New Rules: NASDAQ Options Exchange (NasdaqBx) To PAY Takers…

Courtesy of Peter Chapman TRADERS Magazine interview with Nasdaq OMX EVP Eric Noll unveils a new tact in the ever-changing world of major exchange strategies to attract order flow. In this case, NasdaqBx is up-ending the current industry "make-take" fee model whereby exchanges pay rebates to market-makers who improve prevailing…Read More

8 June, 2012

In Volatile Markets, Pensions Rediscover Covered Call Options

by Rosalyn Retkwa Writing covered call options against a portfolio of stocks to get extra income and hedge against downside risk isn’t new — not to individual investors, who’ve been doing it for decades. But to pension fund managers, “historically, covered call writing programs have always been considered a marginal strategy,” says…Read More

4 June, 2012

AlphaClone ETF Invests In Hedge Fund Equity Positions

  The AlphaClone Alternative Alpha ETF (ALFA), which began trading on Thursday, will invest in disclosed equity positions held by established hedge fund managers—the first ETF to do so. The new ETF “seeks to capture alpha from these managers’ long positions while protecting against protracted market downturns through a dynamic…Read More

31 May, 2012

Black Swan ETFs Debut

by Michael Johnston on May 31, 2012 Innovation in the ETF industry has become standard over the past several years, with countless first-to-market products opening up new asset classes and strategies. And it turns out that the U.S. isn’t the only place where product development is going full throttle; our…Read More

31 May, 2012

The Pros and Cons of Options Exchange Proliferation ::…

Good op-ed courtesy of TabbForum re: debate about whether having yet more options exchanges makes sense, or is just plain silly. The Pros and Cons of Options Exchange Proliferation :: TabbFORUM - Where Capital Markets Speak.Read More

29 May, 2012

As Market Sagged in Q1, Many Hedge Funds Held…

  It is no secret hedge funds have been using exchange-traded funds (ETFs) to make directional bets on a broad market index or a specific industry group. They frequently buy "call" options or hedge with "put" options. Sometimes they hedge by shorting the funds outright. This said, one of the…Read More

23 May, 2012

What’s Next?..Options Trading On Facebook (FB)

Options on Facebook (NASDAQ: FB) will be available as early as May 29th. With volatile price action in FB after its IPO, traders will look to options strategies to profit In the next several months FB is going to face pressure to grow into its current 100 Billion dollar valuation.…Read More

18 May, 2012

Covered Call Portfolios-Lower Volatility, Better Performance

For those not aware, the bloom is off the rose right now as equity markets are on track to record the biggest string of down days in a long time.  With the media distracting every investor re: FB's IPO, the fact is, equities markets in general are confounding long-only fund…Read More

17 May, 2012

Institutional Investors Increase Use of ETFs, says Greenwich Associates

At first used by Institutional Investors for manager transitions, rebalancing and other tactics, fund managers strategic use of ETFs are on the rise, in particular to gain long-term exposure to desired asset classes, according to a freshly-published study by Greenwich Associates. In the hot-off-the press study, "57% of institutional ETF…Read More

17 May, 2012

UofMass Study: Option Collar Strategies Deliver Better Performance With…

As reported by Pension&Investments Magazine, a newly-published research report from the University of Massachussetts has found options-based collar strategies would have outperformed the market in most asset classes, while providing drastically reduced risk leading up to the 2008 financial crisis, AND as well, throughout the subsequent recovery. “The contagion across…Read More

4 May, 2012

UK’s Abydos Hedge Fund Using Options to Prepare for…

(Reuters) - Abydos Capital, a new hedge fund run by a former partner at one of London's most high-profile oil investors, is worried about a potential military strike against Iran and plans to use options to protect his portfolio. Jean-Louis Le Mee, Chief Investment Officer of Abydos, told Reuters he…Read More

27 April, 2012

Sponsors Scout Buying Options within SMAs

    A little-used and relatively obscure investing strategy – buying options within a separately managed account – has made a bit of a stir in recent months, with a spike in product development talks between asset managers and platform sponsors, mostly for the strategy’s potential to address advisor and…Read More

26 April, 2012

From Russia With Love: RSX Iron Condor

Courtesy of WCI top gun Matt Buckley..For those loving Russia, here's a market neutral thesis that capitalizes on volatility. "RSX Implied Volatility is overpriced relative to its forecast volatility of 5.24% over the trade period. We are looking for possible price movement but for it to stay within its $27.00…Read More

16 April, 2012

Covered Calls Vs. Selling Puts On The SPY

Courtesy of Seeking Alpha's "Reel Ken" We often hear about selling covered calls to generate additional income. We also hear about selling Puts to generate income. So the question becomes: Which is a better strategy? The first step in answering this question is to understand that, from a performance perspective,…Read More

10 April, 2012

Institutions Eye Options: Buy-Writes and Butterflies

Yes, the equities markets are on a roll; the bulls are boisterous, and the "buy and holders" are popping champagne corks. Given this scenario, who would even suggest the idea of a fiduciary fund manager employing option-based hedging strategies that can potentially cut into upside returns?? After all, even though…Read More

16 March, 2012

ETFs with Largest Exposure to AAPL: Should You Hedge?

Now that we've all forgotten the name of that former derivatives trader from Goldman who enjoyed his 15 minutes of "de-fame", we can now all re-focus on the brand that's causing people to line up once again for their latest product offering: Apple Inc. According to ETF Research Center, 91…Read More

16 March, 2012

Betting on Benchmarks : MDY + IJR Out-Performs SPY

Private investor and SeekingAlpha contributor Richard Bloch makes a noteworthy observation when suggesting that "MDY + IJR > SPY". Bloch's thesis is that investing in the S&P 1500, but without the top 500 would have produced noticeably better returns. In fact, Bloch's analysis includes not only a 10-yr look-back on…Read More

5 March, 2012

The Skew is The Clue: VIX Spread Widens

Even if the WSJ is a bit slow on the uptick re: noticing the recent anomaly in VIX skew volatility that we commented on last week, Chris Dieterich's WSJ weekend story, "Surge in FIX Futures Volumes Driven By Bigger Risk Appetites" makes note of the fact that last month's daily…Read More

5 March, 2012