Podcasts Business The Option Block Option Block 272: Presidential Rope-A-Dope, or Bags of Money

Option Block 272: Presidential Rope-A-Dope, or Bags of Money

Published: Aug. 30, 2013, 5:09 p.m.

b'

Option Block 272: Presidential Rope-A-Dope, or Bags of Money

\\n

Trading Block:\\xa0 Labor Day weekend is nearly upon us. VIX cash above the 16-handle. Jobless claims are down, as expected. \\xa0 HFT and algos appear to have had a negligible impact on the vol of major futures contracts.

\\n

Odd Block:\\xa0 Puts trade in Garmin ltd. (GRMN) Calls buyers in Taiwan Semiconductor Mfg. (TSM).

\\n

Mail Block:\\xa0

\\n
    \\n
  • Question from Mike - I have been watching Dollar General for a while. What do you mean by the seller could be using an up-tick in volatility going into earnings for a better sale?
    • \\n
  • Question from Tim C. -\\xa0Is it true if I sell a time spread that OX will margin me as if I am naked short the longer-term option? If so I do not understand that? Why wouldn\\u2019t they treat it like a spread until the nearer-term option expires?
    • \\n
  • Question from Avega - Why would I ever trade a back spread? Why waste money on a reverse ratio - say 3x2. Then I am just net long one contract - can I just save money and buy the one?
    • \\n
\\n

\\n

Around the Block: Watch out for the weekend risk! Perhaps scoop some cheap premium on friday. Syrian developments?

'