Option Block 571: TSLA Puts and Election Volatility

Published: Nov. 8, 2016, 6:21 p.m.

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Trading Block: Dow soars 300 points after FBI clears Clinton again. Are certain volatility funds raising election risk for the stock market? Earnings today after the bell

  • Fogo de Chao
  • Hertz Global Holdings
  • Marriott International - ATM Straddle = $2.75, approx. 4%
  • The Priceline Group - ATM Straddle = $82, approx. 5.5%

Odd Block: Calls trade in SPDR KBW Bank ETF (KBE), calls and puts trade in iShares MSCI Mexico Fund (EWW) and puts trade in Marathon Oil Company (MRO)

Mail Block/Options #QuestionOfTheWeek:

$SPX Weds Weekly straddle says 2% move through election. How much will SPX / $SPY move through Weds 11/9?

  • Over 3% - crazy move
  • Between 2-3% - big move
  • Between 1-2% - mild move
  • Less than 1% - "meh"

Listener questions:

  • Question from RKintz - What do you guys think of out of the money puts on PBR? I noticed heavy buying across several expiries the last few weeks (possibly speculation of prolonged glut in oil supply)
  • Question from Real RK - What do you guys think of being long a little less than one standard deviation puts OTM for Jan in everyones favorite hyperbolic name Tesla?

Around the Block/Earning Highlights This Week:

  • Tuesday - Valeant, CVS Health
  • Wednesday - Valeant, Mylan, Shake Shack, Macys
  • Thursday - The Walt Disney Company, Nvidia, Kohls, Nordstrom
  • Friday - JCPenney
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