Option Block 348: Rampant Insider Trading

The Trading Block: More of a micro, rather than a macro day today. Gold up on the day. Is VIX too low? Lululemon had a stealth rally last week. New Amazon Fire phone. Visa popped up the day.  A study by professors at NYU and McGill University in Montreal shows insider options trades precede about a fourth of US M&A deals.

Odd Block:Call sales trade in Verso Paper Corp. (VRS), and bullish risk reversal/Combos trade in Exterran Holdings Inc. (EXH)

Xpress Block: New premium harvesting tools now available in IdeaHub. New features for the Walk Limit. 

Mail Block: Listener Questions & Comments

Question from Shane Hamilton - Hey Mark, How about a new segment called the "Success Block" where listeners submit winning trades and your cohorts comment how it could have been improved, done differently or kudos exactly the way it was played. Just an idea that seems like that might be fun. Besides we all love to talk about our winners.

Question from ITrumpDoom - Hello. If I expect a stock to move significantly over the next six months, but I do not  have a prediction for direction: Is it reasonable to sell a short put butterfly, and a short call butterfly on that stock, with all the long strikes at or very near the money? I think I would cover the risk in one of the flys, by the profit in the other, since it would be impossible for both of them to expire with maximum loss (not that I would hold to expiration). Is my logic sound on this? Is six months an unreasonable expiration to use on these given potential IV increases?

Around the Block:  Weekly jobless claims and Regional manufacturing survey (Philly Fed). Keeping an eye on the Iraq situation, crude and Brent oil prices.