Why the CBOE Could Be a Good Investment

Why the CBOE Could Be a Good Investment

Posted On May 14, 2019 1:55 pm

There’s an old saying “the house always wins” and the leading Chicago Board of Options Exchange (CBOE) is the largest house in the derivatives trading game.

As such it stands to gain — if trading activity and volatility increases.  And with the real possibility of the trade war creating daily headlines for months to come, one can expect trading volume, especially the type of hedging done with options, to increase.

Earlier this month, the CBOE reported earnings that beat on top and bottom line. But, it lowered full-year guidance.  The numbers were also sharply below last years Q1. But, it was a tough comparison as that period included the steep sell-off in February 2018 that drove volatility and trading volume higher.

In a…

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.