Option Block 695: Talking Trade Wars and SVXY Debacle

Published: March 2, 2018, 6:29 p.m.

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Trading Block: Trump\'s trade war is spooking the market. SPX off nearly 2%. VIX is back into the 20s. Equity Markets: It\'s worth noting that at a forward P/E ratio of just over 17x for the S&P 500, valuations do not appear to be stretched. The great SVXY debacle. The numbers are in for February, and they were good (surprise).

Odd Block: More Jan 2019 50 "Catastrophe" puts in Tesla Motors Inc. Puts roll in iShares S&P 500 Index Fund (XSP). Bullish call love in Salesforce (CRM).

Mail Block: Options question of the week.

There\'s much debate about SVXY these days. Will it survive 2018? Is it poised for serious upside? We\'ll table those questions for now and instead ask all of you out there slinging SVXY - what is your weapon of choice? Reply/DM with other suggestions.

  • 59% - Naked Long SVXY
  • 22% - Long SVXY Calls/Spreads
  • 10% - Long SVXY Puts/Spreads
  • 9% - Long SVXY w/ Put Hedge

Volatility FlashPoll. Three weeks ago out audience was evenly split on whether SVXY would survive 2018. But the recent changes to its investment objectives have us asking once more - Do you think SVXY will survive 2018?

  • 50% - Yes
  • 24% - No
  • 26% - I\'m done with inverse VIX
  • Comment from Matt Thompson - Everyone say thank you to ProShares for de-levering SVXY for a day like today.

Around the Block/Economic Reports:

  • Mar 1: Jobless Claims, Personal Income
  • Mar 2: Consumer Sentiment
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