Options Insight: How to Play Kellogg

The video discusses the current state of market volatility, focusing on the VIX and CBOE Skew Index. It highlights the differences in protection costs for unlikely market events and analyzes the skew index's historical behavior. The discussion shifts to individual stocks, particularly Kellogg, examining its trade potential amid market activity and earnings reports. The video concludes with an exploration of options strategies to achieve convex exposure, emphasizing the importance of gamma and non-linear payouts.

What does the CBOE Skew Index measure in the market?

• The interest rate changes

• The average stock price

• The daily trading volume

• The cost of protection against unlikely market events

What is the significance of the flat skew between puts and calls in the S&P 500?

• It means increased volatility

• It shows a lack of significant risk being priced in

• It suggests high correlation among stocks

• It indicates high market risk

Which company is highlighted in the trade of the day?

• General Mills

• Kraft Heinz

• Campbells

• Kellogg

What is the main goal of the options trading strategy discussed for Kellogg?

• To gain convex exposure with a non-linear payout

• To minimize trading fees

• To increase stock dividends

• To reduce stock price volatility

In the discussed strategy, what is the purpose of selling a put spread?

• To fund the purchase of a call option

• To maximize dividend yield

• To hedge against market downturns

• To increase stock ownership