Chart of the Week: Goldman Sachs

By Richard Bloch:Experienced options traders already know how volatility impacts options. But from recent articles and comments I've read, there seems to be this misconception that if you sell a call against a stock like Apple (AAPL) when volatility is high before earnings, you'll make money simply because the implied volatility will fall after the news is out.

Condor Options submits:Volatility Tracker for January 19, 2010

Bill Luby submits: ‘Tis the season for the annual holiday effect in which historical volatility (HV) has a strong tendency to plunge and drag implied volatility down with it.

Bill Luby submits: If there is one widely accepted tenet of volatility that my wife refuses to give in to it is that when a stock falls sharply its implied volatility almost automatically increases, yet when that same stock jumps sharply, its implied volatility almost automatically decreases. Volatility should be directionally agnostic, she insists, whether it is implied volatility or historical volatility.

Bill Luby submits: With VIX options expiring on Wednesday and VXX options expiring today (technically tomorrow) in the normal monthly expiration cycle, this is a big week for volatility traders who are comfortable holding options positions into expiration.

The Federal Crisis Inquiry Commission is pretty pissed at Goldman Sachs. Actually, make that really pissed. “We’re not going to let the American people be played for chumps here,” said co-chair Phil Angelides. His colleague Bill Thomas added that Goldman is attempting a "very deliberate effort to run out the clock.” Felix Salmon offers the back story:

Bill Luby submits: Several weeks ago, The New York Time ran an excellent graphic showing the interconnectedness of European debt in Europe’s Web of Debt. Other sources periodically trot out various charts of credit default swaps (CDS), but I have yet to see a graphic which attempts to measure the risk of global contagion.

Andrew Wilkinson submits: Boston Scientific Corp. (BSX) – Shares of the manufacturer of medical devices suffered an 18.50% decline in value today to arrive at a new 52-week low of $6.34 after the firm halted sales of its implantable heart defibrillator.