Options Update: Using XLE to Play OPEC Event

The video discusses the current state of the markets, focusing on the low VIX levels despite high market indices. It explores global implications, particularly the impact of European markets and IMF forecasts on US volatility. The discussion shifts to the options market, highlighting low realized volatility and its effect on trading strategies. Hewlett-Packard's earnings report and its impact on options pricing are analyzed, with a focus on the company's breakup. Finally, the video covers strategies for trading oil in light of the upcoming OPEC meeting, suggesting contrarian plays in the energy sector.

What is the VIX, and why is its low level surprising given the global market conditions?

• A currency exchange rate; it's low because of stable global markets.

• A stock index; it's low due to strong US market performance.

• A measure of market volatility; it's low despite global uncertainties.

• A bond yield; it's low due to high interest rates.

Why are investors hesitant to buy options despite the perception of cheap volatility?

• High transaction fees.

• Low realized volatility makes options less attractive.

• Lack of available options.

• High interest rates.

What is the market's focus regarding Hewlett-Packard's recent earnings report?

• The company's revenue growth.

• The impact of the company's breakup.

• The launch of new products.

• The company's stock buyback program.

What investment strategy is suggested for those with a bullish view on Hewlett-Packard?

• Short selling the stock.

• Buying call options.

• Selling put options.

• Using risk reversals.

What is the suggested approach for investors looking to play the OPEC meeting?

• Investing in technology stocks.

• Buying XLE as a contrarian play.

• Shorting the USO ETF.

• Investing in European markets.