Week of April 19, 2010

Unless you were in a cave since Friday, you must have heard about the big news about Goldman Sach’s problems with the SEC involving their sale of collateralized debt options (CDO) allegedly designed by one customer to fail and then sold by Goldman to other unsuspecting customers….allegedly. All I know is that lawyers are going to get rich and that CST’s options director, Dan Keegan has a way to trade that news.

The biggest quandary an options volatility trader faces is when to jump on board the volatility bandwagon. On April 12^th the VIX (CBOE… [ Read more ]

Week of April 12, 2010

If it’s Monday, CST’s Options Director Dan Keegan must have another Pharmaceutical play. It could be because his Father was a doctor, or maybe it’s because the pharmaceutical sector is where all the volatility is, but Dan has been finding volatility with the VIX at ridiculously low levels (15.67 opening this morning). So pay attention and maybe Dan will come up with something to help pay your taxes.

On Friday, February 26th, 2010 OSI Pharmaceuticals, Inc (Public, NASDAQ:OSIP) closed at 37.02. The following Monday, March 1st, OSIP opened at 55.11 and closed the day at… [ Read more ]

Week of April 5, 2010

No it’s not Bob Hope with Ann-Margaret and Charo, this USO show is CST’s head option’s mentor Dan Keegan is talking about an intersting ETF to watch and how you might play it:

“USO” – United States Oil Fund LP (ETF) (NYSE) is the ETF (exchange traded fund) that most closely follows the oil market. Until recently It hasn’t had a great deal of movement in 2010. Any trader who sold the at-the-money straddle at the beginning of any [ Read more ]

Week of March 29th, 2010

We are going to step away from pharmaceuticals this week to take a ride on a HOG. I’m talking about Harley Davidson (HOG  NYSE, 28.11 close on3/26/10). The Milwaukee based motorcycle legend that real and weekend bikers alike insist is the only one worth taking for a ride. There are rumors that private equity wants to take a shot at Harley and take it private.  One strategy that you could use to take advantage of that possibility is the purchase of a time spread. Since the rumor is still alive there is a… [ Read more ]

Week of March 22nd, 2010

Well now that Northern Iowa, Cornell, and St. Marys have shredded your brackets, it’s time to look at the markets for salvation. The Chicago School of Trading’s Dan Keegan once again looks at the pharmaceutical sector for option volatility strategies. Today it is something called Provenge, which sounds like a Steven Seagal film. We will let Dan explain:

“First we talked about an Alzheimer’s drug with MDVN and then we talked about an obesity drug with AMLN and ALKS. Dendreon (DNDN) is next up with its prostate cancer drug Provenge (who names these things?).… [ Read more ]

Week of March 15th, 2010

Once again, our Dan Keegan is looking at volatility plays in pharmaceutical stocks with important drugs in development:

The premium sellers rule the day in regards to the FDA ruling on the weekly obesity drug, Byetta. The FDA denied approval of the drug but did not order additional testing, instead requesting the finalization of product labeling. This caused a rise in pharmeceutical stocks involved in Byetta’s development, but not the big up or down move that straddle buyers were looking for.
Amilyn (AMLN-NASDAQ), one… [ Read more ]

Week of March 8th, 2010

Last week, our chief options mentor, Dan Keegan talked about straddle opportunities in BIDU, the so-called “Chinese Google”. On Tuesday March 9, Dan will explain that strategy further in a free webinar we are hosting, “Trading Straddles in a Volatile Market”. Just click HERE to register.  This week Dan looks at another stock that has been on the move, but in the other direction.

On Wednesday, March 3rd some bad news came out for all of those families who have a member suffering from Alzheimer’s disease. Medivation’s (MDVN-Nasdaq) drug dimebon fared slightly worse than a… [ Read more ]

Week of March 1st, 2010

Usually, March comes in like a lion but this year it came in like a giant inflatable beaver. Those of you who saw the closing ceremonies of the Olympics know what I’m talking about. They should make a horror movie where giant beavers eat Montreal so they could recoup some of the money spent on those things. Speaking of recouping losses, most of you who responded to last week’s question about where the VIX would close, thought it would close higher (increased volatility). Thursday it looked like you would all be right as the… [ Read more ]

Week of February 22nd, 2009

We paraphrase a famous headline from Variety to talk about the VIX. VIX is the ticker symbol for the Chicago Board Options Exchange Volatility Index, a popular measure of the implied volatility of S&P 500 index options. The higher the VIX, the more volatile the market and therefore option premium increases. The VIX is also referred to as the fear index, it represents one measure of the market’s expectation of volatility. As you can see from the 1-year chart above, the VIX has… [ Read more ]

Happy President’s Day. We used to only honor Lincoln and Washington, but now we honor all of them with mattress sales. Like Chester Alan Arthur for example. Arthur had never held elective office until being elected Vice-President in 1880. He had been collector for the Port of New York, which was the most lucrative patronage job in the country. It was the chief source of graft for the “Stalwart” Republican machine of New York. When President Rutherford B. Hayes removed Arthur in an attempt to reform civil service, the Stalwarts responded by driving Hayes from the ticket in 1880 and… [ Read more ]