The tastytrade network

We're back with another week of great content! To start it off, we answer some questions to clarify probability of profit and explain how it is different from percent of max profit. Then, we discuss 1 standard deviation moves with TP, and how to roll a strangle. Finally, a viewer asks about earnings straddles vs. strangles.

tastytrade LIVE - October 6, 2014

tastytrade en Español - October 3, 2014 - Retorno Total Del Portfolio

Vonetta from the tastytrade network takes a look at H1B visa process for "high-skilled" workers. Tech companies want unlimited access to foreign workers, Americans want jobs in an emerging field, and universities want to remain attractive to foreign students. Who's got skills? Let's find out.

Vonetta from the tastytrade network takes a look at H1B visa process for "high-skilled" workers. Tech companies want unlimited access to foreign workers, Americans want jobs in an emerging field, and universities want to remain attractive to foreign students. Who's got skills? Let's find out.

The research team shares some updates for next week's content. A rising star visits the show on Monday, and there is a study comparing iron flies to straddles in high IV. Also, we'll take an interesting look at selling premium in indices using stocks correlated with each index. See you next week!

TP and Tony wrap up the day with a fun game! First, Tony asks about volatility and why moves have been outside of IV lately. Then, TP explains why he is hesitant to get long volatility. Finally, Tony takes a probability quiz, comparing market and sports probabilities. Find out the odds of the Blackhawks winning the Stanley Cup!

ShadowTrader Uncovered - October 3, 2014 - The Market Gives You What You Need to Know

Ask SLM - October 3, 2014

Today's Sale Of The Century is a Poor Man's Covered Put in TLT. Liz & Jenny are bearish on the underlying, and like the low IV. IV Rank is high, but the overall IV is still low. They compare the potential return on capital to just selling a call, and find that the PMCP yields a much better result. They buy the 122 JAN15 put and sell the NOV14 115 put to set up the trade. All of their trades on Sale Of The Century have been winners up to this point, so let's see if they can continue the trend!

The LIZ & JNY Show - October 3, 2014

Katie's account isn't looking so pretty today, but the team is determined to carry on business as usual and stay mechanical. In FXE, despite a low monthly volatility, there was a large price move, which has caused a spike in IV Rank. Looking to up her trade occurrences, Katie shorts a skewed bullish strangle. They short the ATM Put, and short a further out of the money call, leaving her break even to the upside further than one standard deviation away. This way, Katie could be directionally wrong but still book a winning trade pending IV contraction. Then, the pair re-cap their X Strangle that has tested them constantly in past days. They walk through the price changes, delta hedging and rolling possibilities should the price of X stay between her short strikes closer to expiration.

Katie's account isn't looking so pretty today, but the team is determined to carry on business as usual and stay mechanical. In FXE, despite a low monthly volatility, there was a large price move, which has caused a spike in IV Rank. Looking to up her trade occurrences, Katie shorts a skewed bullish strangle. They short the ATM Put, and short a further out of the money call, leaving her break even to the upside further than one standard deviation away. This way, Katie could be directionally wrong but still book a winning trade pending IV contraction. Then, the pair re-cap their X Strangle that has tested them constantly in past days. They walk through the price changes, delta hedging and rolling possibilities should the price of X stay between her short strikes closer to expiration.

Michelle Thompson is the Director of swap.com. They are the largest online consignment site for kids in the country, with most items under $10. Starting from a team of 2 that processed, packed, and shipped all orders themselves, they have now expanded to over 40 employees. All items on site are in stock and are shipped immediately.

In recent years, it has become increasingly common to consider volatility as its own asset class. With this progression, many different volatility products have been invented and are now available to trade. Tom Sosnoff and Tony Battista are joined by Investools educator, Dave Johnson, to discuss the VIX, VIX options, VIX futures, VXX, UVXY, SVXY and VXST. The VIX index gauges 30-day implied volatility in SPX and the options on the VIX allow investors to trade their volatility assumptions, whether it is to speculate or hedge portfolio positions. VIX futures also allow investors to take advantage of volatility assumptions except VIX futures are a much larger product in notional terms. This is because when trading one VIX options contract, one point is worth $100, while each point in a single VIX futures contract is worth $1,000. One important point of consideration when trading VIX futures is that there is a cost of carry associated with the product. This is because VIX futures are often in contango (longer-dated contracts trade at a premium to near-term contracts) and this results in an increase in cost-basis when rolling from one month to the next. VXX (ETN) and UVXY (ETF) both track the daily percent return of a portfolio comprised of the two front-month VIX futures contracts. UVXY is slightly different because it is 2x leveraged. This means that UVXY will return twice the percentage of VXX on a given day. Both of these products allow investors to gain exposure to volatility by utilizing the underlying stock or options. Of the two products, VXX is much more liquid, but Tom and Tony do consider both to be viable products. It's important to note that due to the daily rebalancing the VXX and UVXY fund administrators must do, these products have a negative drag (due to VIX futures being in contango a majority of the time). This means that over time, the products will drastically underperform the return of VIX futures. For this reason, these products are designed to be used on a short-term basis and not as a buy-and-hold trade. SVXY is a new ETF that operates in the same manner as VXX, the only difference is that this product moves inversely to VXX and volatility. When volatility increases, this product will decrease, and vice versa. SVXY stock and options are currently illiquid, so VXX remains the much better product to trade. The final volatility product discussed is VXST, the new short-term SPX implied volatility index. VXST is essentially the same thing as VIX, except it tracks the 9-day implied volatility as opposed to 30-day volatility tracked by the VIX index. VXST is fairly new, so the options are currently very illiquid. As of now, Tom, Tony and Dave agree that the best volatility products to utilize are VIX options, VIX futures, VXX and UVXY.