RBC Capital Markets' Wu Silverman on where she sees peak worry across the options market

The video discusses the current market setup, highlighting optimism and the correlation between VIX and SNP. It explores the impact of the Delta variant on the options market, particularly in the retail sector. The challenges of pricing in the Chinese market are examined, emphasizing the difficulty for Western investors. Strategies for trading during periods of volatility and earnings season are suggested, including selling puts and using put butterflies. The stock-bond conundrum is addressed, with insights into options market strategies related to bond yields.

What is the relationship between the VIX and the S&P 500?

• They are always at the same level.

• They have no correlation.

• They are inversely correlated.

• They are directly correlated.

What is skew buying power in the context of the options market?

• The power to influence market trends.

• The number of calls obtained by selling out-of-the-money puts.

• The ratio of calls to puts sold.

• The ability to buy stocks at a discount.

Which ETF is particularly sensitive to the Delta variant according to the transcript?

• FXI

• XRT

• TLT

• HYG

Why is it difficult for Western investors to price Chinese market dynamics?

• Because Chinese markets are closed to foreign investors.

• Because of the PRC's unilateral decision-making.

• Due to the lack of market data.

• Due to high transaction costs.

What is a put butterfly trade?

• A strategy involving buying and selling multiple puts at different strike prices.

• A strategy of buying only call options.

• A strategy of holding stocks for long-term gains.

• A strategy of selling all options before expiration.

What is the stock-bond conundrum mentioned in the transcript?

• Stocks at record highs while bond yields are low.

• Stocks and bonds moving in the same direction.

• Bonds outperforming stocks consistently.

• Stocks and bonds having no correlation.

What could potentially influence rates according to the transcript?

• Non-farm payrolls data.

• Retail sales figures.

• Consumer confidence index.

• Housing market trends.