CBOE GLOBAL MARKETS, INC. ranked among the worst performers on Thursday. It lost -1.73% to close at 102.61. It is currently trading -25% below it's 52 week high of 137.16.
CBOE showed a down trend over the last 3 months. During this period CBOE lost -1.53% . It has been unusually choppy during this period. Long term investors are better off avoiding investing in CBOE till volatility reduces and a clear trend emerges.
CBOE returned losses on 54% days in the last three months. During this time, it delivered on average -0.11% per day. It delivered it's best daily return of +3.03%, during this period, on Tuesday, 27 Nov, 2018. There was initially a bullish trend during this period which started on 14 Sep, 2018 and went on till 27 Nov, 2018. The bullish trend returned +3.03% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 6 Dec, 2018. This bearish trend lost -3.39% of investor capital.
CBOE had 5 profitable and 7 loss making months over the last year. During the last year, CBOE underperformed SP500 index on monthly return basis. CBOE was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -16.65% compared to -3.97% returned by SP500 index in Dec 2018. CBOE had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
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CBOE is becoming less volatile overall. In comparison, the SP500 index is seeing a fall in volatility. During the last three months, there was a significant surge in CBOE's volatility from 14 Sep, 2018 to 4 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 10 Dec, 2018.
Advanced/professional short-term investors should note that CBOE has significant positive skewness in it's return distribution. This indicates that investors can expect CBOE to recover from drawdowns quickly. Which makes CBOE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in CBOE derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.
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