Option Block 565: Rise of the Widowmaker

The Option Block

Trading Block: Earnings today before the bell:

• Bank of America (BAC) leading off before the market opened Monday with a positive result.

Earnings today after the bell:

• IBM: $154.50, ADV 23K; Today over 50k, ATM Straddle: $6.50, approx. 4%

Resources mentioned in the show:

• OptionsHouse blog
• Options market sees Netflix as a coiled spring ahead of earnings
• CEO sold millions in Wells Fargo stock before fraud revelations

Odd Block: Calls trade in SPDR KBW Bank (KBE), calls trade in Bank of America Corp (BAC) and calls trade in 3D Systems Corp (DDD)

Mail Block: Listener questions and comments

• Question from Adam - Could you please explain what it means to "gamma scalp" and why this is not called delta scalping? Thanks and your show has saved me a lot of money now that I have come to the dark side!
• Question from Ian Wagner - Why trade volatility vs direction or income? Preference? More favorable risk/reward profile?

Around the Block/Earnings Highlights this Week:

• Tuesday - Dominos, Goldman Sachs, Intel, Johnson & Johnson, UnitedHealth.
• Wednesday - Abbott Labs, American Express, eBay, Mattel
• Thursday - American Airlines, Dunkin Brands, E*Trade Financial Corporation, Microsoft Corporation, PayPal, Verizon Communications
• Friday - General Electric Company, Honeywell International, McDonalds Corporation