The historic move in the bond market continued to weigh on stocks last week as the S&P 500 lost 2.4%, the Dow fell 1.6% and the Nasdaq declined by 3.1%.

Not surprisingly this past week had many ups and downs, as the market responded well to bad news early in the week and then gave up some of those gains on Friday. By week’s end the S&P 500 had gained 0.46%, the Dow had risen by 0.79% and the Nasdaq had fallen marginally.

Last week the stock market once again had some wild ups and downs, led mostly by volatile moves in the bond market. And while the start of the week was ugly, the action Friday was impressive – though the situation in the Middle East may throw those good vibes from Friday right out the window. By week’s end the S&P 500 had gained 0.5%, the Dow had fallen 0.3%, and the Nasdaq had risen by 1.6%.

The bond market’s wild gyrations were once again front of mind for traders last week, though interestingly by week’s end the market was mostly mixed as the S&P 500 lost 0.75%, the Dow fell 1.34%, and the Nasdaq was virtually unchanged.

It was a somewhat ugly week for the market as the Federal Reserve continued to push its hawkish agenda and the bond market reacted violently. By week’s end the S&P 500 had lost 2.93%, the Dow had fallen 1.89%, and the Nasdaq had declined by 3.62%.

It was a fairly quiet week in terms of the leading indexes’ performance as the S&P 500 fell marginally, the Dow mostly finished the week unchanged, and the Nasdaq fell by 0.4%.

Partially aided by declines in mega-cap technology stocks Apple (AAPL) and Nvidia (NVDA), both of which lost 6% last week, the holiday-shortened week was not particularly kind to the bulls as the S&P 500 fell 1.3%, the Dow lost 0.75%, and the Nasdaq declined by 2% last week.

The market is on course to have a nice week as the S&P 500 is higher by 3%, the Dow is up 1.2% and the Nasdaq tacked on 3% of gains. The VIX is trading at 13, which is lower by 17% on the week, which given the market’s gains is not surprising ahead of a long weekend.

The market had many ups and downs last week, and despite a nasty sell-off on Thursday the indexes closed the week mostly higher. The S&P 500 gained 0.8%, the Dow lost 0.45%, and the Nasdaq rose by 2.26%.

It was another rough week for the bulls as the bond market and China worries continue to weigh on the indexes. By week’s end the S&P 500 and Dow had both lost 2.22%, while the Nasdaq declined by 2.6%.

Last week was the first week in what feels like months that the sellers really took control. And while it was hardly a disaster in terms of the indexes as the S&P 500 fell 1.3%, the Dow lost 1.11% and the Nasdaq declined by 2.85%, the pain was worse in individual stocks, many of which fell hard on earnings.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.

This guide will help you execute the three types of options strategies recommended in Cabot Options Trader: Buying puts and calls, covered call writing and spreads.

Guide to Options Trading — Pro Version

Using Options to Hedge a Portfolio


A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

The equity and options markets were very quiet yesterday and are again today, as expected in the days leading up to the Christmas holiday.

As an options trader, I’m biased to using options versus buying stock when putting on positions.

Most traders know of buy-writes in terms of our recent XPO Logistics (XPO) trade. We bought stock and sold the May 45 Call. For every 100 shares purchased, we could sell one call.

I often get asked how I choose which order flow trades to follow and which to avoid. Two trades yesterday and today do a good job of illustrating my thought process:

In a Bull Risk Reversal, the investor buys the call and sells the put. It’s an ultra-bullish position as buying a call is a bullish position, and so is selling a put.

LEAP Options on Oil Stocks

In my morning email today, I highlighted a large trade in Anadarko Petroleum (APC). This trade is referred to in the options trading world as a Butterfly. Here are the details of the trade:

Trading is very slow today as many trading desks are closed in celebration of Veteran’s Day, so I thought it would be a good time to do an educational piece on a trading term known as Delta.

I want to highlight a hedging strategy that you may want to consider for your personal holdings.

With the market now down 1.25% on the day, some of our buy-writes are reaching, or breaking, our break-even levels. If this selloff continues, we may need to exit or adjust these positions. If we adjust our buy writes, we will likely close the call we’re short and sell another call, which will further lower our cost basis.

The most basic version of a bullish risk reversal is selling an out-of-the-money put and buying an out-of-the-money call. However, you can execute this type of trade with in-the money, or at-the-money options as well.