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Sept. 29, 2010
Wall Street Journal – Daily Options Could Be Tricky For Some Investors
“‘I believe that the market-making community will not offer these daily products very tightly because there’s so much variance to them,’Claussen said. ‘It’s a one-day bet on the stock.’
While the cost of a contract for a single day will seem low, Claussen said, a wide spread and immediate price erosion are two issues investors should weigh carefully.
‘Options are a wasting asset, a concept that is unique to options versus stock ownership,’ Claussen said. ‘Daily options will waste away every single day.’”
OptionsHouse currently offers a variety of trading tools to help customers screen trading ideas, calculate profit or loss of a certain strategy, analyze charts, or monitor risk. The “Risk Viewer” Tool, as its name implies, is a risk-management tool. Everyone trading stock or options should take advantage of it, from the experienced trader to the more novice one.
Wal-Mart’s (NYSE:WMT) plan for world domination has extended to the Cape of Good Hope. The world’s largest retailer has announced its intention to spend nearly $4.8 billion on the South African chain of Massmart low-cost retail stores. The Congress of South African Trade Unions (Cosatu) quickly voiced its displeasure, noting they will “oppose the setting up of any [Wal-Mart] stores in [the area].”
I mentioned the need for infrastructure in this country a 
Airline stocks were active on the 
Taking a much-needed quasi-vacation in Las Vegas, I couldn’t help but offer a couple words on strategy, risk, and probability. Walking through the casino last night, I couldn’t help but observe the throngs of tourists … some sober, but many partaking in the free alcoholic beverages offered by the house.
Is a company’s fundamental strength enough to power a stock higher? It’s an age-old rhetorical question and one that blue-chip names like Wal-Mart (NYSE:WMT) and Microsoft (NASDAQ:MSFT) have confronted for years. MSFT said earlier this week that it was upping its quarterly dividend to 16 cents per share from 13 cents, marking its first dividend increase in two years.
I’d like to share a quick update on a large eight-part options trade we saw in the CBOE SPX Volatility Index (VIX) yesterday. A trader appears to have bought to close 23,000 October 24/26 call spreads (buying the 24 calls and selling the 26 calls) for a net debit of 60 cents.
Bank of America (NYSE:BAC) may look as though it is headed higher from a late-August bottom, but one options trader isn’t sure if the shares will continue moving higher or will snap back lower. They do appear to expect a dramatic move, however, and seem to have expressed that thesis by scooping up longer-term long straddles.
