TRADING BLOCK

VIX : 12.70 - 0.6-points lower than last show.

Most active indices: VIX: 125k, SPY: 713k, SPX: 272k

Most active equity options: DIS, BAC, TSLA, AAPL, AMD, BABA, GE, NVDA, NFLX, WFC

Earnings Highlights:

Netflix (NFLX)

Walt Disney Company (DIS)

 

 

 

ODD BLOCK

Mystery put update in Tesla Inc (TSLA)

 

 

 

STRATEGY BLOCK

This week’s topic discusses applying technical analysis to option trading.

 

 

 

MAIL BLOCK

Question from Douglas Tilley - Hello!--Regarding long stock substitution:

1. With call options, are deltas additive?  ie. why are (2) 40-delta calls so much cheaper than (1) 80-delta call ?  This seems like buying equivalent total delta for about half the cost.

2. For more accurate stock substitution, do you ever use the technique of buying an ATM call while selling an ATM put ? (vs. buying calls for a desired total delta).

What are the pros and cons (or nuances) of the 2 methods?  I do notice that the 2nd method definitely requires more buying power, due to the short put. Thanks for all the education

 

 

 

AROUND THE BLOCK

This Week in the Market:

Apr 16 - Industrial Production

Apr 17 - International Trade, Beige Book

Apr 18 - Jobless Claims, Retail Sales, Business Inventories

Apr 19 - Housing Starts