Trade idea
NASDAQ scalping
The speaker scalped NASDAQ futures by buying at lower levels, indicating a short-term bullish bias. They mentioned buying NASDAQ futures down 450 last night and noted that the market was trading lower, suggesting a potential for short-term gains. The speaker also mentioned buying in 10% increments, indicating a cautious approach to position sizing.
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Strategyscalping
Assetfutures
Time horizonshort-term
Entry / triggerbuying at lower levels
Target / exitnot specified
Invalidation / stopnot specified
SpeakerScott Sheridan
Risks- Market reversal
- Slippage in fast-moving markets
- Inability to exit at desired levels
Trade idea
CRUDE_OIL sell premium
The speaker suggests that crude oil is rangebound and advises selling premium if necessary. They believe the price is unlikely to hold above 74 and prefer being at 67. They are not willing to go short at 74 but would consider selling premium. If the price approaches 80, they would be more open to selling short. The trade idea is to sell premium in the current range, with a target of 77 to 80 and an invalidation level at 74.
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Strategysell premium
Assetcommodity
Time horizonshort-term
Entry / triggerprice above 74
Target / exit77 to 80
Invalidation / stopprice drops below 74
Speakerspeaker
Risks- price drops below 74
- volatility increases
- market sentiment shifts
Trade idea
Rivian undefined risk trade
The speaker recommends starting with cheaper stocks like Rivian to get used to undefined risk trades. This approach allows traders to build confidence and reach profit targets faster. The speaker emphasizes the importance of managing risk through position sizing and suggests that undefined risk trades offer a higher probability of profit compared to defined risk trades.
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Strategyundefined risk trade
Assetstock
Time horizonNot explicitly stated, but the speaker suggests starting with cheaper stocks to build confidence.
Entry / triggerIdentify stocks that are a little bit cheaper, such as Rivian, to get started with undefined risk trades.
Target / exitReach profit targets faster with undefined risk trades.
Invalidation / stopNot explicitly stated, but the speaker suggests using defined risk trades as a starting point.
SpeakerSpeaker
Risks- Market volatility
- Potential for larger losses compared to defined risk trades
Trade idea
PLTR strangle
The speaker suggests widening the strike range of a strangle position in PLTR from 130-150 to 100-180 to capture more call skew and improve comfort during volatility expansion. This adjustment is based on the observation that the current position is underperforming due to the puts moving in the money. The strategy assumes that volatility will continue to expand, which is supported by recent market conditions. The risk is that volatility may contract, leading to a loss.
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Strategystrangle
Assetequity
ExpirationAugust
Time horizonshort-term
Entry / triggervolatility expansion
Target / exit100-180 strike range
Invalidation / stopvolatility contraction
SpeakerTony
Risks- volatility contraction
- premium costs
Trade idea
VIX buy VIX futures or options
Given the current levels of implied volatility and the VVIX at 90, the expected move of the VIX is statistically likely to include a level above 20. This suggests that the market's volatility is expected to be significant, and traders should consider this when assessing potential moves in the VIX. The probability of the VIX closing above 20 before September 2026 is estimated to be over 90%.
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Strategybuy VIX futures or options
Assetvolatility_index
Expiration2026-09-01
Time horizonlong-term (2026)
Entry / triggerVIX closes above 20 before September 2026
Target / exitVIX closing above 20
Invalidation / stopVIX remains below 20 for the entire period
SpeakerMarket Analyst
Risks- The VIX may not reach the expected level due to unforeseen market conditions
- Volatility can be highly unpredictable, leading to potential losses
Trade idea
Dell selling calls and puts
The speaker believes that the IBR being above 100 indicates a potential trade opportunity for Dell. By selling 600 calls and 300 puts for August, the speaker anticipates a price range that could result in a profit of five to six bucks. The strategy is based on the assumption that the IBR will move above 100 and that the stock will trade within the predicted range.
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Strategyselling calls and puts
Assetequity
ExpirationAugust
Time horizonshort-term
Entry / triggerIBR above 100
Target / exitfive to six bucks
Invalidation / stopIf the IBR remains below 100 or if the stock price moves outside the predicted range
SpeakerSpeaker
Risks- Market volatility affecting the stock price
- Incorrect interpretation of the IBR
- Potential for the stock to move outside the predicted range
Trade idea
soybeans strangle
The speaker suggests selling a 1290/1120 strangle on soybeans for a credit of $712. This is a delta-neutral trade with a high IVR of 93, indicating a potential for significant returns. The trade is considered attractive due to the high implied volatility and the potential for a 75% pop. The speaker also mentions that this trade is being considered alongside a Dell trade due to the high IVR observed in soybeans.
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Strategystrangle
Assetcommodity
Expirationnot specified
Time horizonshort-term
Entry / triggercurrent price level
Target / exitcredit of $712
Invalidation / stopif the price moves beyond the strangle range
SpeakerThe bat
Structure / legs- sell 1290 call
- sell 1120 put
Risks- volatility risk
- time decay
- market movement beyond the strangle range
Trade idea
SPACEX put
The speaker recommends selling 90 puts on SpaceX with a 94% probability of profit and an expected move of $32. The trade offers a favorable risk-reward ratio, with the stock trading at $150 and the puts priced at $125-$135. The speaker emphasizes that this is a high-probability trade with a significant return on capital, even though it's not guaranteed to work out. The speaker also notes that the IVR (Implied Volatility Rank) may not be reliable for new offerings, but the IVX (Implied Volatility Index) is more trustworthy.
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Strategyput
Assetequity
Time horizonShort-term
Entry / triggerStock trading at $150
Target / exit125-135
Invalidation / stopIf the stock moves significantly against the trade
SpeakerSpeaker
Risks- The trade is not guaranteed to work out
- The IVR (Implied Volatility Rank) may not be reliable for new offerings
- The expected move may not materialize as anticipated
Trade idea
SLV strangle
The speaker is short strangles on SLV, with the put at 51.48 and the call at 52.49. The trade is based on the assumption that the stock is on its lows and will not move significantly. The speaker mentions that the trade is expected to have a 64% pop and an IVR of 31. The trade is considered a good opportunity due to the current market conditions and the potential for a profit.
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Strategystrangle
Assetcommodity
ExpirationAugust
Time horizonshort-term
Entry / triggerstock is on its lows
Target / exit1.00
Invalidation / stopif the stock moves significantly against the trade
SpeakerTony
Structure / legs- short put at 51.48
- short call at 52.49
Risks- Significant market movement against the trade
- Time decay reducing the value of the options
Trade idea
IWM premium selling
The speaker has been short premium in IWM throughout the year, but it has not been a good trade so far. The speaker suggests that IWM has been the worst performer among major indices, and the strategy is to collect premium by selling calls. The thesis is that the market rally may continue, and IWM could be a good candidate for premium selling if it continues to underperform.
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Strategypremium selling
Assetindex
ExpirationAugust
Time horizonshort-term
Entry / triggermarket rally
Target / exitpremium collection
Invalidation / stopif the stock continues to underperform
SpeakerSheridan
Risks- Market downturn
- Underperformance of IWM
- Volatility in the market
Trade idea
Dell short call spread
The speaker suggests adjusting the Dell trade by selling higher strike calls (650 or 700) and buying lower strike puts (300). This strategy is based on the call skew in the market, which is described as 'ridiculous.' The idea is to capitalize on the skew by selling calls and buying puts, which can provide a profit if the stock remains within a certain range. The speaker also mentions rolling the position to the next month if the assumption remains unchanged.
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Strategyshort call spread
Assetstock
ExpirationJuly
Time horizonShort-term, with potential for rolling the position to the next month
Entry / triggerMarket conditions suggest a potential for a short call spread strategy
Target / exitProfit from the call skew and the put credit
Invalidation / stopIf the stock moves significantly against the short call positions
SpeakerTom
Structure / legs- sell 650 calls
- sell 700 calls
- buy 300 puts
Risks- Market movement against the short call positions
- Potential for increased volatility
- Need for careful monitoring and adjustment
Trade idea
ZN selling out-of-the-money puts
The speaker is selling out-of-the-money puts on ZN (109 or 108.5) and buying a call spread on 109-110, based on low implied volatility and a directional bias. The trade is expected to profit from the directional movement of the bond market, with a focus on short-term expiration. The strategy is based on the speaker's default approach of using delta ranges and expiration periods.
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Strategyselling out-of-the-money puts
Assetbond
Expiration45 days
Time horizonshort-term
Entry / triggerimplied volatility is low
Target / exitprofit from directional movement
Invalidation / stopif the market moves against the directional bias
SpeakerTom
Structure / legs- put on 109 or 108.5
- call spread on 109-110
Risks- Market moves against the directional bias
- Implied volatility increases
- Liquidity issues in the options market
Trade idea
Bonds put selling
The speaker is shorting the 110 puts on bonds, which are trading around 58. They sold them at 54 and 50, indicating a belief that the market will not move significantly against their short position. The speaker notes that bonds are down 24 ticks, suggesting a potential for the put positions to profit if the market continues to decline. However, the risk of the market moving against the short position is a key consideration.
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Strategyput selling
Assetfixed_income
ExpirationAugust
Time horizonshort-term
Entry / triggermarket down 24 ticks
Target / exit54 and 50
Invalidation / stopmarket moves against the short position
SpeakerScott
Risks- Market reversal
- increased volatility
- unexpected economic events
Trade idea
ZB selling puts
The trader is selling puts on ZB (30-year Treasury bonds) with an August expiration, targeting a strike price of 110. The trade is considered a high probability trade with a break-even point at 109. The trader believes that the market is unlikely to reach the break-even level due to the current economic environment. The trade is designed to collect a premium while limiting downside risk. The trader also mentions similar strategies for ZN (10-year Treasury notes), selling puts at a strike price of 108.5 with a break-even point at 108.
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Strategyselling puts
Assetbond
ExpirationAugust
Time horizonshort-term
Entry / triggercurrent price around 110 handle
Target / exitbreak-even at 109
Invalidation / stopif bonds fall below 109
SpeakerLisa
Structure / legs- August expiration
- strike price of 110
- premium collected
Risks- Market conditions can change rapidly
- Potential for unexpected volatility
- Need for accurate market analysis
Trade idea
MEES scalping
The speaker advocates for starting with micro futures like MEES and MNQ due to their liquidity and lower capital requirements. Scalping these contracts allows traders to practice without significant risk, focusing on quick profits from small price movements. The strategy emphasizes discipline and staying with the trade until comfortable, avoiding the temptation to overtrade or prove a concept too quickly.
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Strategyscalping
Assetfutures
Time horizonShort-term, typically minutes to hours.
Entry / triggerStart with one micro contract and stay with it until comfortable.
Target / exitQuick profits on small price movements.
Invalidation / stopLosses on large price movements or if the trader is not comfortable with the strategy.
SpeakerSpeaker
Risks- Overtrading
- Market volatility
- Emotional decision-making
Trade idea
MEES scalping
Scalping futures requires understanding the expected move and setting profit targets between 20-40% of that move. The risk should be managed by setting a stop loss at 2x the expected profit. This approach helps in capturing small price movements efficiently while managing risk effectively.
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Strategyscalping
Assetfutures
Time horizonShort-term, typically within a single trading session.
Entry / triggerWhen the expected move is known and the market is within a defined range.
Target / exit20-40% of the expected move, which for MEES is between $50 and $100 if the expected move is $250.
Invalidation / stopLoss level should be set at 2x the expected profit, which would be $100 if the target is $50.
SpeakerUnknown
Risks- Volatility can cause larger-than-expected moves
- Market gaps can lead to unexpected losses
- Psychological pressure from frequent trading
Trade idea
MEES scalping
The speaker advises against hedging or spreading off a losing scalp trade. Instead, a scalp trade should be treated as a standalone position, and one should either take profit or accept the loss without attempting to hedge or spread off the losing scalp. This approach prevents confusion and potential worsening of the situation. The speaker also mentions that MEES is a liquid micro future with a $125 per tick and $5 a point, and a decent scalping range is 20 to 40% of the expected one-day move.
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Strategyscalping
Assetfutures
Time horizonshort-term (scalping)
Entry / triggershorting a future in crude oil or gold
Target / exit20-40% of the expected one-day move
Invalidation / stop2x loss is considered optimal
Speakerunknown
Risks- Confusion from hedging strategies
- Potential for increased losses if hedging is attempted
Insight
Small Cap Rally as an Underappreciated Market Story
The transcript highlights the 20% rally in small-cap stocks as an underappreciated market story, suggesting that it has been overlooked compared to the performance of large-cap and AI stocks. This indicates that small-cap stocks may offer unique opportunities that are not widely recognized by the broader market.
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Applicable when- small-cap stocks rally
- market regime shift
Limitations- The transcript does not provide specific data or analysis on the sustainability of the rally or its impact on broader market health.
Insight
Market Volatility and Trading Adjustments
The speaker discusses the challenges of trading in a volatile market, particularly with the S&P 500 and NASDAQ futures. They highlight the need for adjustments in trading strategies, such as scaling in with smaller positions and managing risk through partial coverage. The speaker also notes the importance of adapting to market conditions, as seen in their decision to buy NASDAQ futures at lower levels and sell puts in gold with mixed results.
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Applicable when- high volatility
- adjustable trading strategies
- risk management
Limitations- The effectiveness of these strategies depends on market conditions and individual risk tolerance
- Not all traders may find these strategies applicable due to differing capital and experience levels
Insight
Small Cap Rally as an Underappreciated Market Story
The speaker highlights the 20% rally in small-cap stocks as an underappreciated market story, noting that it has been a surprise despite the market's overall performance. The rally is attributed to various factors, which will be discussed in detail later. The speaker prefers small-cap stocks for buying due to their lower cost and the ability to trade options on them, which aligns with their trading strategy.
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Applicable when- small-cap stocks
- market rally
- trading strategy
Limitations- The speaker's personal preference may not apply universally to all traders
- The factors driving the rally are not fully explained in the transcript
Insight
Transition from Defined Risk to Undefined Risk Trades
The speaker discusses the transition from defined risk trades to undefined risk trades, emphasizing the psychological and practical challenges involved. They suggest starting with lower-priced stocks and using a small percentage of account capital to test the waters. The key takeaway is that undefined risk trades offer a higher probability of profit, but they require careful management to avoid overexposure and loss of diversification.
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Applicable when- small_account_size
- transition_from_defined_risk
Limitations- requires careful management to avoid overexposure
- not suitable for all traders due to increased risk
Insight
Risk Management and Position Sizing
The speaker emphasizes the importance of managing risk through position sizing, suggesting that traders should allocate a specific percentage of their capital to each trade based on their account size. For accounts over $25,000, a 3-7% allocation is recommended, while accounts under $25,000 should use 5-10%. This approach helps mitigate risk and ensures that no single trade can significantly impact the trader's overall capital.
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Applicable when- trading with defined risk
- position sizing strategies
Limitations- Requires a sufficient account size to implement effectively
- Does not account for market volatility or unexpected events
Insight
Strangle Position Management
A strangle position with closely spaced strikes can become less effective when volatility expands, as the puts may move in the money. The speaker suggests widening the strike range to capture more call skew, which can improve comfort and potential returns. This strategy is applicable when volatility is expected to expand, and the position is in a volatile environment. Limitations include the need for accurate volatility forecasts and the risk of increased premium costs.
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Applicable when- volatility expansion
- strangle position
Limitations- requires accurate volatility forecasts
- increased premium costs
Insight
Volatility of Volatility and Expected Moves
The VVIX (volatility of volatility) is a key indicator for understanding the expected range of the VIX. A VVIX of 90 implies that the expected move of the VIX is statistically likely to include a level above 20, with a high probability of over 90%. This suggests that the market's volatility is expected to be significant, and traders should consider this when assessing potential moves in the VIX.
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Applicable when- high volatility environment
- expectation of significant market moves
Limitations- The VVIX is a forward-looking indicator and does not guarantee actual outcomes
- Market conditions can change rapidly, affecting the accuracy of expected moves
Insight
Dell Trade Strategy Based on IBR Indicator
The speaker suggests a trade strategy for Dell based on the IBR (Index-Based Ratio) indicator. When the IBR is above 100, it indicates a potential trade opportunity. The speaker proposes selling 600 calls and 300 puts for Dell in August, anticipating a price range that could result in a profit of five to six bucks. This strategy relies on the assumption that the IBR will move above 100 and that the stock will trade within the predicted range.
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Applicable when- IBR above 100
- Dell stock price range prediction
Limitations- Uncertainty in the stock price movement
- Potential for incorrect IBR interpretation
- Market volatility affecting option prices
Insight
Hedging Long Positions with Options
To hedge long positions against potential downside, one can sell upside calls or buy downside puts. This approach provides protection without necessarily selling the underlying holdings. The strategy involves selecting round numbers for the strike prices and aligning the position size with the portfolio value. It is important to note that this method introduces complexity and may not be ideal for all investors due to its messy nature and tax implications.
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Applicable when- long positions
- downside protection
- portfolio hedging
Limitations- tax implications
- complexity of execution
- potential for reduced returns due to hedging costs
Insight
High Probability Trade with Favorable Risk-Reward Ratio
The speaker highlights a trade involving selling 90 puts on SpaceX with a 94% probability of profit and an expected move of $32. The trade offers a favorable risk-reward ratio, with the stock trading at $150 and the puts priced at $125-$135. The speaker emphasizes that this is a high-probability trade with a significant return on capital, even though it's not guaranteed to work out.
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Applicable when- high probability of profit
- favorable risk-reward ratio
- implied volatility analysis
Limitations- The trade is not guaranteed to work out
- The IVR (Implied Volatility Rank) may not be reliable for new offerings
- The expected move may not materialize as anticipated
Insight
Managing Narrow Iron Condors
A narrow iron condor, such as the $15 wide one on Tesla, is a high-risk trade due to its tight strike range. The speaker suggests widening the strikes or moving the trade to a later expiration to reduce risk. This is particularly relevant when the trade is close to expiration, as the time decay accelerates. The trade's profitability is also dependent on the stock's movement, and the speaker advises considering alternative strategies if the trade is not performing well.
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Applicable when- narrow strike ranges
- close to expiration
- high volatility
Limitations- Requires market movement in the desired direction
- Time decay can reduce profitability if the trade is held too long
Insight
Small Cap Outperformance as a Rally Indicator
Small cap outperformance in the first half of 2026 is seen as a sign of broader market health, driven by the lack of publicity for smaller stocks and their lower price points. This outperformance is attributed to a general market rally, with small caps catching a bid due to their lower valuations and the overall market environment. The speaker suggests that this trend is part of a broader buying spree as the market rises.
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Applicable when- market rally
- small cap stocks
- low publicity
Limitations- The trend may not be sustainable
- It could be a temporary rally rather than a long-term trend
- The market environment may change rapidly
Insight
Small Cap Stocks and Volatility
Small cap stocks are described as having high volatility relative to other asset classes, which can offer more potential returns for investors who can find liquid options. This volatility can be leveraged through options strategies, providing more bang for the buck. The key is to identify liquid stocks that can accommodate such strategies effectively.
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Applicable when- volatility
- liquidity
- options trading
Limitations- Volatility can also lead to higher risk
- Not all small cap stocks are equally liquid
- Requires careful selection and risk management
Insight
Trade Strategy Based on Implied Volatility and Delta
The speaker's trade strategy involves selecting trades based on implied volatility (IV) and delta, with a default range of 40-50 days to expiration. For directional trades, the speaker prefers strikes around 45 days, with a delta range of 20-30. This approach is applied across various assets, including bonds, commodities, and equities.
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Applicable when- directional trades
- implied volatility
- delta-based trading
Limitations- Requires availability of specific strike prices
- May not be suitable for all market regimes
Insight
Market Volatility and Risk Management
The speaker emphasizes the importance of monitoring market volatility and managing risk, particularly in the context of the VIX index. The VIX, often referred to as the 'fear index,' has seen a significant increase, indicating heightened market uncertainty. The speaker acknowledges the impact of such volatility on trading strategies and highlights the need for adaptability and caution in response to market movements.
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Applicable when- high volatility
- market uncertainty
- risk management
Limitations- The speaker's comments are based on a specific time frame and market conditions, which may not be indicative of future performance.
Insight
Bond Trading Strategy with Puts
The speaker describes a strategy of selling puts on bonds, specifically ZB (30-year Treasury bonds) and ZN (10-year Treasury notes), with a focus on high probability trades. The trade involves selling puts at a strike price slightly below the current price, which allows the trader to collect a premium while limiting downside risk. The break-even point is calculated based on the strike price and the premium collected, and the trader believes the market is unlikely to reach the break-even level due to the current economic environment. This strategy is considered a high probability trade with a clear risk-reward profile.
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Applicable when- high probability trades
- limited downside risk
- premium collection
Limitations- Market conditions can change rapidly
- Requires accurate market analysis
- Potential for unexpected volatility
Insight
Start Small with Micro Futures for Scalping
The speaker emphasizes starting with micro futures contracts as a more digestible and less expensive entry point for scalping. Micro futures, such as MEES and MNQ, are more liquid and trade a significant number of contracts daily, making them ideal for beginners. The key is to start with one contract and stay with it until comfortable, avoiding the temptation to prove a concept too quickly.
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Applicable when- beginner traders
- scalping futures
- small capital
Limitations- Requires discipline to avoid overtrading
- Not suitable for those seeking high-risk, high-reward strategies
Insight
Understanding Tick and Handle Sizes
The tick size and handle size are crucial for understanding the cost of moving a position in futures contracts. For example, MNQ (NASDAQ Index) has a tick size of $125 and a point value of $5, while MEES (Micro E-mini S&P 500) has a tick size of $5 and a point value of $0.50. These values determine the monetary impact of each price movement, which is essential for risk management and trade execution.
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Applicable when- futures trading
- tick size
- handle size
- position sizing
Limitations- Applies to specific contracts like MNQ and MEES
- Does not cover other instruments or markets
Insight
Avoid hedging with losing scalp trades
The speaker advises against using a losing scalp trade as a hedging tool. A scalp trade should be treated as a standalone position, and one should either take profit or accept the loss without attempting to hedge or spread off the losing scalp. This approach prevents confusion and potential worsening of the situation.
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Limitations- This advice is specific to scalping and hedging strategies, not applicable to other trading styles like swing trading or long-term investing.
Q&A
Can you give us some keys to where do I start scalping futures?
The transcript discusses the history and techniques of scalping futures, emphasizing the importance of understanding market mechanics and the evolution of trading tools. It also highlights the need for experience and the use of specific strategies such as hedging and leveraging market knowledge.
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Actionable takeawayTo start scalping futures, one should understand the market mechanics, use hedging strategies, and leverage experience with market tools and techniques.
Q&A
Is the 20% small cap rally one of the most underappreciated market stories of the year?
The speaker acknowledges the significance of the 20% small cap rally as an underappreciated market story, suggesting it has been overlooked by many traders. They emphasize the importance of recognizing such opportunities, especially for traders who focus on specific indices like IWM.
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Actionable takeawayThe 20% small cap rally is highlighted as a significant but underappreciated market story, suggesting traders should pay attention to small-cap indices like IWM.
Q&A
Why do you think small-cap stocks are cheaper?
The speaker states that small-cap stocks are cheaper, making them more attractive for outright buying rather than trading options. This is due to the lower cost of entry and the ability to trade options on them, which aligns with the speaker's trading strategy.
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Actionable takeawaySmall-cap stocks are preferred for their lower cost and the ability to trade options, which aligns with the speaker's strategy.
Q&A
How would you go about moving from defined risk rates to undefined risk trades in a small account?
The speaker suggests starting with lower-priced stocks and using a small percentage of account capital to test the waters. They emphasize the importance of careful management to avoid overexposure and loss of diversification. They also mention that undefined risk trades offer a higher probability of profit but require careful execution.
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Actionable takeawayStart with lower-priced stocks and use a small percentage of account capital to test undefined risk trades, ensuring careful management to avoid overexposure and loss of diversification.
Q&A
What bothers you most about traditional financial media?
The speaker believes that traditional financial media tends to be more cheerleading than informative. They feel that many media personalities do not actually participate in the markets and provide more macroeconomic analysis than a trader's perspective. The speaker appreciates individuals who have an opinion and have traded the stocks they discuss, as opposed to those who merely regurgitate headlines.
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Actionable takeawayTraditional financial media often lacks practical trading insights and focuses more on macroeconomic analysis rather than actionable trading strategies.
Q&A
Do you guys find all your own trades or do you have some other source?
The speaker and their colleagues find their own trades. They do not rely on external sources but may consider trade ideas from others. They acknowledge that they sometimes take different approaches to the same trade ideas and that they listen to ideas from emails or other traders, but they do not necessarily follow them.
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Actionable takeawayTraders should find their own trades and consider ideas from others but not necessarily follow them.
Q&A
Do I need to worry about the dividend event in 3 days for my short call position in Dell?
No, you do not need to worry about the dividend event in 3 days for your short call position in Dell. The stock needs to be over 500 for you to have dividend risk. Since the stock is currently at 436, you are not at risk of dividend exposure.
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Actionable takeawayDividend risk for short call positions is only relevant if the stock price exceeds the strike price. In this case, the stock is below the strike price, so dividend risk is not a concern.
Q&A
Do you guys come up with all your own trades?
The speaker confirms that they do come up with their own trades, but also mentions that they get ideas from other people, such as the person who wrote the question about the IBR in Dell.
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Actionable takeawayTraders can get ideas from other people, such as through forums or discussions.
Q&A
How would you hedge the potential downside of a long portfolio?
To hedge the potential downside of a long portfolio, one can sell upside calls or buy downside puts. This approach provides protection without necessarily selling the underlying holdings. The strategy involves selecting round numbers for the strike prices and aligning the position size with the portfolio value.
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Actionable takeawayUse options strategies like selling upside calls or buying downside puts to hedge long positions.
Q&A
What is the probability of profit for the SpaceX trade?
The probability of profit for the SpaceX trade is 94%.
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Actionable takeawayThe trade has a high probability of profit, making it a favorable option for traders.
Q&A
Should I keep my Tesla iron condor closer to expiration or manage it differently?
The speaker advises that since the trade is close to expiration, it's better to either widen the strike range or move the trade to a later expiration. The speaker also suggests selling out-of-the-money calls in August to collect premium and potentially profit from any upward movement in the stock.
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Actionable takeawayConsider adjusting the strike range or moving the trade to a later expiration to manage risk and potential profit.
Q&A
What does small cap outperformance in the first half of 2026 signal about the health of a broader market?
Small cap outperformance is seen as a sign of broader market health, driven by the lack of publicity for smaller stocks and their lower price points. This outperformance is attributed to a general market rally, with small caps catching a bid due to their lower valuations and the overall market environment.
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Actionable takeawaySmall cap outperformance may indicate a broader market rally, but it is not a guaranteed indicator of long-term market health.
Q&A
What is the Dell trade strategy?
The Dell trade strategy involves selling higher strike calls (650 or 700) and buying lower strike puts (300). The speaker suggests adjusting the trade based on the call skew in the market, which is described as 'ridiculous.' The idea is to capitalize on the skew by selling calls and buying puts, which can provide a profit if the stock remains within a certain range.
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Actionable takeawayThe strategy involves using a short call spread with higher strike calls and lower strike puts to capitalize on market skew.
Q&A
Do you prefer monthly expirations over weeklies? And if yes, is that due to the volume?
The speaker prefers monthly expirations over weeklies due to volume and the complexity of managing multiple weekly options. The methodology also dictates not holding options beyond 21 days, which aligns with the preference for monthly expirations.
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Actionable takeawayMonthly expirations are preferred due to higher volume and the difficulty of managing weekly options.
Q&A
What is the current state of the VIX index?
The VIX index has increased by 10%, indicating heightened market volatility and uncertainty. The speaker acknowledges this as a significant development and notes that it is a key factor in their trading decisions.
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Actionable takeawayThe VIX index is a critical indicator of market sentiment and risk, and its increase suggests a need for caution in trading strategies.
Q&A
Could you go over the mechanics of your bond trade?
The speaker explains that they are selling puts on ZB (30-year Treasury bonds) with an August expiration, targeting a strike price of 110. The trade is considered a high probability trade with a break-even point at 109. The trader believes that the market is unlikely to reach the break-even level due to the current economic environment. The trade is designed to collect a premium while limiting downside risk. The trader also mentions similar strategies for ZN (10-year Treasury notes), selling puts at a strike price of 108.5 with a break-even point at 108.
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Actionable takeawayThe trader is selling puts on bonds with a high probability of success, collecting a premium while limiting downside risk.
Q&A
Can you give us some keys to where do I start scalping futures?
The speaker recommends starting with micro futures contracts like MEES and MNQ due to their liquidity and lower capital requirements. They emphasize starting small, using one contract, and staying with it until comfortable. The speaker also highlights the importance of understanding tick and handle sizes for these contracts.
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Actionable takeawayStart with micro futures contracts like MEES and MNQ, understand tick and handle sizes, and practice with one contract until comfortable.
Q&A
What is the expected move for MEES?
The expected move for MEES is approximately 50 handles or $250.
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Actionable takeawayUnderstanding the expected move helps in setting realistic profit targets and managing risk effectively.
Q&A
What is the recommended approach for scalping?
The speaker advises against hedging or spreading off a losing scalp trade. Instead, a scalp trade should be treated as a standalone position, and one should either take profit or accept the loss without attempting to hedge or spread off the losing scalp. This approach prevents confusion and potential worsening of the situation.
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Actionable takeawayAvoid hedging with losing scalp trades; treat each scalp trade as a standalone position.