vxgog

VXGOG Setting Up a GOOG Straddle

Submitted by msebastian on Thu, 01/31/2013 - 5:16pm

VXGOG is the VIX of Google options.  It is an index of the volatility of google options with a constant duration of 30 days.  You have seen how we like looking at the VIX and overall volatility.  One of the great things about VXGOG is that it gives traders, that don't have LivevolX, a decent view of how Google options are pricing.  Today, VXGOG hit a 104 week low,  trading barely above 18%.

VXGOG.PNG

Livevol (R) www.livevol.com

A Look Back At GOOG

Submitted by msebastian on Thu, 09/20/2012 - 4:06pm

As I was sitting down to write the blog today, I have to be honest there were about 3 different things that I wanted to write about.  However, they are either in the Option Pit Strategy Letter, written for TheStreet.com Option Profits Team, or in the hopper on something I want to trade that I don't feel like giving away yet (If there is a trade idea we like, there is a delay between the blog and when we talk about it internally).  

Is there Any Vol To Sell?

Submitted by msebastian on Fri, 08/10/2012 - 5:55pm

As many of you option traders know, the VIX closed below 15 for the first time in some time.  While I think the VIX is getting pretty cheap, when we look at all of the equity vol indexes, some equities look even cheaper.  There are few things to remember:

1.  While a 15 VIX might seem low after the last 4 years, it would have been above normal between 2004 and 2007.

2.  There are always things that are more cheaply priced.

3.  There may be trades that are more expensive in relative terms.

GOOG Earnings Over Reaction

Submitted by msebastian on Fri, 07/20/2012 - 8:53pm

Google taught my options mentoring students a nice lesson on getting long premium into earnings; it usually pays to play the day before earnings, not the day of.  Because the ATM straddle that was purchased on Wednesday was a huge winner, while the ATM straddle purchased yesterday was a loser.  Thankfully, most students actually had on the long calendar we looked at during the pit report, so they all came out ahead.

Typically, after earnings, we will see implied volatility come out of a stock's options.  This is because what was once unknown is now known.  When there is less uncertainty, there is less volatility.  And on Google’s move today, we can clearly see that volatility fell:

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