A WEEKLY look at the SLV

Options Trading & Analysis

Posted December 17th, 2010 by Andrew Giovinazzi in Trading & Analysis

A WEEKLY look at the SLV

One thing Aquminís AlphaVision landscape does very well is show broad market relative comparisons of pricing information. I have been keeping an eye on the CBOEís new Weekly products for a while trying to get a sense of how they trade. And, duh, it is just expiration every week.

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Using the Aqumin Option Landscape (patent pending) to see current Mid Volatility between the bid/ask and 2 week Historical Volatility a nice little pattern emerges. Greener series have MidVol higher than the current 2 week historical (that is mostly in the junk calls). Red series means the MidVol is trading below the 2 Week HV. If you look at the Option Landscape for the iShares Silver Trust ETF (SLV) below you see a lot of red centered around the at the money options, especially in the Weeklies.

This means the current Weekly pricing does not expect the SLV to be as volatile next week as it has been over the previous two. The Christmas effect is damping down those silver bells.

Andrew Giovinazzi

About Andrew Giovinazzi

Andrew Giovinazzi was a member of both the Pacific Exchange and the Chicago Board Options Exchange where he made markets in both equity and index option classes. During that period he never had a down year. In 1991, Andrew started and ran the Designated Primary Market Maker post for Group One, ltd in Chicago. He was instrumental in creating and managing a training program that allowed Group One, ltd. to significantly grow the company. He left Group One, ltd. to co-found Henry Capital Management in 2001. He became Chief Options Strategist of Option Pit Mentoring in the Fall of 2011. Andrew has a Bachelor's degree from the University of California, Santa Cruz in Economics. To learn more about Option Pit and their mentoring services, please visit: http://www.optionpit.com/mentoring

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