Unusual Activity in RIMM

Besides a slight scare from the Speaker of the House today, the market rallied in fine style.  It could not break out over 1422 on the SPX but most of the market did well.  Volatility did come down a touch too as the short end of the market started to catch up with what the longer end of the volatility market has been doing.  It looks like we are setting up for a rally to the end of the year as long as some sort of something comes out of Washington.  We would have a nice Hollywood moment if the politicians got it together before Christmas.  Wishful thinking anyway and I won’t bet too heavily on it.

Do Option Values Really Increase Into Earnings?

Heading into earnings season, I thought it might be interesting to talk about how options work into earnings.  In fact, one of the most misunderstood facets of options trading is earnings plays.  There is a major misconception of how options behave into earnings.  Most traders see a chart like this in RIMM and think the following:


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RIMM skew doing some funny things

Today was a day on Wall Street that was well, strange.  There was a nice little rally in the NASDAQ as it teetered near even most of the day and ended with a little move up.  For the most part the other indexes were lower including the VIX, as there was little good news to really lift things.  I think, at this point, the markets are at the end of cheap credit.  Negative interest rates for TIPS anyone?  That is not the kind of thing markets want to see.  There feels like there is some serious confusion as to what money managers will put money into.  Does anyone really want to buy an Italian Bond yielding 3.5 after the bond holders are about to take a haircut for Greece?  Governments need to start feeling the heat of higher interes

What is Up with RIMM Ahead of Earnings?

Of all the earnings plays our Options Mentoring Students like to get into, RIMM might be one of the most popular.

How Did RIMM Earnings Play Out in the Options

During the Mid-Day Pit Report the option mentoring students and I really broke down the paper flow in RIMM.  There was an order that seemed to

Breaking Down RIMM ahead of earnings, using Options

One of the things my option mentoring students are always asking me about is earnings plays.  Traders, it just so happens that I was a little lost about what to write about and RIMM earnings a

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