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Schwab Websites Taken Down April 23, 2013—Denial of Service Attack

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Originally posted April 23, 2013 Around 3:40 ET I noticed that Schwab’s web presence was completely gone.  StreetSmart Edge servers were not available, and www.Schwab.com was nowhere to be found.   Signing onto Schwab later there was the following message: ………………………………………………………………………………………………… A Message From Schwab APRIL 23, 2013 — Shortly before the stock market closed today, we experienced an exceptionally high volume of website traffic which …

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How Does VXX Work?

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Update 17-December-2022 Effective 26 September 2022, Barclays resumed share creations on VXX. This closed out a grim period, starting on 14-Mar-2022 when Barclays suspended share creations of VXX due to an administrative screw-up. Since the suspension, VXX has traded at premiums as high as 52% over its IV price. This premium over the IV price can develop because share creations are a key process required …

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VIX Futures—Crystal Ball or Insurance Policy?

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Many people seem to believe that the CBOE’s VIX Futures market is attempting to predict upcoming CBOE VIX® values.  I think they are mistaken.  Most futures prices have very little to do with predicting the future. Futures contracts were invented to allow producers/consumer of commodities to limit their business risk by locking in future prices.  In exchange for eliminating price risk, they give up the potential for increased …

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Iron Condor on Herbalife

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The price of Herbalife ($HLF) has been relatively stable the last couple of weeks with the Icahn / Ackman tug-o-war in a tense tie.   The historical volatility has been running around 26, but the IVs on the weekly options are relatively rich with the average running around 50.    Currently a 35.5/37/39/40.5 iron condor is offering a .575 credit (midpoint) for the 12-April-13 options. …

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When the Term Structure Chart Lies to You…

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Update:  VIXCentral has enhanced their historical term structure graphs to use days to expiration rather than months for the time axis of the charts.  This change eliminates the distortions that I wrote about in the post.  VIXCentral’s historical charts now look a lot like the Excel charts that I generated for this post. Term structure graphs, like the VIX® future charts on VIXCentral.com are very …

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