm Chicago, 3pm New York
Register at: http://jlne.ws/KRRbSp
CBOE Risk Management Conference
CBOE invites you to attend the debut of the Risk Management Conference in Europe.  Now in its 28th year in the US, the CBOE Risk Management Conference (RMC) is hosted by the Chicago Board Options Exchange (CBOE) and has proven to be a leading financial industry event in the US. September 5-7, 2012
The Ritz-Carlton Powerscourt,
Powerscourt Estate at Enniskerry
County Wicklow, Ireland
http://jlne.ws/LB8DYT

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