Two of the hot topics today are Bear Stearns (BSC) and the CBOE Market Volatility Index (VIX). I touched on BSC earlier but there is obviously more to the story. I was starting to pull some thoughts together when I saw that David Gaffen pretty much cornered the market on BSC coverage. Rather than try to recap everything, I think it is much easier to admit defeat and just send you to his blog for details on today's conference call.

As far as the CBOE Market Volatility Index (VIX), Frank just dropped me a note asking... "Hi nick I have a quick question why are the VIX options trading with a negative premium...Can you write something about that please."

Adam Warner, who writes the Daily Options Report blog frequently touches on the VIX and its options so I pinged him to get his thoughts. Here is what he said...

"The reason is twofold. One is that the options are on the VIX future, and the VIX future mean reverts. So on a day like today, when the VIX is poppling, the futures don't go up nearly so much."

"Two is that it's European exercise, so thus you can sit with a call under parity, and there's nothing you can really do about it, you can't exercise it until it expires."

I posed this question to Adam for two reasons. One - he is a former floor trader and knows his stuff. Two - he recently instituted a self-imposed ban on discussing the VIX and I was hoping to entice him into breaking his vow. Ironically, it turns out my "trap" was wasted energy as he put up a post on the VIX just minutes before I sent him the question. As he said in his reply to me - "I just violated [the ban] (you'll probably cut me some slack when you see why, lol)."

Yes, Adam I do. And thanks for the thoughts....and the "chart" of the VIX. Very uplifting...