CBOE adds more weekly options—and drops a few

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Looking at the 30-July version of  AVAILABLE WEEKLIES spreadsheet on CBOE’s weekly page shows that next week adds some interesting options (USO, CSCO, DNDN, GE) , and drops some that were offered the week before (ABX, POT, XOM).   Evidently the clever folks at CBOE are adding options for some stocks just for the week when they are reporting earnings.   I suspect that USO, …

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Recap on SPY weeklies —and some observations

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After creating a position with SPY on Wednesday at 111.07  I added to my covered calls on Thursday, buying SPY at 110.12, selling 110 strike calls  at 0.71.   At one point this morning (Friday) , when SPY was off to about 109.5 my 111 strike calls had dropped from Wednesday’s 0.83 to 0.08.   These strong moves are characteristic of options with only a …

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Crossover

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For the first time since late May the 2010 price of SPY has risen above the 2004 price for the same day.    Not much else to say except this latest rally does offer a little hope that we aren’t riding a bear trend into a double dip.

More SPY weeklies while Schwab plays catch-up

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Update 3-Feb-2011:  Schwab recently added weekly  and quarterly option support to all their trading platforms.  See here for more information. Update:  In March 2011 Schwab plans to introduce StreetSmart Edge™, their new flagship trading platform.   Among other things this platform will include, “Major options trading improvements, including the ability to trade weekly and quarterly options.” When SPY dropped to 111 this morning I started …

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Predicting the future: 27-July-2010

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I am an engineer by training.   It is in my blood to try to engineer a investment solution that gives good upside performance while structurally limiting risk to reasonable levels (e.g., no greater than the upside opportunity).   A few years ago I concluded that I had not figured out a way to do this, and that it is probably impossible.

For example highly rated bonds, usually not considered the riskiest of investments, are sensitive to prevailing interest rates.  AGG, a bond ETF is currently yielding around 3.7% annualized interest.  Its duration, a term that defines the average time until maturity for the bonds in the fund is around 4.    The duration metric quantifies how sensitive a bond investment is to interest rate fluctuations.

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