In the November 15, 2020, issue we had a rather comprehensive discussion of the CBOE’s Equity-only put-call ratio. Both its history over the last 20 years and the comparison of 2020 statistics with those past 20 years were discussed. This is just a brief article to update the figures through the end of the year.
It may seem as if the market is slowing down, but if it is, it's only in a relative sense. $SPX made new all-time intraday and closing highs on each of the last two days, and $NDX (QQQ) did the same. The Dow ($DJX; DIA) and Russell 2000 (IWM) are only one day removed from all-time closing highs.
All one really needs to know is that the chart of $SPX (and the others) remains strongly positive. The first support level is at 3725-3750. Below there, the next support area is 3630-3650.
This article was originally published in The Option Strategist Newsletter Volume 13, No. 5 on March 11, 2004.
In the last issue, we spelled out the details of the CBOE’s new volatility contracts, which are due to be listed on March 26, 2004. In this issue, we’ll spell out some strategies that every stock portfolio owner should consider – whether or not you currently trade options and/or futures. These new contracts (futures symbol: VX) are dynamic in that they will provide a hedge for you during a declining market, no matter when that decline occurs, and no matter where the market is when the decline begins. This is a vast improvement over, say, buying puts for insurance purposes. We’ll spell out the mechanics of operating such a hedging strategy, and we’ll look at some of the problems that may occur – at least as we can envision them from this vantage point in light of the fact that actual trading has not yet commenced.
The market remains overbought in many areas, and confirmed sell signals are beginning to appear. However, the most important indicator (the chart of $SPX) remains in a positive uptrend. There is support near 3725, more important support at 3630-3650, and then 3550.
This article was originally published in The Option Strategist Newsletter Volume 7, No. 2 on January 22, 1998.
From questions that subscribers have asked, and from conversations with other option professionals, it seems that there is a rather large contingent of stock owners who own stocks that are now at losses, and they want to know if options can help them out at this point. So, this article will discuss a simple strategy that can be used for these purposes – the stock “repair” strategy of placing a call spread on top of a long stock position.