Option Block 416: Blasting Out Cheap XLE Puts

Option Block 416: Blasting Out Cheap XLE Puts

Trading Block: Rally ho on the street! Options traders are starting to pay up for crash protection, according to a recent note from Goldman Sachs. Long-dated crash put protection costs on the [S&P 500] have more than doubled over the past 9 months.

S&P 500 declines for third straight week as dollar resumes rally. OPEC says low oil prices may hit U.S. output by late 2015.

Odd Block: Puts trade in US Silica Holdings Inc. (SLCA), put trade in iShares MSCI Brazil Index (EWZ), and calls trade in Lowes Co. (LOW).

Xpress Block: Check out both the Xpresso and Xpound blogs.

Strategy Block: Tosaw discusses breaking his rules in a recent put spread trade.

Mail Block: Listener questions and comments

• Question from Rahul Tondulkar - Hey guys I want to know how much minimum open in required to say that the option has liquidity? Can anyone please help me out??
• Question from Neal Tompkins - How do I know when an option is going to be less liquid? What are some good suggestions for dealing with less liquid options?

Around the Block: Upcoming Earnings: Tuesday – Oracle; Wednesday - FedEx, Silver Wheaton; Thursday - Nike, Lennar