Option Block 366: The Knife Edge of Volatility

Trading Block: Most major indices up today on the street. Vol saw a bit of a rally as well. S&P briefly hit 2,000, but couldn't stay there.

 

Odd Block: Calls trade in Credit Suisse Group AG (CS), calls trade in H&R Block (HRB), and risk reversal trades in Lennar Corp (LEN).

 

Xpress Block: What’s new with IdeaHub? Futures side and securities side premium harvesting.

 

Mail Block: Listener questions and comments

• Question from Seven - With all the talk about exposure fees and excessive customer risk, is there any talk at OX or Schwab about raising the bar for options certification? Perhaps making it harder to qualify for options level 3 or even taking a test to qualify? I know you do not want to put barriers in front of customers but is that not preferable to the alternative?
• Question from Jack Schwartz - On a recent episode, Alex Jacobson from OX said that the OCC would never force a taxable event in the case of a corporate action. However, I am pretty sure I have seen OCC do exactly that in all-cash corporate deals. In those scenarios do the options not essentially expire on the transaction date, and the customer is left with the resulting debit or credit in their account?

 

 

Around the Block: Keeping an eye on the 10-year. Interest rates, where will the Fed go?