Browse questions by topic, symbol, month, or whether the answer includes an actionable takeaway.
It's not four to six, it's six to four. You just say who's winning.
The lessons learned are that the speaker did not trade it too big, and it just had such an incredible move.
The speaker is concerned about the lack of control over people with inside information, but the other person dismisses it as not a concern for them.
In the 24 hours before earnings, there is uncertainty leading to people buying cheaper options to protect their positions, which holds volatility up. It's rare for volatility to implode before earnings. Market makers and risk teams manage their positions, and there's a tug-of-war between those selling premium and those buying premium. The outcome depends on market forces and no one knows if volatility will expand or contract.
The speaker states that selling puts is not about being happy to own the stock but about taking on risk. They mention that they would be happy to own the stock at a certain price, but it's not a justification for selling puts.
Option trades have a minor impact on stock prices, primarily through market makers hedging positions. The primary drivers of stock prices are momentum and retail investor behavior, with significant pressure on large-cap stocks like Apple and Microsoft.
The speaker believes there's an 80% chance Apple will beat estimates, but the stock's direction is 50/50.
The speaker believes the market is moving, and it's a little ugly out there today. He also mentions that gold has been weak and silver has been down.
The speaker suggests that someone who sells puts naked without any other strategy would likely be buying their own island due to the risks involved.
The speaker explains that 'taking out to the woodshed' means chopping up or discarding something, like stocks, and storing them for the winter. It's a metaphor for dealing with overbought stocks by selling them.
PayPal does have earnings.
The answer is yes.
The speaker questions who will pay for the internet, suggesting that the cost might be passed on to consumers, and compares it to the past when the internet's purpose was initially seen as primarily for porn.
The speaker mentioned that they have done shows in Europe, including London, Milan, Edinburgh, Birmingham, Manchester, and Dublin, and plan to return to Europe later this year and next year. They also mentioned a goal to visit Singapore, Australia, and India.
The speaker regrets not rolling down calls earlier, as it would have saved them a significant amount of money.
You have to have clothes on because if you don't have clothes on it'll be disturbing for you to watch it without clothes on.
The speaker discusses the advantages of trading after hours, such as instant news reaction and the ability to trade on earnings. However, they also note that trading on news is not always effective and that price changes often drive trading decisions rather than news events.
The speaker acknowledges that trading from these regions is challenging due to time zone differences and the difficulty of accessing real-time market data.
The speaker acknowledges that trading options is possible but notes that it's harder to open trades when there are wide markets.
The speaker mentions that the E-mini S&P and Nasdaq are down, indicating a bearish trend in the markets.
The speaker suggests that there is no inherent reason for Circle to be correlated with Bitcoin. In fact, they argue that stablecoins should be negatively correlated or uncorrelated with Bitcoin because they are used for safety, while Bitcoin is used for upside potential. The speaker also notes that the value of a stablecoin company is not correlated with digital assets or cryptocurrencies.
The speaker states that the correlation between certain companies and stablecoins is a coincidence and has nothing to do with reality. This implies that the relationship is not based on any fundamental connection but may be due to market sentiment or other external factors.
There is an upper limit circuit breaker on silver, but it is not specified in the front month. The speaker mentions that the back month has a limit, but the exact value is not known. The speaker also notes that the current price movement is 'ridiculous,' suggesting that the market may be overcorrecting.
The gold-to-silver ratio is calculated by dividing the current price of gold by the price of a silver contract. For example, if gold is priced at $50 and a silver contract is priced at $112, the ratio is approximately 47.
The discussion suggests that the anticipated drop in XLV has not materialized, possibly due to the lack of actual price reductions by Blue Cross Blue Shield, which may be passing on higher premiums back to drug companies. The net effect on consumers is minimal, and the ETF's performance is influenced by broader market sentiment and investor behavior.
The speaker argues that it does not make sense to complement futures with physical exposure as a hedge against exchange intervention. The speaker explains that physical gold is not a practical hedge in today's world and that it lacks utility in times of economic collapse. Instead, the speaker suggests that physical gold is not a reliable hedge because it cannot be used for everyday transactions during crises.
Yes, an at-the-money vertical spread typically trades around half the width of the spread. The call and put spreads are each approximately half the width of the spread, though there may be slight variations due to pricing skew.
The speaker suggests selling covered calls at a low delta and/or further out in time instead of using the 45 21 mechanics.
Individual investors can compete with quants and bots by focusing on their own trading strategies and lanes within the market. While high-frequency quants have advantages in speed and scale, retail investors can leverage liquidity provided by these entities. The key is to avoid direct competition in high-frequency trading and instead focus on areas where retail investors can excel, such as long-term strategies and fundamental analysis.
Quantitatively examining regime shift is a complex task that requires advanced analytical techniques and is considered a PhD-level question. The speaker acknowledges the difficulty and notes that the question lacks specificity regarding which regime is being referred to.
The speaker lists potential factors such as earnings erosion, political tensions, and credit crises as possible reasons for a market downturn. The speaker also notes that markets often have a 'villain' for downturns, such as the 1987 crash, 1989 crash, 2000 crash, and 2008 crisis. The speaker suggests that political tensions are a likely candidate, but acknowledges that the market may not care about such factors and could continue to rise despite them.
The speaker suggests that the money from AI primarily comes from the purchase of Nvidia chips, which are used to power AI platforms. This creates a loop where companies invest in AI, which in turn drives demand for Nvidia chips, leading to further investment in the company.
The speaker acknowledges the VIX spiking to 40 as an extended move but does not view it as a bullish signal for 2026. Instead, they suggest a bearish outlook with a potential 3-4% decline, citing the market's extended upward trend and the impact of geopolitical issues on earnings.
The transcript mentions that a poll expects the S&P 500 to rise by 62% in 2020, based on historical performance where it has typically risen between 56% and 60% over the past 15 years.
Oil prices are noted to be 'too cheap' and have only increased by $10 since the start, indicating a potential undervaluation or a belief that prices could rise further.
The speaker suggests that the 'buy the rumor, sell the news' strategy is not supported by statistics and is largely random. The market's behavior, particularly with stocks like SpaceX and Micron, indicates that these stocks trade as if they are on sale, suggesting that the strategy may not be effective in current conditions.
The speaker states that the adage 'buy the rumor, sell the news' is 100% random. They mention that certain situations, such as the end of a war, can lead to either a rally or a sell-off, and that the market's reaction is unpredictable. The speaker also notes that it is impossible to know if the market is priced to perfection unless it is in hindsight.
The speaker suggests rolling the covered calls to the next month or using alternative strategies like selling puts and buying calls to manage risk and maintain exposure.
The brainless buying is driven by people looking for quick returns and getting on the train of market movements without proper analysis. This behavior is often observed during market dips, where traders enter positions without considering the underlying fundamentals or risks.
The speaker believes that the moonshot model, characterized by exponential wealth growth through quick returns, has become the new norm in the market. This is attributed to the shift in investor behavior, particularly among younger generations like Gen Z, who are more inclined towards high-risk, high-reward strategies. The speaker suggests that retail investors are now capable of moving markets, as evidenced by events like the GameStop and AMC stock craze.
The speaker acknowledges that Elon Musk has made more than Warren Buffett's worth in a short period, but emphasizes that this does not mean that one should follow Musk's investment approach. The speaker suggests that while Musk's success is impressive, it is not a reliable indicator of long-term investment success.
The speaker believes the market is experiencing a correction, with the S&P down 12 and the NASDAQ down 200. However, they suggest that the market has time to recover by the end of the show.
The speaker argues that it is difficult for smaller traders to be contrarian because they cannot afford extended drawdowns. However, they also suggest that it is possible if the trader can manage risk effectively and trade smaller positions relative to their account size.
The speaker suggests that selling insurance and selling options are fundamentally different. Insurance involves risk transfer and is typically a one-time event, while options trading involves complex market dynamics and requires a deep understanding of volatility and market behavior. The speaker emphasizes that these two activities are not comparable due to their distinct risk profiles and market mechanisms.
The speaker believes that commodities may exhibit more mean reversion compared to stocks, but this is not universally agreed upon. The speaker acknowledges that while historical data may suggest this, validating such claims is challenging. The speaker also notes that certain commodities may have more mean-reverting characteristics than others.
It depends on the individual. Some people enjoy managing money and running a fund, while others find it tedious and not enjoyable. The speaker and Scott found it not fun, but others may have different experiences.
The speaker is engaging in a casual conversation and is being asked about their investment experiences, particularly regarding SpaceX.
Tom scalps futures during the first hour of trading because he believes it is the most volatile and uncertain period, creating opportunities for countertrend trades. He identifies the weakest and strongest futures and takes opposite positions based on this analysis.
Annual reviews are used to document performance, provide feedback, and justify decisions like layoffs. They are often seen as a necessary but inefficient process, especially in larger organizations.
It is unlikely that SPY, QQQ, or similar index funds will be split anytime soon. While some ETFs have split in the past, such as the S&P 100, the S&P 500 has not split. Fractional options are not expected to be introduced, and the likelihood of a split is low due to the complexity of derivatives and the interests of fund managers.
A discrepancy between delta and probability in the money can be caused by factors such as individual strike volatility, skew, and market conditions like upcoming earnings or events. The delta is generally more accurate as it is calculated per strike, while the probability in the money is a simplified measure based on distance from the strike. The difference is usually small, but large discrepancies can occur due to high volatility or unusual market conditions.
The speaker suggests that while hedge funds may have different capabilities, the core issue of size leading to failure remains. He references a case where a trader named Captain Condor, who used iron condors, faced significant losses due to over-leveraging and consecutive losses, highlighting the risks of size in trading.
The speaker explains that certain futures contracts, such as the 5-year and 2-year Treasury notes, are harder to trade due to their complexity and lower liquidity. In contrast, the 30-year (ZB) and 10-year (ZN) Treasury notes are more liquid and suitable for retail investors. The speaker also mentions that agricultural futures like wheat (ZW), corn (ZC), and soybeans (ZS) are more accessible and liquid, with all contracts trading one tick off the mid price.
Defined risk strategies are recommended for traders who cannot monitor the market throughout the day. These strategies help manage risk by setting clear limits on potential losses, which is crucial when market monitoring is not possible. The rationale is that without the ability to monitor, traditional stop-loss orders can lead to disasters, and defined risk strategies provide a structured approach to risk management.
Volatility is a math equation and is mean-reverting, unlike price, which is not mean-reverting. This makes volatility a more reliable measure for trading strategies.
Traders typically buy VIX puts for the front month because they get paid more if they are correct, and it offers a faster return. Buying puts three months out is less attractive due to the higher cost and the reduced likelihood of being correct over a longer period. The speaker explains that the VIX has a floor built in, making long-dated puts less valuable and less effective for hedging.
The 22 delta strike strategy is applicable across various trade durations, including one-day, seven-day, and 45-day options. The model remains consistent regardless of the time frame, fitting the same spot in the decay curve.
The speaker acknowledges the question as an arbitrage opportunity and states that they are not aware of anyone actively doing this. They also note that high-frequency firms are not known to engage in such practices.
Rolling the put strike to take additional credit is considered an offensive roll if the trader is bullish on the underlying asset. However, the speaker suggests that taking profits is a more common approach, especially if the trade is already profitable and the time to expiration is approaching.
Bitcoin is trading at 63,991, having dropped from 62 and a half earlier in the morning.
The speaker mentions a 'cancel crash' and discusses the market's behavior, noting that it was crashing as usual on Sunday night. They also talk about missing an opportunity to buy bonds and not wanting to buy S&P or sell crude oil.
The market tends to react to rumors before actual news, a phenomenon known as 'buy the rumor, sell the news.' This indicates that traders often act on anticipated events rather than waiting for official information.
Product indifference refers to the approach of not being tied to specific products or assets, allowing for better adaptability and flexibility in a rapidly changing market. This is particularly relevant in 2026, where market conditions are expected to be highly dynamic.
No, the speaker states that there is no politician or figure in Washington where their statements would have a significant impact on trading decisions. The only exception might be Trump due to his ability to move the market, but even then, the market's reaction is uncertain.
Decision-making is considered a measurable skill in the career ecosystem. It is argued that while it's challenging to quantify, the ability to make decisions is a critical factor in evaluating someone's suitability for a role or opportunity. The transcript suggests that decision-making is often assessed internally or externally, even if it's not easily quantifiable.
School provides a foundation, but real-world experience is essential for progress. The speaker emphasizes that while academic knowledge is important, practical experience is what drives career advancement and skill development.
Developing leadership skills is important for those who aspire to move up the corporate ladder or achieve greater success in business or startup environments. While some people may be naturally inclined towards leadership, others may find it uncomfortable. However, cultivating these skills is crucial for career growth and preventing stagnation.
Trading across multiple asset classes does not necessarily dilute expertise, as long as the trader remains focused on liquidity and is comfortable with the products they trade. The speaker emphasizes that expertise can be maintained by learning more and staying adaptable, even when trading a variety of instruments.
Yes, there are legitimate reasons to avoid certain products. These include the size of the product relative to the trader's account, excessive leverage, and illiquidity. For example, a trader with a small account may not be able to handle the size of a large bond contract, and products with high leverage or low liquidity can pose significant risks.
The speaker acknowledges that most retail investors find it confusing and heavy to trade everything, but he personally does so. The poll in the Dog Pound shows 53% of respondents say 'yes' and 47% say 'no'.
The speaker suggests that diversification is more valuable for reducing correlation risk, as it helps mitigate the risk of being overly correlated across investments. Product indifference, while related, is a broader concept that can apply to various strategies like duration, volatility, or underlying products, and is not directly focused on correlation risk.
The speaker acknowledges that tax week may contribute to the quiet market activity, as people are preoccupied with their taxes and the market tends to be less active during this period. However, the exact relationship is not explicitly detailed.
The speaker states that the market is less than 3% away from all-time highs, with the S&P 500 being approximately 180 points away from its all-time high.
The speaker denies being cake indifferent, expressing a preference for Italian cake and stating they like cake in general.
The speaker believes that the price of oil will not continue to rise beyond the 125-130 range, as the current volatility is already priced in. The speaker also mentions that the rumor is over and the news is out, so there is no more upside for oil.
The speaker states that their trading strategy does not change in these market conditions. However, they suggest adjusting position sizes and risk management practices when volatility is high, as the market has already priced in the potential for volatility. This approach helps mitigate risk while maintaining exposure to potential market movements.
A short squeeze occurs when the price of an asset rises, forcing short sellers to cover their positions by buying the asset, which further drives up the price. The speaker explains that short squeezes are often the result of a collective panic on one side of the market and a coordinated effort on the other. However, the speaker notes that short squeezes are not always a result of skill but can be a media-driven phenomenon. The speaker also mentions that there has been a shift from short squeezes to FOMO (fear of missing out) in recent years, particularly with the rise of meme stocks and commodities like silver and gold.
The euro (6E) is recommended as a good starter for a strangle due to its liquid markets and the lack of skew in currency options. The speaker also mentions that the British pound (6B) is less favorable due to its smaller contract size and less liquid options market.
The current market cap of WeBull is $2.52 billion, which is at a 52-week low of $4.77.
The speaker mentioned that angel investors were present at the event and that they were interested in startups. They suggested networking with mentors and participating in events like the one at the University of Illinois. The speaker also emphasized the importance of building a strong pitch and engaging with potential investors through events and mentorship programs.
The best way for young entrepreneurs to raise capital is through networking. The speaker emphasizes that young entrepreneurs should leverage their personal connections, including friends, family, and networks, to secure initial funding. They can also use their own time and effort to create value with minimal financial investment.
The speaker believes that dark pools are primarily used by institutional traders for large orders and provide anonymity. They are not considered a practical tool for retail traders, who lack access to such platforms. The speaker also mentions that while dark pools may offer an edge for some, they are not a reliable strategy for most retail traders.
The speaker is confused about why monthly ES futures do not settle to the closing price, and the response indicates that there are no monthly ES futures. The discussion suggests that the question may be about options, which are different from futures. The answer highlights the distinction between futures and options and the lack of monthly ES futures.
The lawsuit against Meta is unlikely to have a significant impact on the market or stocks, as it is more about regulatory and social issues rather than direct market manipulation. However, it could lead to changes in social media policies and regulations, which might affect the long-term valuation of social media companies.
The speaker states that the lawsuit will not have any impact on the market. However, they acknowledge that Meta has been hit by the lawsuit, indicating that the company's stock price has been affected.
The speaker mentions having traded Bloom Energy (BE) once in the last two years, but does not recall the specifics of the trade. They note that the stock has experienced significant volatility with +5% daily moves and that the options market is wide. The speaker suggests that the volatility is around 120 and that spreads may not move significantly, so the strategy involves trading around mid-price. The speaker also notes that they would not trade anything naked in this environment due to the high volatility and risk.
A $30 minimum wage per hour would significantly increase costs for consumers and businesses, potentially leading to reduced demand for services. The speaker argues that businesses may pass on these costs to consumers, making goods and services more expensive.
The market is showing signs of stabilization with bottoming tape action, supported by rising bonds and a falling Vix. The speaker believes the market is unlikely to go lower today.
The go-to strategies for shorting the market include short skew strangles, flatout shorts, ES micro contracts, diagonals, and naked calls in SPY. These strategies provide pure short delta exposure and are suitable for capturing market declines.
The speaker did not trade any Russell. They mentioned trading NASDAQ and S&Ps, being long gold, short silver, and short micron. They also mentioned buying Netflix premarket and selling it out.
Traders with larger accounts often invest in stocks, bonds, ETFs, and short-term cash instruments. They may also invest in private equity, their own businesses, or use strategies like covered calls. The discussion emphasizes that managing larger accounts becomes increasingly complex and that many investors opt for managed solutions or diversify their investments.
The speaker has not used the option binomial strategy using the 100-step method, and it is explained as a complex model developed by John Cox, Steven Ross, and Mark Rubenstein in the 1970s. The method involves breaking the time to option expiration into 100 discrete intervals to create a tree that models possible future price movements of the underlying asset. The speaker acknowledges the complexity and lack of personal experience with the strategy.
The maximum number of orders that can be entered in a trading day is 390. However, this is a limit that can be exceeded over the course of a month, but not on a single day.
The speaker suggests that while there is a correlation between Bitcoin and the S&P 500, and NASDAQ also correlates with the S&P 500, the relationship between Bitcoin and NASDAQ is not well-defined. They mention that figuring out the ratio for a pairs trade is challenging and that using micro futures contracts could help determine the ratio. However, they do not explicitly recommend a trade.
The speaker mentions that while there are online resources and tools available, they personally do not focus on these metrics. They suggest that private equity firms, CFOs, and analysts typically care about these metrics, and that fractional CFOs or analysts can handle the analysis. The speaker emphasizes that the process is more about having the right team or resources to handle the analysis rather than relying on specific tools.
Yes, your money is safe at a brokerage firm. Customer assets are segregated and protected under regulatory frameworks. There have been no instances of securities firms costing customers a single penny, despite some issues in futures markets.
Active options traders should adapt by trading smaller, wider, and longer-dated positions. They can selectively reintroduce directional risk while taking less of it. This approach helps mitigate the risk of complacency and outlier losses in low volatility environments.
The speaker acknowledges the difficulty of beating 4x risk-free rates, especially with the low rates in recent years. They estimate that the answer is a majority of the time, but they do not provide specific figures. The speaker also notes that they do not track or report actual returns due to the variability in risk-taking and the focus on transparency in trading strategies.
Bitcoin is considered a wise investment as long as it remains a small portion of the portfolio. The speaker recommends holding less than 1% of their portfolio in digital assets, with Bitcoin being a long-term holding. The rationale is that digital assets have shown positive returns and can add alpha to a portfolio, but they should be held in small quantities to manage risk.
The speaker suggests that the first two things to do are to focus on building a solid foundation through experience and utilizing available tools. They emphasize that everyone's path is different and that the tools available today are more advanced than in the past, making it easier to start from the bottom.
The NASDAQ has risen 350 points, which the speaker finds surprising given the heavy short position they had earlier in the morning.
The speaker suggests that a 2% selloff can be seen as a buying opportunity, but emphasizes that a more significant move, such as a 5% washout, would be more indicative of a valid opportunity.
The speaker discusses the geopolitical chaos and the difficulty of trading during such times. They note that opportunities or dislocations are often already priced in by the time traders can act. The speaker suggests focusing on the market's immediate movements (the tape) rather than reacting to news. They also mention that trading during such times is challenging and that hindsight is often easier than real-time decision-making.
Re-centering a trade involves buying the guts and selling the wings to adjust the risk profile. This technique is cost-effective today due to market efficiency and allows traders to re-center their positions frequently.
Taxing unrealized gains can significantly stifle trading and investment by discouraging participation in financial markets. The speaker argues that such policies are economically harmful and lead to a reduction in market activity.
The problem of emotional drawdowns in trading is significant, as it affects discretionary traders' performance. The speaker suggests that there are existing platforms attempting to address this issue, and they are a recent investor in one of them. To approach building a design partnership with firms, one could leverage the speaker's experience in building successful trading terminals and demonstrate the value of AI-native solutions in reducing emotional trading impacts.
The speaker recommends building a set of software-based rules and mechanics rather than relying on agentic AI. This involves using deterministic systems like finite state machines or Markov decision processes to understand and manage trading strategies. The challenge lies in figuring out these mechanics, which requires significant technical expertise and effort.
The pros of doing the strategy on the same day include less bid-ask differential and avoiding premium decay. The cons of extending the time frame include higher premium decay and the risk of wasting premium. The speaker prefers the same day for simplicity and efficiency.
The risk is not inherently higher in one strategy over another when considering the expected move and time decay. The risk is tied to the expected move and the time decay, which is similar across strategies. The focus should be on personal comfort and the expected move.
The speaker recommends starting with small amounts of money, experimenting with different strategies, and learning through hands-on experience. They suggest trying various assets, including stocks, crypto, and event-based contracts, while keeping risk low. The key is to gain experience and understanding before committing to long-term investments.
The account size that is most successful for trading is between $50 and $150. This range allows traders to manage risk effectively and avoid capital issues. Larger accounts (over $200) are also beneficial, but the $50 to $150 range is considered optimal for self-directed investors.
There is never a mechanical reason to exercise options that go in the money. Exercising such options is typically a strategic decision based on market conditions and personal trading goals, not a mechanical necessity.
The speaker suggests maintaining a portion of capital as dry powder, typically around 25% to 50%, depending on the trader's risk tolerance and market conditions. The exact allocation may vary based on implied volatility (IVR) and the trader's account size. The speaker also mentions that smaller accounts may allocate up to 70% of their capital to dry powder, while larger accounts may use a smaller percentage.
The recommended percentage of capital to allocate for trading varies depending on the account size and market conditions. Larger accounts typically use around 40%, while smaller accounts can use up to 70%. The speaker suggests that the percentage should be adjusted based on the VIX level and market volatility.
The speaker is uncertain about the current spread, estimating it to be in the low 60s, but acknowledges the difficulty in determining the exact value without a calculator.
Micron traded at 810 this morning, up from 710 the previous day.
The speaker mentions that the S&P is down, but does not provide a specific reason for the decline. The context suggests it is a general market observation without a detailed analysis.
Social media plays a significant role in investment decisions, particularly in 2026, as it influences traders and investors more than traditional financial media. It provides real-time information and insights, often leading to immediate market reactions.
The speaker acknowledges that social media plays a significant role in investment decisions, particularly for a majority of investors. They argue that social media influences market movements through collective behavior and herd mentality, making it more impactful than traditional news sources for many.
The expected move in Coinbase is $36, with the speaker noting that the stock is down $6 today, so the actual profit may be lower than the $200 credit. The speaker advises waiting to see if Coinbase rallies before entering the trade.
Face-to-face interactions are considered more engaging and emotionally impactful compared to virtual meetings. They facilitate better communication, commitment, and trust, making them preferable for serious professional engagements such as interviews or business meetings.
The bid being higher than the ask can occur due to market dynamics and liquidity. When selling put spreads, traders may aim to be slightly above the bid to avoid being filled on the offer side, which is less likely. The inversion of bid and ask prices can be influenced by factors such as market sentiment, order book depth, and the specific strike prices involved.
The software is being developed to include a heat map showing salary variations across the US. It allows users to input a city and state to compare salaries in different locations. The heat map is being launched with 400 different locations across the US.
The speaker discusses the current state of bonds, noting that they are trading near their lows, with specific mention of ZB (2-year Treasury) and AMs (10-year Treasury). The speaker also mentions the upcoming change in the Fed chair and the potential impact on bond markets.
To scale, traders should increase their buying power by widening strikes or using larger Delta options. This allows for incremental increases in position size without increasing unit risk. The key is to prove the concept by incrementally increasing contracts and staying consistent with buying power.
The speaker suggests that traders should accept short-term losses as part of the process and focus on long-term success. They emphasize that having a proven track record helps reduce the pressure of proving oneself in volatile markets.
The speaker suggests building confidence through incremental steps, such as starting with a small account, gradually increasing contract sizes, and diversifying the portfolio. This approach allows traders to gain experience and confidence without risking too much capital at once.
The speaker explains that if you get assigned early, you don't worry about it. You roll, you get out, but on the off chance that you do get assigned, it's not a big deal. You just cover it, you do whatever the position is, you get out of the remaining option that you're long with the stock, you can exercise depending on where you are, and just move on. It's not a big deal. The speaker also mentions managing trades early to avoid assignment risk.
Google's stock is up nine bucks, making it the strongest stock of the day. AMD is up 42, Nvidia is up almost six bucks, and Apple is up almost two bucks. These gains indicate strong performance in specific stocks, though the overall market volatility is subdued.
The speaker believes that the market's reaction to Trump's tweets is positive, suggesting that investors may perceive such events as opportunities rather than risks.
The speaker is indicating that they are already 35 minutes into the day and are discussing the market's performance, suggesting they are ready to continue the conversation.
The equity market has not experienced a single legitimate pullback, indicating strong performance and investor confidence. The speaker notes that this is unusual compared to other markets like silver and gold, which have seen significant declines.
Passive investors did not have to buy Bitcoin because it was not considered a security and was not part of any index. This allowed them to avoid exposure to Bitcoin's volatility.
Triple witching involves the expiration of stock options, futures, and futures options. Quadruple witching adds the expiration of single stock options to this mix. The speaker notes that today is June triple witching, and quadruple witching would involve one quarter of the number of expiration cycles.
The speaker suggests that preparing kids for the job market at such an early age is unnecessary and potentially harmful. They argue that children should not be burdened with life choices until they are older, and that college should be approached as a self-discovery process rather than a predetermined path. The speaker also emphasizes the importance of allowing children to explore and find their own interests rather than forcing them into a specific career track.
The speaker believes that perpetual futures are not a significant threat to existing futures exchanges like the CBOE or CME. They argue that perpetual futures are more of a product offered by crypto exchanges and are not easily fungible for traditional futures or options trading. The speaker also notes that the CME is considering offering perpetual futures, but the success of such products will be moderate.
The call diagonal spread is more favorable because it offers a better risk-reward ratio. Call spreads trade cheaper compared to put spreads, which are more expensive. This makes the call diagonal spread a more attractive option for traders who are bullish on the stock.
The speaker suggests that Microsoft is too big to fail and that there is not a lot of risk in Microsoft. However, they acknowledge that Oracle has been heavily impacted by the AI move and has taken a larger hit than Microsoft. The speaker is not certain about the future performance of either company but feels that both are in reasonable positions given their recent declines.
The speaker believes that Microsoft will not be 'swallowed up' by AI, and that it is relatively cheap compared to its peers. The speaker also references IBM's recent price movements as an example of how software stocks can experience rapid changes in value.
The S&P 500 is up 70 points, and the NASDAQ is up 620 points. The market is showing positive movement, but there is no mention of new highs being reached. Volatility remains at 1870, and certain stocks like MU and AMD are performing well, while Microsoft is softer.
The transcript mentions that 53% of the 'dog pound' said no to including SpaceX in the S&P 500. The speaker is surprised by this result, indicating a general sentiment against inclusion.
Pin risk occurs when a stock closes at a strike price, and the trader is short options. This can lead to the options being exercised, resulting in a loss. The speaker explains that if you're long options, you have the choice to exercise, but if you're short, you're at risk. The speaker also mentions that if you're short options close to the money, you need to make a decision by the end of the day.
The composite opening print is the opening price of all stocks in the index, not the high or low of the market that day. It is typically released 15-20 minutes after the market opens and is more efficient than in the past.
The speaker is not on Twitter because they believe Tony ruined the platform for them, and they prefer to avoid the platform's current state.
The speaker expresses a positive opinion about the hockey game, noting it as one of the best playoff series ever and highlighting the excitement and unpredictability of the game.
The speaker indicates that the market has been opening higher but failing to hold, leading to a significant sell-off. The speaker expects a reversal, with the market closing higher than the current level.
The speaker suggests that buying 20-year zeros at 5.3% is not advisable, as they believe rates are likely to rise, leading to lower bond prices. They also mention that bonds have underperformed other assets in the long term.
The answer emphasizes the importance of not being swayed by market noise and focusing on core objectives. It suggests that speed can be advantageous, but it must be paired with a clear understanding of the company's primary mandate or objective.
The speaker clarifies that the SpaceX IPO is priced at 135 and will start trading on Friday, not tomorrow. They emphasize that the price is not changing and that the valuation is around 1.75 to 1.77 trillion.
The speaker suggests that traders should make quick decisions and stick with them, rather than over-analyzing and missing opportunities. This approach relies on trusting one's gut and avoiding overthinking, which can lead to hesitation and missed opportunities.
Cash crypto, such as Bitcoin, cannot be used as collateral in traditional cash accounts due to regulatory constraints. However, platforms like Coinbase and Kraken offer loan rates against crypto holdings, providing an alternative for traders seeking to use their crypto as collateral.
The speaker explained that trading involved managing delta, which is the sensitivity of an option's price to changes in the underlying asset's price. They balanced trades by hedging the delta of options using futures or other options, focusing on delta management rather than complex strategies. This approach was described as straightforward and not requiring advanced knowledge.
The expected move for the July 34 puts on IBIT is $3.70.
The discussion indicates that changes in a company's platform can affect user experience and business practices. The speaker mentions that while the company they sold has the right to make changes, they prefer to maintain their own platforms due to different business philosophies. This suggests that users may need to adapt to new platform features or changes, which could influence their trading strategies and overall satisfaction.
The speaker initially thought the percentage would be around 10%, but the poll results showed 37% of the audience holding Bitcoin.
Most CEOs are not primarily focused on the impact on employees, wages, and the community. Founder CEOs are more likely to consider these factors, but non-founder CEOs are typically paid to focus on financial outcomes. The speaker agrees that founder CEOs are different and that they are more likely to prioritize these factors.
The speaker suggests that the length of an employment gap is a concern for employers, and the answer emphasizes the importance of having a clear explanation for the gap. The speaker also notes that the individual in question has been out of work for a period of time and is seeking a new job.
On days with extreme market moves, traders should reduce position size, roll out in time to reduce delta exposure, and consider underhedging or underadjusting positions. Mental stops and a 2% rule can also be used to manage risk.
The 2% rule is a risk management strategy where a trader exits a position if they lose more than 2% of their available capital. The speaker suggests that this rule could be applied if following a strategy similar to Mr. Sheridan, but they personally do not use it.
A 10% correction is considered a normal market fluctuation, while a larger drop may indicate deeper issues or a more significant market reaction. The speaker notes that fundamentals play a critical role in determining a company's ability to recover from such drops.
The speaker estimates that on average, about 500 people attended each show over the years. This results in an estimated 250,000 people over 500 shows, assuming each show had 500 attendees. These are real traders actively participating in the shows.
The speaker states that 'prime do the opposite' occurs during ultimate capitulation, such as when volatility expands into the 30s, 35-40 range. The speaker indicates that the current situation is not yet prime for this strategy.
The speaker states that leveraged ETFs are not recommended, as they are not working for the investor. The speaker suggests that leveraged ETFs are a friend only when they are working, but otherwise, they are not a good investment.
Leveraged ETFs are not capital efficient and should be used as short-term trading vehicles, ideally held for no more than 24 to 48 hours. They are a substitute for futures products and work well for intraday trading. However, holding them longer than this period exposes traders to significant disadvantages due to compounding and decay effects. Futures are recommended for traders with access to them due to their higher capital efficiency.
The speaker explains that while there has been a significant drop in crypto prices, it is not considered a crash. Instead, it is viewed as a reasonable pullback. The speaker emphasizes that there is no panic and that the market is experiencing orderly selling. The speaker also notes that the price has been cut in half from its previous high, but this is seen as a massive move rather than a crash. The speaker does not recommend buying at the current price.
The speaker argues that the current decline in crypto prices is orderly and not indicative of a crash. They compare it to a 'stinger' rather than a 'fender bender,' suggesting it is a temporary setback rather than a fundamental market failure.
The transcript suggests that passive investing, such as buying and holding the S&P 500, has historically provided a long-term return of 6.7% when combined with risk-free cash. Active trading strategies, while potentially offering higher returns, have underperformed over the last 5 years. The speaker emphasizes that active trading should aim for a multiple of this return, but the learning and experience gained from active trading may be worth the risk.
The trader made money back by shorting volatility during the GME meme stock explosion in 2021. The strategy was based on the expectation of a reversion to the mean in both volatility and price. The trader noted that the market's reversion to the mean in volatility and price was a key factor in the success of the trade.
The speaker suggests buying smaller quantities at different price levels to mitigate risk and manage exposure effectively. This approach allows for more flexibility and reduces the impact of any single trade.
The speaker believes that the size of an account does not matter and encourages people with small accounts to start trading with any amount of money. They suggest that even a small amount can be used to buy stocks or other assets, such as fractional shares.
Scaling selectively can lead to significant losses because it disrupts the consistency of the trading strategy. If some trades are scaled and others are not, the overall performance can be negatively impacted.
The speaker acknowledges that short premium trading in crypto may have an edge due to the high volatility and upside skew of crypto assets. However, the downside tail risk is considered to be priced correctly, while the upside risk remains uncertain. The speaker suggests that selling downside puts could be a profitable trade due to the current market conditions and the high premium associated with such instruments.
There are several other stocks that deal with cryptos, including miners like Riot and Mara, as well as companies like Clean Spark Mining (CLSK). However, the speaker notes that most crypto companies are not publicly traded, and the ones that are public are not as prominent as Coinbase, MSTR, or Robin Hood.
The speaker mentions having a small bet with another trader, specifically on the Seahawks. The speaker is uncertain about the line and is open to supporting the bet if needed.
The line for the Seahawks is mentioned as 4 and a half, with the speaker indicating they are unsure if it's correct.
The question is posed as a discussion point, with the speaker suggesting that while Wall Street may be adept at beating lowered expectations, the health of Main Street is uncertain. The speaker implies that the market's performance may not fully reflect the underlying economic conditions of Main Street.
The speaker acknowledges that while Main Street may appear healthy, it's often Wall Street that beats lowered expectations. The speaker suggests that companies typically beat their lowered earnings expectations, which can create a false sense of health in the economy. The speaker also notes that the current market is healthy but dangerous due to low volatility and the potential for unexpected earnings moves.
Selling a put on a stock you want to own involves writing a put option and buying a further out-of-the-money put, which gives the seller the right to sell the stock at the strike price. This strategy is used when the seller is bullish on the stock and wants to own it at a predetermined price. In contrast, buying the stock outright involves purchasing shares directly, which is a straightforward approach. The transcript suggests that buying shares can be a better trade in certain scenarios, particularly when the market is volatile or when the investor is uncertain about the stock's future performance.
Yes, it is a valid choice. However, traders should reassess their assumptions after a big move. The speaker suggests that trading post-earnings can be more advantageous as it reduces directional risk.
The speaker suggests that it's possible for Uber to buy out Delivery Hero, but the likelihood and timing are uncertain. They also mention that the stock price of Apple is expected to be almost $6, and if one doesn't buy them soon, they may never get a chance.
Mark Douglas, author of 'Trading in the Zone', has made a lasting impression on the speaker for his insights into how professional traders treat the market as a numbers game.
The odds were estimated to be around 20% based on a prediction engine. The speaker initially thought the odds were around 40%, but the prediction engine's result of 20% was considered reasonable.
The speaker suggests that corporate debt issuance at this scale could indicate either confidence or desperation, depending on the context. Amazon raising $25 billion in bonds may signal confidence in its financial position, but it could also indicate a need to secure funding before it becomes more difficult.
The speaker expects the stock to trade around 117 or 116 by the afternoon, which would allow for a profitable trade. The speaker also mentions that the IVR is 83, indicating that the market is pricing in a significant move.
The speaker suggests trading SanDisk with one lot and being extremely careful, while hoping not to look at the market. The advice is to enter trades well below or above the mid price, depending on whether buying or selling.
The speaker mentions that SKHY opened at 170 and traded down to 150 on Monday, with the current price being around 180.
The speaker suggests that while raising capital at favorable interest rates is a positive move, the sheer scale of such offerings may indicate overleveraging or a lack of confidence in future cash flows. They note that Amazon's recent bond issuance follows a similar raise in March, indicating a pattern of capital raising that could signal either strategic investment or financial caution.
The shift is due to private equity's long-term focus and ability to evaluate investments relative to other opportunities, while public markets often react to narratives and can be more susceptible to speculative behavior.
Amazon's $25 billion bond issuance is seen as a potential signal of confidence in future earnings or an expensive AI arms race. The speaker suggests it may indicate the latter, highlighting the potential for increased costs and reduced profitability due to AI investments.
The transcript suggests that upward market movements are often seen as expected, while downward movements require a reason. This implies that market participants may have a tendency to anticipate upward trends and are more cautious about negative outcomes, which can influence their trading behavior and expectations.
The speaker explains that the issuer of an ETF is not concerned with the buyer's needs or the product's value to the public. The ETF is a wrapper to sell something to private entities, such as private equity or unions, rather than serving the public's investment needs.
The market is experiencing mixed performance, with some indices like the Nasdaq and S&P 500 showing declines, while others like Bitcoin and Ethereum are rising. The speaker notes that the market is in a rotation phase, with certain stocks like Apple, Amazon, and Microsoft performing well while others like AMD and Microsoft are underperforming.
The speaker states that there are more ETFs than stocks, with 4,873 ETFs compared to 4,400 individual stocks. This is contrary to the speaker's initial belief that there would be more stocks.
Understanding the underlying assets of an ETF is crucial because it helps investors avoid potential risks associated with not knowing what they are investing in. The speaker emphasizes that the financial industry's ability to package nearly any exposure into something that trades like a stock can be misleading, and investors should take time to understand the actual assets they are investing in.
The speaker answers that they have not broken the rule of exiting a trade if it reaches a predetermined number. They emphasize the importance of sticking to this rule to maintain discipline in trading.
The speaker mentions that questions can be submitted to 'lostdog.com' for a chance to be featured as 'one lucky dog'.
Tom and Scott's watch list includes SPX, IWM, Qs, Bitcoin, oil, ES, micro gold, Nasdaq, micro silver, VIX future, bonds, Apple, AMD, and Amazon. They emphasize the importance of monitoring futures as leading indicators.
The speaker mentions that Citadel likely interacts with over 50% of the flow on the NYSE, but it is not explicitly confirmed. The speaker states that they did not ask for confirmation, indicating uncertainty about the exact extent of Citadel's involvement.
Financial needs are considered important but are ranked lower than personal satisfaction and professional growth. The speaker suggests that if financial needs are met, other factors like job satisfaction and learning opportunities become more critical.
The time required for a new trader to become profitable has decreased significantly due to advancements in technology and access to information. It is estimated to take a few months to a half a year, as opposed to the years it previously took. However, it is important to note that this varies based on individual learning curves and the strategies employed.
It is important to ask new job applicants if they trade or play the markets, as it can provide insight into their skills and experience. However, the transcript suggests that it is not a deal-breaker if applicants are not currently trading, as long as they are willing to learn and have the potential to contribute to the company's goals.
Selling VIX futures reduces implied volatility as per its definition. However, if VIX futures continue to rise despite selling, it indicates that the market's demand for futures is higher than the supply, which may not align with the definition of volatility reduction.
The speaker mentions that profit targets are typically set at 15-25% of the premium collected when scalping options.
The speaker expresses a negative opinion on ramen and pho, considering them overrated as meals. They mention that while they have had good ramen, they prefer other foods like fried chicken sandwiches or bread bots.
The best way to scale up trading to collect more premium is to first widen the wings of the trade, then increase the lot size. This approach allows traders to prove the concept of their strategy before increasing exposure, ensuring that the strategy is validated before scaling up.
The VIX, or CBOE Volatility Index, being elevated indicates increased market volatility and uncertainty. The speaker notes that the VIX is still at a high level, suggesting that traders should expect continued up and down movements in the market.
The use of eight-leg options strategies is not supported by brokers due to the complexity and space they take on trading platforms. The practicality is questioned, as the benefits are minimal for most traders, and the effort required outweighs the potential gains.
Quantum stocks are trading at 25 to 35% of their highs, which makes them relatively inexpensive compared to their previous levels. However, whether they will return to those levels is uncertain.
The Nasdaq is up 250 points.
The answer suggests that while 'ass kissing' may be a factor in some corporate environments, it is not universally applicable. It emphasizes the importance of good work and being a nice, friendly person, which can be mistaken for 'ass kissing'. The response also highlights that the effectiveness of 'ass kissing' depends on the individual's DNA and the corporate culture.
The speaker suggests rolling the short Jan 300 puts down to the March 290s or 290s calls to convert the position into a longer-term trade. This strategy aims to capitalize on potential price movements while managing risk through the credit or even money generated from the call sale.
The SEC published the proposed new pattern day trading rule on January 9th, with the public comment period ending on February 4th. The new rule is expected to be approved 45 days from January 14th, which would be around March 2nd, barring any extensions.
A DT call (Day Trade Call) is generated when a trader makes profits on overnight trades. If a trader has a large account balance and makes a significant profit, they can liquidate everything and trade on the new balance, which generates a DT call. This rule is being phased out, which is beneficial for traders and risk management teams.
The speaker advises that while there was a lot of money made during the rise of meme stocks, the net result was a significant loss across the board. They emphasize that the GameStop event was transformational for the industry and not necessarily bad. They also note that commodity moves, like the current silver move, are different from individual equity moves and are driven by different factors.
The speaker expects a sell-off in silver, similar to the GameStop situation, with potential for a significant price drop. The market could experience a rapid decline of $10 per day for a week, followed by a prolonged period of lower prices.
The speaker discusses a humorous Facebook post about the Steelers' new head coach, Mike Tomlin, and the confusion around the name. It's revealed that the coach's stats are compared to another coach, Harbs, and they are nearly identical, leading to a joke about the team's decision to rename the coach.
The gold-silver ratio trade involves buying gold and selling silver, or vice versa, based on the ratio of their prices. The speaker suggests using a ratio of two gold to one silver, but notes that the ratio may need adjustment based on market conditions. The current ratio is around 47, and the speaker recommends buying five gold to one silver to be neutral in the current market.
The speaker states that there is no point at which you should convert an iron condor to a long straddle. The reason is that an iron condor is a defined risk trade, and converting it to a long straddle would introduce unlimited risk. The speaker suggests that the only time you would consider such a conversion is if your opinion on the underlying asset has changed and you are hoping for a significant move.
The speaker suggests that the return should be reasonable relative to the risk, and this varies depending on the type of business. For high-risk ventures like a restaurant, the return should be higher compared to lower-risk businesses like an established HVAC company. The speaker emphasizes that risk matters regardless of the context, and the return should reflect the level of risk taken.
The risk-reward framework is a method of evaluating decisions by comparing the potential reward against the level of risk involved. The speaker uses this framework to make business and personal decisions, emphasizing that the reward must justify the risk.
The speaker suggests parking cash in T-bills, Treasury ETFs, and short-term CDs. They prefer Treasury ETFs like BIL and SGOV for liquidity and low transaction costs. For non-trading accounts, they use CDs, Treasuries, and money funds, but avoid long-term commitments due to their preference for liquidity.
The speaker would not allocate 10% to any single asset due to the risk of overexposure. Instead, they suggest allocating 1-3% to individual assets, with a preference for dividend-paying utilities or a sector like financials. They also mention that their personal business investments are an exception, where they can allocate more than 10%.
The Nasdaq is currently trading around 26,083, with a recent rally from 68.14 to 715, indicating a 3% increase.
Scott expressed a negative view on crypto, believing it is going lower. The speaker, however, expressed a positive outlook, suggesting that crypto is relatively cheap and encouraging people to invest.
The current spread for crude oil is $9.
The three main revenue streams for brokerage firms are credit/debit interest, commissions, and payment for order flow.
The speaker suggests closing out stale positions and not looking at them again for a long time to maintain a fresh mindset. This approach helps avoid being bogged down by losing positions and allows for a mental clean slate.
Brokerages typically initiate a margin call when the account value falls below two standard deviations from the mean, which is a regulatory requirement set by the SEC and FINRA. This threshold is not set by individual brokerages but is a standard across the industry.
The speaker acknowledges the concept of such a system but notes that it is currently limited in the US due to regulatory restrictions. They mention that eToro has struggled to establish a foothold in the US market and that copy trading is not widely accepted by US regulators. However, the speaker suggests that AI could analyze signal providers' methodologies, offering a potential solution.
The speaker's main issue with copy trading is that it often involves following a single-dimensional strategy, such as buying crypto during a bull market. They argue that this approach is less effective compared to more complex trading strategies involving options and futures. However, they acknowledge that people should be able to make their own decisions and follow others if they choose.
The speaker suggests micro crude (MCL) or micro ES (MES) as suitable future options instruments. They also mention that ZFM6 is a viable option for micro futures trading, but other instruments like ZN or ZB are recommended for longer-term bond trading.
The speaker discusses the difficulty of deciding when to exit a losing trade, using examples like bad investments in private equity and individual trades. They emphasize the importance of recognizing when to cut losses and not holding onto losing positions indefinitely.
The logarithmic method is used to provide a different perspective on historical gold prices, particularly in terms of percentages. It helps in visualizing percentage changes rather than absolute changes, which can be more meaningful for understanding price movements over time. However, it is not commonly used in options trading.
A good percentage return on a month of trading is generally considered to be between 1.5% to 3%, with some suggesting up to 5% for smaller accounts. The target can vary based on account size, with larger accounts aiming for lower percentages and smaller accounts potentially aiming for higher returns.
The new Lost Dog software will be accessible to those on the waitlist shortly, with the first group receiving emails in the next couple of weeks. Users are advised to sign up on lostdog.com to be notified when it becomes available.
The current price of Nike is $45, which is a 52-week low.
The question of the day is whether strong second quarter earnings will disappoint the market. The discussion explores the historical relationship between earnings and market performance, with the hosts noting that it's a trick question.
Historically, earnings have been a toss-up for benchmark indices, with results often within 1% of a 50/50 split. However, in a bull market, earnings surprises tend to lean toward the upside, with most outlier moves occurring upwards. The increased volatility around earnings periods reflects market nervousness, as higher implied volatility in the front month earnings contracts indicates fear. In a bull market, this volatility can be exceptionally good for indices, as the market tends to rally despite the uncertainty.
The speaker suggests that these rotations are driven by large institutions and prop firms engaging in momentum trading. They compare this to the late '90s with day trading houses and short-term swing traders. The speaker also notes that the market has become more accessible due to low commissions, allowing for quick trades on trending stocks.
The speaker recommends learning futures options as the natural next step after trading regular options. They suggest that futures options are a progression from equity options and that trading futures is a different animal. They advise getting comfortable with futures options before jumping into futures directly.
The speaker is uncertain about the implications of Microsoft's layoffs. While reducing costs and eliminating 'dead weight' could be seen as bullish, the speaker notes that the long-term impact is unclear. The speaker also criticizes the way Microsoft operates, suggesting that the company's management practices are not ideal.
The speaker and team are planning to have longer shows and different segments in the future if they receive support from the audience and have enough viewers. They are also hoping to bring back some band members and have more content.
The speaker states that the probability of the SPY closing over 760 by September is 85%, with a note that the prediction engine may provide more detailed analysis.
Eduardo mentions that there are opportunities in the mutual fund industry for individuals with Series 7 and 69 licenses. He suggests that these licenses can be valuable in a sales supporting role, even if not directly in wealth management. He also advises Eduardo to use library resources and online tutorials to prepare for the licensing exams, noting that the process is manageable and the tests are not overly difficult.
The expected move in crude oil by August expiration is $8, with the price expected to stay within a range that allows the broken wing butterfly trade to profit.
The discussion suggests that while Apple and Microsoft may not be considered utilities due to their potential for innovation and asymmetric upside, they are not traditional growth stocks either. The speaker argues that utilities are regulated and have limited upside, whereas tech companies like Apple and Microsoft can still disrupt markets and offer significant growth potential.
The banks start reporting on July 14th, with Morgan Stanley reporting on that day and JP Morgan reporting the following day, July 15th.
The speaker advises exiting the strangle before the earnings date, as volatility is expected to increase significantly around the earnings period. The optimal time to exit is before the earnings announcement, ideally within a few days.
The speaker believes the market is underpricing risk, as evidenced by the recent volatility spikes and the market's apparent indifference to various risks. However, the speaker acknowledges the difficulty in confirming this due to the efficient market hypothesis. The speaker also notes that when volatility is cheap, there is more risk for traders.
Yes, the fear index increases with more volatility and more risk. However, it does not necessarily scare away buyers until a prolonged bear market occurs.
Liquidity is crucial for scalping options because illiquid options result in excessive edge given up during trades. The speaker emphasizes that tight markets with high liquidity, such as SPY and SPX, are ideal for scalping.
The recommended profit target for a scalping trade is typically 25-35% of the assumed risk, which for a $2 risk would be around 50-100 cents.
The speaker prefers options with a short to zero days to expiration (DTE), typically within a week, as they offer more liquidity. For monthly options, the speaker prefers the monthly expiration, but for scalping, the active month is preferred. If the speaker has an opinion on a specific day, the zero-day SPX is used.
The speaker prefers scalping the active month for futures and monthly options for options trading, maintaining consistency within the same expiration cycle.
The future of brokerage will involve simplified interfaces where users can type in their trading intentions, and the system will provide relevant information and options. AI will be used as a tool to assist with questions and provide insights, rather than fully automating trading decisions. The availability of information at users' fingertips will significantly change how retail traders interact with brokerage platforms in the next 6 to 18 months.
The speaker explains that buying power for stocks in a Reg T account is typically double the available cash. They suggest checking the platform's positions tab for a breakdown of buying power requirements and recommend switching platforms if the information is not clearly displayed.
A general rule of thumb is to allocate 20% of the profit to long-term gains and the remaining 80% to ordinary income. This allocation is based on the tax bracket of the individual. However, the actual tax rate may vary depending on the individual's tax bracket and state taxes.
The speaker explains that no trading platform can accurately predict where a future will open until the CME starts taking opening orders. They suggest monitoring European markets via CFD platforms like IG for pre-market movements, as these often provide a more accurate indication of the opening price.
The speaker suggests that these movements are often due to increased activity in the first and last hour of trading, but the speaker also notes that there is no definitive strategy to take advantage of these moves. The speaker emphasizes that being right is the key to profiting from these movements.
The speaker and Scott do not benchmark against competitors to drive decisions. They believe that focusing on creating their own category is more effective than benchmarking against others. They emphasize that benchmarking can lead to a less competitive business strategy.
The speaker believes it is not possible for the Fed to stand pat in such a scenario. They argue that the Fed would have to align with market movements to avoid large arbitrage opportunities. The speaker also suggests that the best way to play for a bounce and lower 10-year rates is to sell puts in ZN.
The speaker explains that in a competitive labor market with high supply of labor, businesses have more control over compensation. If multiple qualified candidates are available, there's no need to pay more than the market rate. However, if the market dynamics change and fewer candidates are available, businesses may need to adjust their offers accordingly.
The speaker emphasizes that there is no single list, but suggests familiarizing oneself with the trading platform, understanding how to place orders, and gaining knowledge through free resources. They recommend starting small, trying different instruments, and focusing on comfort and understanding before risking real money.
The speaker mentions having a dollar for everyone who pitched on ground-breaking medical technologies, indicating a lack of interest in such investments. They also note that they and others generally invest in companies they understand strategically, but medical technology is outside their scope.
The speaker states they would not go into space, but they acknowledge the potential for low orbit ventures if priced correctly. They emphasize personal interest and risk aversion as key factors.
There is no rule on an acceptable debit to pay when buying the guts and selling the wings. The amount paid does not affect the P&L, as long as the theoretical price is considered. The key is how much of a theoretical price is given up around mid price.
The rally was attributed to news about Trump sending his advisors to the Middle East to negotiate a settlement, although the speaker notes that the settlement was one-sided and the troops were already in place. The speaker also mentions that the troops' actions were unclear, and the settlement was not a significant development.
The speaker suggests that traders should be aware of the impact of new products on trading behavior, which may lead to shorter-term strategies. They emphasize the importance of adapting to market conditions and being prepared for potential volatility.
Traders should reduce position sizes due to increased volatility and potential for larger moves. The speaker emphasizes that the risk of a single trade has increased significantly, with moves now ranging from $20 to $50 instead of smaller amounts. This necessitates a more conservative approach, cutting positions down and letting trades run longer to manage risk effectively. The market's behavior is described as rotating flow, where traders chase what's currently hot, which requires adjusting strategies to align with these dynamics.
The speaker advises against comparing performance to the S&P, as it is not a suitable benchmark for measuring trading success. Instead, they suggest focusing on consistent performance and adapting strategies based on market conditions. The speaker emphasizes that the S&P is a broad market index and that individual trading strategies should be evaluated independently.
The speaker suggests selling puts when volatility is high, as this allows the trader to capture higher premiums. Waiting for volatility to settle down is not recommended, as it may result in lower premiums.
The speaker suggests that the best benchmark for an active trader is a multiple of the risk-free rate, typically three to four times. This is based on the idea that active traders should aim for returns that are significantly higher than the risk-free rate, reflecting the added value of active management.
The speaker confirms they are dabbling in Bitcoin, having bought it at around $595. They also mention buying Ethereum and Salana at lower prices, but note that Salana has dropped significantly.
The speaker states that crypto is in a bear market but not dead. They emphasize that the market is in a bear phase, and the sentiment is negative, but there is potential for a reversal.
The expected move for the August 21st 8100 put spread in SpaceX is $32, with the stock currently at $154. The trade has a 96% probability of profit and an annualized return of 30% plus.
The VIX index is used to gauge market volatility. When the VIX is under 19, the market is considered bullish, and when it's over 19, it's neutral. This helps traders assess market conditions and make informed decisions.
The speaker disagrees with the idea of stepping in front of a falling knife, preferring to avoid such risks. They suggest that stepping in front of an explosion is more dangerous, indicating a preference for avoiding high-risk situations.
The speaker discusses the volatility of SpaceX's stock, noting that it has recently dropped and is expected to move into the NASDAQ. The speaker suggests that the stock is currently around $155 and change, having previously been around $135. The speaker also mentions that the stock's IPO price was significantly lower, and it has since increased by 40%.
An option's price is determined by the information available at the time of pricing. It's not about whether an option is cheap or expensive, but rather about the strategy and the implied volatility (IVR). The IVR on platforms like Tasty Trade can help assess if options are priced relative to the stock's volatility. The key is to focus on strategy rather than trying to determine if an option is cheap or expensive.
The PDT rule change potentially increased participation by lowering barriers to active trading for smaller accounts. However, the speaker notes that the numbers at the OC indicate a massive change for retail, with retail options trading possibly up 15% or more.
The elimination of pattern day trading rules has made it easier for retail investors to participate in the markets, allowing them to trade more freely and on a more level playing field with larger accounts. This change is seen as a significant benefit for retail traders, as it reduces barriers to entry and enhances market participation opportunities.
The speaker suggests that defined risk trades are not going away, but they have become more expensive in today's volatile environment. If an account can afford it, there is a reason to try defined risk trades, especially compared to undefined risk strategies like naked calls or puts.
Traders prefer defined risk strategies because they provide a clear boundary for potential losses, which is especially important in volatile markets. The speaker emphasizes that even with larger accounts, traders are often uncomfortable with undefined risk.
The cost of being too passive in trading is often measured in missed opportunities rather than realized losses. This is because defined risk strategies may limit the ability to capture premium flexibility in markets that reward additional risk.
The speaker attributes the US's success in handling the World Cup to the country's ability to organize a large-scale event on par with other nations, despite a negative reputation for certain behaviors. They also mention the record-breaking attendance and viewership as factors in the success.
The increase in margin requirements for SL futures is attributed to market mechanics or potential conspiracy. The speaker suggests it could be due to the notional value of the trade increasing significantly, or the CME raising requirements due to concerns about market stability.
The speaker suggests that while it's important to guide and support children, the focus should be on laying a foundation and allowing them to develop their own path. The speaker emphasizes that developing new skills and meaningful relationships are essential for long-term success, and that the role of a parent is to support rather than dictate.
SanDisk is currently at $2100, having previously dropped to $155.
The speaker checks news from various sources (X, etc.) and mentions that the market's movement surprised them, leading to questioning their own market feelings. They suggest that the data they rely on includes news and market indicators, and they mention the Russell and Dow as additional indicators.
The speaker's risk tolerance has significantly decreased over time. In the early days, they were risking everything daily as a market maker, but now they have a much lower risk profile as a retail trader. They acknowledge that this change was necessary and beneficial for long-term sustainability.
The speaker suggests that if P&Ls are showing success, it's a blessing in disguise as it prevents over-adjusting. If P&Ls are struggling, occasional checks on a phone might be necessary.
Revisions are common, but the speaker does not follow the number closely and cannot determine if it will be revised higher or lower.
The speaker believes the number is likely to be revised higher, with a 58% probability, and mentions that revisions are common.
The speaker is asking why the bid disappears when they attempt to hit it, suggesting that the bid might not be accurate or available at the time of the trade attempt.
SLV is up 50 cents, which is a decent size move. 1%, but it probably was down when he looked at it.
Yes, the speaker does have a Netflix subscription.
For customers, the end user or traders like me as a trader, I think it's a great thing. I know, but you have to ask, you have to tell me which where am I going?
Media consolidation may create a new trading landscape, but traders should be cautious. They should consider regulatory risks even after DOJ clearance, as seen in the Paramount Warner Brothers deal, which is being challenged by 12 states. Traders should be aware that regulatory risks can persist and that prices may not necessarily reflect the true value of assets post-deal.
The speaker suggests that taking money when possible is better than when needed, as it can lead to a better valuation.
The speaker was not bullish and the market action was not great.
It depends on the product. For example, Natty Gas is traded via futures options, while SPX and SPY are options for stocks. Tax advantages exist for SPX, but the speaker recommends trying both and staying with what feels comfortable.
Consumer sentiment is significant because it reflects real-world decisions that impact markets. Even though it's a survey, it provides insights into how consumers are making decisions about spending on essentials like gas, food, and medicine, which can influence market behavior.
Macro events can have a significant impact on markets, even if they are unexpected. However, the extent of this impact is uncertain and depends on various factors.
Bonds and interest rates move inversely. However, there is uncertainty about the current correlation, with some suggesting that both are doing a little bit of this. The speaker believes that bonds are going to break, and markets are going to break as well, with interest rates going up.
A putback ratio strategy with AVGO can be used to manage risk and potential profit. The speaker suggests buying the 310 put if the trade is no longer desired, creating a free butterfly with potential profit.
I think so.
Yes, if you find that you're pushing on a string, meaning that regardless of what trades you make, you're just spinning your wheels, not making or losing any money, it might be time to put this symbol in the penalty box for some short period of time.
The problem was that customers had long positions in Google (GOOGL) with a straddle that expired worthless, resulting in a significant loss for the firm.
You can send questions.
Selling naked puts can be a good strategy for hedging, but it leaves the trader exposed to directional risk. It is more capital efficient than buying options, but requires careful risk management.
The speaker believes that while some investigation may occur, there is likely no wrongdoing to find, and thus no prosecution. They suggest that the CME has the capability to trace the order, but this may not lead to any actionable results.
The speaker expresses concern about the high valuations of companies like SpaceX and OpenAI, comparing them to the dot-com bubble. They suggest that these valuations may be overinflated and that the market risks are significant.
The speaker explains that the position size changes based on conviction. He starts with the smallest increment, typically 500 or 1,000 shares, and then decides to add more based on how the stock moves. The speaker also mentions that he uses a minimum allocation approach and builds up his position over time.
The speaker explains that disconnecting from real-time news involves separating the trader's brain from news consumption and focusing solely on the market tape. This requires discipline and practice, as market reactions often take time to digest.
The speaker suggests that retail traders should focus on the market's current state rather than speculate on future events. They emphasize the importance of trading based on what is in front of them, rather than trying to predict or react to news that may not directly impact the market.
The speaker states that it's uncertain how many more body blows the market could take, and that the guess is as good as anyone else's.
To ensure you're not paying more than the mid price, check your data feeds for consistency across platforms. For liquid assets like SPX, discrepancies are likely due to data feed issues. For illiquid stocks, brokers may take a spread, so consider using larger contracts or checking order execution practices. If discrepancies persist, investigate data feed integrity and broker routing practices.
The NBBO (National Best Bid or Offer) is crucial for order execution. The transcript explains that traders cannot get filled outside the NBBO, meaning they must execute trades within the bid or ask. This is a key consideration for options trading.
The speaker views failures in business and trading as essential learning experiences. They emphasize that failures, especially when analyzed and understood, are critical to progress and success. In trading, the speaker notes that many failures stem from overtrading or poor risk management, while in business, failures often result from poor vetting of investments or following unwise ideas.
Zero DTE (Days to Expiration) refers to options that expire on the same day they are traded. These are typically listed on the platform and have no overnight risk. The speaker explains that zero DTE trades are popular due to their lack of overnight risk and the instant gratification or pain they provide.
The speaker states that it hasn't blown their mind yet because they lack the necessary background in physics. However, they have found quantum proof technology interesting, especially in financial services, and have been actively seeking investments in the quantum space.
The Nasdaq is currently weak, down 250 points, due to underperformance of major tech stocks like Meta, Lou, and Nvidia. The speaker suggests that the Nasdaq's weakness could lead to further declines, especially if volatility remains elevated.
The speaker believes it is very difficult for the S&P's to rally, and the Nasdaq's performance is critical to the overall market movement.
An eight-legged spread is not recommended due to its complexity and difficulty in management. Scaling the original four-legged trade by increasing the size or widening the strikes is a more effective approach.
The speaker emphasizes that the required rate of return on an illiquid investment depends on the nature of the investment. For real estate, a 10% annual return might be acceptable, while for private equity or startups, higher returns are expected due to the higher risk. The speaker also notes that the potential downside is more concerning than the upside.
Natural gas is considered volatile due to its high implied volatility, which is typically in the range of 65-70. It is one of the most volatile futures contracts, making it challenging to trade because of its frequent and large price movements.
The instrument opens down 70 cents due to an imbalance in order flow, where there were more sell orders than buy orders. The electronic book (Globex) adjusts the price to match the orders, resulting in a downward adjustment. This is not a decision made by a market maker but a result of the collective order flow.
The speaker confirms that on occasion, they add an extra put or call to their strangle position, typically an extra put due to the higher risk of upside moves in natural gas.
Adjusting options is better because it allows for more controlled risk management and avoids the complexity and risk of futures trading. Futures can lead to larger losses and make it difficult to exit the position.
The speaker strongly opposes the government taking equity stakes in private companies, arguing that it sets a dangerous precedent and creates conflicts of interest. They view it as a 'mafia-esque tactic' and 'pay-to-play' scheme, where companies are forced to give up a percentage of revenue in exchange for government approval. The speaker believes that government involvement in private companies undermines the independence of these entities and could lead to decisions being influenced by political agendas rather than the best interests of shareholders.
The speaker suggests that while the city of Chicago could take part ownership in the Bears, it depends on the context. If the Bears stay in Chicago, it benefits the city significantly. However, if the Bears move out, the city might lose out. The speaker is skeptical about the Bears moving out of Chicago but acknowledges the possibility.
The SEC approved MicroStrategy's plan because it was a novel approach to raising capital for Bitcoin purchases. No similar structure had been implemented before, and the company was structured specifically for this purpose.
The speaker states that the E-mini options are the only ones that are liquid 24/5, and that the setup would work in E-minis. However, they note that there is only one retail firm that allows trading 24/5, which is the GTH.
Buying power is a percentage of net lick, which is used to determine risk exposure. Buying power is not a fixed risk amount but rather a tool to understand potential risk.
The speaker believes that AI tools will become more powerful and cheaper to use, increasing the value of software companies. They suggest increasing exposure to technology and software-related stocks and careers, acknowledging that they are currently expensive but sees long-term potential.
The speaker believes the market is vulnerable due to its lack of logical movement and suggests that bonds are a safer option compared to stocks. They also mention that they have been shorting certain stocks and are cautious about the overall market environment.
The speaker believes that shark attacks are rare and typically occur only in specific circumstances, such as when a person is bleeding or attacking a shark. They also mention that sharks are not generally aggressive towards humans unless provoked.
The speaker does not claim that Michael Saylor's sale of $2 million worth of Bitcoin is the reason for the market's upward movement. However, the sale is noted as a significant event that could influence market perception.
The speaker believes that the biggest risk to the stock market in the short term is an overexposure to the AI narrative. They argue that the market is driven by hype and speculation around AI, which could lead to a correction or crash if the narrative loses momentum or if the fundamentals do not support the current valuations.
The speaker believes that SpaceX's IPO is likely to open higher due to high demand, but also warns that it may experience a significant drop similar to Cerebrus, where the stock opened at 390 and now trades at 225.
The speaker recommends selling the 75 puts on Netflix (NFLX) for 107, with the expectation that the stock price will remain within a certain range. The trade is considered a short-term opportunity given the stock's volatility and recent price movements.
The speaker is willing to buy Bitcoin at price levels as low as $20, with the goal of holding it for 10 years. The speaker believes that Bitcoin could recover from its current price decline, similar to how gold has historically rebounded. The speaker also mentions that they would buy Ethereum at similar price levels.
The latest time a clearing firm can make an assignment depends on whether the trader is retail or professional. Retail traders have until about 4:30 Central Time, while professionals have until 5:30 or 6:00 Central Time. The Options Clearing Corporation (OCC) manages the exercise and assignment of options, and the final settlement price is determined by the OCC.
The speaker considered the idea of pursuing an MBA and applied to three programs, getting into one. They deferred for a year and later decided not to go, but they do not regret the decision.
The speaker humorously acknowledges the long-standing collaboration, stating that it's been closer to 40 years. They suggest that their survival instincts have been crucial in maintaining the collaboration, and they acknowledge that many others have tried but failed.
To break out of a trading slump, reduce trade size and narrow the trading universe. This approach is likened to a baseball player shortening their swing or an athlete focusing on simpler shots. By reducing size, traders can manage risk and avoid overexposure, while narrowing the universe helps focus on a few key assets, providing clarity and reducing cognitive load.
To break out of a slump, traders should narrow their profit targets, focusing on smaller, more achievable goals. This helps build confidence and momentum, allowing traders to 'train their brain' to take profits more consistently. The strategy involves reducing the number of positions in the portfolio and simplifying the trading approach.
CFDs are perpetual, meaning they do not have an expiration date. However, traders may need to roll over positions, similar to forex trading, where positions are rolled over every night.
The speaker states that while there have been significant daily moves (e.g., 6-8% in a day) during periods like 2008-2009, a 20% move in 2 months is unprecedented and has not been observed.
The speaker believes that Bitcoin futures do not play a significant role in keeping the floor on Bitcoin's price. They argue that Bitcoin futures are largely hedged off and not a speculator's market. The speaker also notes that Bitcoin is classified as 'dead freaking money,' meaning it is held long-term with little intention of selling, regardless of price fluctuations.
The speaker discusses the importance of executive presence, including communication skills, body language, and the ability to engage effectively in meetings. These skills are taught through the consulting business, Presence Command, which focuses on corporate training for executive presence.
Some executives are more likable because they exude confidence and handle challenges effectively, which makes them more credible and inspiring. This confidence is crucial for handling both success and failure, with the ability to handle losing being a significant indicator of a leader's resilience and likability.
The speaker and Wayne discuss whether there was snow in Nashville during the previous weekend. Wayne mentions that he called a friend who expected snow, but he himself was surprised as Nashville rarely experiences snow.
The strategy involves using a securities-backed line of credit to borrow cash using investment portfolios as collateral. The speaker explains that this is similar to a HELOC and allows for quick liquidity while maintaining exposure to investments. They note that this is a common practice in margin accounts and that it can be useful for personal, business, or tax needs.
Using a revolving loan against an investment portfolio is not necessarily nuts if the market continues to rise, as the yield from the portfolio can offset the loan cost. However, it carries significant risk if the market declines, as the collateral can be liquidated. The strategy is effective in a rising market but vulnerable to market downturns.
The speaker explains that for a purely physical hedging portfolio, futures or futures options must be used. This is because the physical commodity is tied to specific futures expiration cycles. The speaker also mentions that over-the-counter markets can be used but are niche and require specific counterparties.
The speaker mentions that their two best indicators are not traditional technical indicators like EMA, MACD, RSI, or volume, but rather the opinions and actions of their friends Scott, Steve, and Tony. The speaker also mentions watching TV personalities on platforms like Yahoo Finance or CNBC and fading their views as indicators.
The speaker clarifies that at the same strike, buying a debit spread and selling a credit spread are essentially the same in terms of pricing and risk. They mention that both are priced the same and are referred to as put-call parity. However, the speaker suggests that traders should focus on selling spreads consistently rather than buying them, as it helps maintain a consistent trading approach.
The speaker suggests that the trader should manage her winners more aggressively and close them earlier to improve her win percentage. The speaker also mentions that the trader's win percentage is only 50%, which is lower than expected, and that this is due to her waiting too long to close her winning trades.
Convexity models in options trading are strategies that exploit the non-linear relationship between an asset's price and changes in its underlying driver. These models are often used to gain from high volatility or market trends, with options exhibiting high convexity due to their disproportionate price reactions to changes in underlying asset prices, especially near expiration. The concept is closely related to volatility dispersion trading, where the idea is to sell overvalued options and buy undervalued ones to create a profitable non-linear payoff.
The prices of futures are influenced by supply and demand dynamics, with no single entity controlling them. The speaker humorously suggests that no one controls the market, and it's a complex system involving massive liquidity and market forces. The answer also mentions that the market is a 'gigantic puzzle' with no single person or entity in control.
During the opening of the futures market, the CME matches buyers and sellers to determine the opening price. The speaker explains that if a trader wants to pay a specific price, the CME will match them with the best available offer, ensuring the price is set at the best rate.
Robinhood was up 289.76, and Netflix was up 375, indicating significant price increases for both stocks.
During big market moves, brokerage firms typically have margin requirements that can handle such volatility. If traders are fully leveraged, they may face liquidation. Most firms have auto-liquidation features for futures, while options are more manually managed. Traders who owe money to the firm must work with the firm to pay it off, and payment plans may be necessary if immediate payment is not possible.
Brokerage firms will work with you to pay off any debt incurred from margin trading. If you cannot pay immediately, they may offer a payment plan. However, if the position is liquidated due to margin requirements, you may end up owing the broker money.
The speaker suggests that the odds of the Fed raising rates are increasing, especially if the conflict continues. They note that raising rates in this environment would likely be detrimental to both the stock and bond markets.
The speaker acknowledges that prop firms can be sketchy, especially for retail traders, due to high fees, limited strategies, and the risk of losing capital. However, they note that professional prop firms can bring liquidity to the markets and are generally beneficial for the markets, though they are not suitable for everyone.
The speaker suggests using a poor man's covered call strategy for Apple by buying a long-term LEAP at the money and selling a front-month call. For Microsoft, the speaker is not long and suggests a long-term trend-following strategy instead of selling puts.
It is realistic to aim for 25% of the collected premium as a source of income, based on extensive research and risk management. This percentage accounts for losses, adjustments, and other factors. For an account size of $300,000 to $500,000, this could translate to a conservative estimate of $2,000 to $2,500 per month, which equates to a 10% annual return.
The speaker acknowledges that this is a common strategy for playing for a return to contango, but notes that it is not the same as simply buying a December CL future and selling a current month CL future. The speaker explains that the two are different deliverables and that the strategy involves a calendar spread. The speaker also notes that this strategy is challenging for retail traders due to capital requirements and the need for precise timing.
The Dow is not at 50,000. The DJX is at 465, and the speaker jokes that the person asking missed it.
Converting a traditional IRA to a Roth IRA is possible, but it's important to consider the timing and implications. If you're approaching the required minimum distribution (RMD) age, which is 73 for those born in the 1960s or later, you may have missed the optimal window for conversion. It's recommended to consult with your financial institution or a tax professional to understand the best course of action. Additionally, once you reach the RMD age, you are required to start taking distributions from your traditional IRA.
The speaker suggests that the discrepancy may be due to transportation costs, which make arbitrage unprofitable. They also note that the situation is unusual and that historical examples, such as the negative oil prices five years ago, indicate that market forces should correct such imbalances, but this has not occurred in the current context.
The speaker humorously suggests they could be a goat, referencing their tendency to make noise and eat a lot, which is humorously compared to the behavior of goats.
The industry distinguishes between transient students and study abroad students. A transient student temporarily takes courses at a different institution, usually domestically, to transfer credits, while a study abroad student seeks cultural immersion in a foreign country. To advertise, one should highlight their experience of seeking knowledge across multiple institutions, which can be a strong selling point on a resume.
The speaker was randomly selected from a group of 20 American kids through a hat-drawing process, where names were picked from a list of members of Parliament who had agreed to take an intern.
The S&P is unchanged, while the Nasdaq is down 250 points.
Stock splits are generally a good thing as they allow more people to participate and make stocks more tradeable. However, the impact on the company itself is considered a wash, and the results over time are random.
Emotional neutrality is an advantage when selling premium on both sides with no directional bias. It allows for a more balanced approach to managing the trade.
The speaker suggests selling puts on stocks like Nike, Uber, Micron, and others, arguing that selling puts is a better strategy than trying to catch a falling knife. They emphasize that selling puts can be a way to profit from volatility and avoid the risk of buying a stock that might continue to decline.
The speaker keeps their short puts and does not make adjustments.
The speaker suggests that stocks under $30 can be viable for trading, but stocks under $15 are less popular for selling premium. They also mention that the liquidity and premium available are more important factors than the stock price itself.
The speaker cannot provide an answer due to potential insider information, but they speculate that it may not happen before the end of 2026.
For an account size of $170,000, the speaker suggests risking no more than $10,000 on undefined risk trades and between $1,000 to $1,700 on defined risk trades. The risk percentage is around 5% of the account size.
SKHY is tradable, and the speaker has traded it a couple of times. The speaker mentions that it's very tradable and that the market there was tradable. The speaker also mentions that the implied volatility is high, but it's not a concern as long as the trader is comfortable with the risk.
The wheel strategy is up to the trader if they want to implement it on oversold stocks.
The speaker suggests adjusting positions daily to maintain a zero beta or similar, and checking delta and P&L for each position.
SanDisk's stock is down $60 at 1288. The speaker mentions it's perfect for a strangle position.
Algo trading is a significant part of the market, with algorithms handling a large portion of trading volume. They are not emotional and focus on mathematical models rather than subjective market direction.
The speaker is considering a short position in Microsoft, but is not yet committed. They plan to short Microsoft if the stock reaches $500 before the show ends.
The speaker suggests that while there is a lack of transparency in private credit markets, it doesn't necessarily mean there's a hidden risk. They mention that these markets are usually tied to interest rates and have flexible variable rates, and they are on the books of the companies involved. However, they also express concern about the private derivatives market being more risky.
The speaker believes that lack of transparency is a risky thing, and that the lack of transparency in the private credit market is not good. However, the lack of transparency in the over-the-counter derivatives market is even worse, with risks that are not visible.
It is possible to arbitrage in illiquid markets, but not in listed places due to lack of fungibility, high fees, and wide spreads. Arbitrage opportunities between prediction exchanges are limited, and holding positions for long periods is not practical for retail traders.
No, AI will not make traders obsolete because the future of value is on content and creativity.
Tom is long Delta, not technically long CL. He is short puts and short calls, with calls further out of the money than puts.
The speaker lists SLV, GLD, and MU as their favorite stocks to trade. They mention that these stocks are popular due to their liquidity and market activity. The speaker also notes that their choice of stocks can vary based on current market conditions and personal trading preferences.
The general rule of thumb is to collect between 30% and 40% of the width of the strikes. This provides a reasonable probability of profit, typically around 60% or higher, while avoiding the risk of collecting more than 50% of the width, which reduces the probability of profit below 50%.
A significant intraday move in the S&P 500 would typically require a major shock, such as a historic failure by a major US company or an unexpected decision by a politician. The speaker suggests that such events would need to be unexpected and impactful enough to affect an entire industry.
The average life expectancy of a CEO on the S&P 500 is seven years.
The speaker explains that the marketplace does handle rate changes by providing signals to the Federal Reserve. However, the Fed's role is to set the actual rates, and the marketplace's role is to inform the Fed of the appropriate rates. The speaker acknowledges that the Fed's role is crucial for stability, even though the marketplace can provide guidance.
The speaker states they have no idea and suggests that while it's possible, the naked straddle has significantly more risk. The poor man's double diagonal is considered less risky but may not outperform due to potential blow-ups.
The speaker suggests that on highly volatile days, profit targets for scalping on the S&P could range from 10 to 20 points. For commodities like crude oil, the target might be $1, while for gold, it could be $5.
The speaker mentioned going long the SPX at a level around 6,400, which was a dip in the market. They later noted that the market tickled 6,666 points, indicating a rebound from that level.
The speaker suggests that while 24/7 markets are becoming more common, the core principles of volatility-based trading remain applicable. They emphasize that there will always be a day for trading, and the timing of entries and exits should be based on volatility patterns. The speaker also notes that most markets are already open around the globe, and the transition to 24/7 trading will be a natural one.
The speaker discusses that AI is not taking jobs away but rather adding jobs in the software engineering space. They suggest that the impact of AI on jobs is not as significant as commonly believed and that individuals should focus on learning and building a strong foundation rather than worrying about job displacement in the short term.
The speaker suggests that MSTR (Michael Saylor) is either a scammer or a genius who has found a loophole in the system where money managers prioritize returns over the actual investment's performance. The speaker implies that the fund's investors may not fully understand the risks involved, and the money managers may not care about the investment's outcome as long as they receive the promised returns.
Market makers decide where to fill orders based on their perceived edge and the liquidity of the market. The midpoint is a starting point, but traders should adjust based on the number of legs in the spread and the market's liquidity. The closer the trade is to the midpoint, the less risk for the market maker.
Oil closed at $84.23, with a price range of $86 to $87 during the day. The speaker notes that the market was volatile, with a significant drop from Sunday night to the previous day.
The speaker suggests getting long Oracle (ORCL) after it has been cut in half over six months, indicating a potential contrarian opportunity. The speaker is short put options on Oracle, expecting the stock to not fall below the strike prices.
The speaker acknowledges the rotation, noting that Meta, Google, and AMD are down, while other stocks are up.
The win rate is not a meaningless statistic. It is important because building a process and methodology to know how to win is valuable. Some people just don't know how to win, and this leads to hoping for outlier moves or lottery tickets instead of focusing on consistent winning strategies.
The speaker suggests selling a strangle with deltas between 16 to 22, and mentions that the expiration could be September or October, with a recommendation to roll to October in a week.
It's better to sell covered calls when the stock is down for the day, as it allows for higher volatility and better pricing. Selling puts into weakness is also preferred.
The 5 DTE includes the weekend and is based on calendar days, not trading days.
The speaker changed the question from closing above 315 to 320, and stated a 70% chance of closing above 320 by Friday.
A strangle in Hood with 80 strike put and 115 strike call for about 240.
The speaker acknowledges that this is a common scenario and that it can lead to significant losses.
Yes, the speaker has experienced this multiple times, including in silver and Micron this year. They mention that such events happen roughly 1% of the time and have occurred more frequently than they would like.
It's a different account. I am not good on the on the I on the iPad. Um moving around.
The speaker suggests that gold's recent performance may be a bounce rather than a genuine flight to quality, given its significant drop and subsequent recovery.
The speaker believes the rally is not based on economic data but is a cyclical trading range.
The speaker suggests that FOMC minutes are often digested by the market, and people attribute market movements to these minutes, even though they are usually in overbought or oversold situations. The speaker implies that the market is already priced in everything, and the minutes are not a significant factor.
The speaker discusses how tariff refunds, such as those received by Apple, can affect corporate earnings. They argue that these refunds are not new information and were already factored into earnings expectations. The speaker suggests that the impact of these refunds on earnings is not as significant as it might appear, as the refunds were anticipated and the market already priced them in.
Buying options is not a fair bet as implied volatility can crush returns before the stock even moves. It does not pay, and the outlier move where it pays is rare and hard to achieve.
The speaker believes that trading earnings is most effective when volatility is high, as this provides the best opportunities. They also emphasize the importance of avoiding buying premium and staying outside the expected move, preferring small wins over large risks.
The speaker believes Bitcoin and other cryptocurrencies like Ethereum and XRP have limited upside and are at or near their cycle lows. They suggest a short-term outlook where the market may sell off, potentially whacking Bitcoin the most. The speaker is long Bitcoin but acknowledges the risks and regulatory environment.
The S&P is up 40, and the market has been trading green on the screen.
The speaker argues that insider trading should not be legal, as it creates a two-tiered system and undermines market integrity. They believe that allowing insider trading leads to a loss of trust and participation in the market.
Reg FD (Regulation FD) eliminated the practice of CFOs sharing non-public information with friends, which significantly affected trading practices by reducing the availability of insider information. This change is highlighted by the difference in Warren Buffett's performance before and after the regulation.
The speaker acknowledges that people often try to get an edge, but argues that the real issue is not the act of trying to get an edge but the impact on other market participants. The speaker suggests that the focus should be on the consequences of such actions rather than the actions themselves.
The speaker argues that insider information can be an advantage, citing Warren Buffett's performance as an example. However, they also note that there are instances where such information is not effectively utilized, as seen in the case of the senators reviewing COVID drugs.
The speaker suggests that Tom is principled because he lives to work, but the speaker disagrees with this approach. The speaker believes that work-life balance is essential for long-term effectiveness and team performance.
The speaker acknowledges the question and states that it's a good question, but the conversation shifts to the broader discussion about work-life balance and company stages, without providing a direct answer about capitalizing on the stock news.
The speaker indicates that they did not consider capitalizing on the SEC's approval of the rule change, as they do not trade brokerage stocks. However, they acknowledge that the change could have significant implications for the retail industry.
The speaker argues that geopolitical events are not directly tradeable as they are often not priced into the market. The speaker suggests that the market reacts to actual events rather than speculation. Regarding Trump, the speaker states that his actions are not meaningful and that the market should focus on the tape rather than geopolitical discussions.
Geopolitical events are predictable and can be traded, as seen with the Russia-Ukraine invasion impacting Lockheed's stock. Market shocks, like the 2020 pandemic, are unpredictable and have a more profound impact on the market.
The amount of options given to employees in a startup depends on the company's funding structure and the value of the options at the time of issuance. In the early stages, options are typically worth little to nothing, and the allocation should be carefully managed to avoid running out of shares. For established companies, options can be valued more significantly, and the allocation should be based on the company's market value.
Employees in startups typically have a higher risk tolerance, as they are willing to accept lower salaries in exchange for potential equity that could yield significant returns if the startup succeeds. This is often driven by the belief in the company's potential and the upside of a successful exit.
The speaker promotes the position that nobody knows anything about the stock market, emphasizing that markets are random and emotional. This view is compared to sports announcers predicting game outcomes, which is deemed equally futile.
The speaker notes that the Nasdaq is down 12.5 points, oil is down three, and the VIX futures and cash are up significantly. The speaker suggests that the market may be selling off further, with a potential drop of 20 points.
The speaker is unsure about the type of shoes they are wearing, indicating a lack of specific information about their attire.
Embracing AI features and technology is important for staying competitive in trading and investing, as the narrative around AI is evolving. However, the market's perception of AI's impact is shifting, and investors should be cautious and consider the changing narrative when making decisions.
The speaker named MacKenzie Scott as a good billionaire due to her philanthropy, while naming Peter Thiel and Elon Musk as bad billionaires due to their controversial behaviors and impact on society.
AI is expected to become critical in trading and investing, similar to how computers became essential. It will be integrated into platforms, and not using it could be as outdated as not using a computer for trading.
AI will provide instant access to expert opinions and insights, enabling individuals to make more informed decisions quickly. This will level the playing field and reduce the learning curve for new traders. However, it also warns of the potential for information overload and the need to filter out noise.
The expected move for AMD in the iron condor trade is 103 points.
Impostor syndrome is a psychological phenomenon where individuals doubt their accomplishments and feel like they do not belong in their professional environment. It is characterized by feelings of inadequacy, questioning one's competence, and believing that one's success is due to luck rather than skill.
Imposter syndrome is the feeling that one is not capable of doing what they are doing, despite being more than capable. It is characterized by self-doubt and the belief that one does not belong in a particular environment or role.
The speaker suggests that even if you follow all the correct procedures, the market may still refuse to cooperate. The best approach is to try to get out of the way and not force the market to behave in a certain way.
Traders should avoid adding to their positions and accept the reality of the market's movement. They should not dismiss the situation as ridiculous but instead address it by managing their risk and adapting to the current market conditions.
Tom uses AI, specifically Claude, for information gathering and to understand how social media impacts trading. He uses it to search for information and to analyze how social media trends influence market behavior.
The speaker believes AI is significantly impacting trading, with tools like prediction, portfolio, and strategy tools being tested and embedded in platforms. They acknowledge the rapid development of AI technology and its potential to influence trading strategies and market dynamics in the near future.
The speaker states that they personally do not like the VIX from a trading standpoint, calling it a 'terrible retail product.' However, they suggest that if one is bullish on volatility, they can sell puts in VXX or buy VXM, the micro VIX future, as an alternative. They also mention that trading S&P options is a cleaner and better market alternative.
The VIX future moved up by $28 to $1790, indicating a significant increase in market volatility expectations. The speaker notes that this is almost a 6% move, highlighting the magnitude of the change.
The speaker suggests that buying copper contracts as a hedge for a short silver trade may not be a reasonable strategy. The speaker warns that if the trade can be exited, it's better to do so, implying that the trade may be invalid if the market moves against the hedge. The speaker also notes that the relationship between silver, gold, and copper as hedges is not well-defined and may not be reliable.
The speaker states that, to a large extent, yes, the technology has been commoditized. However, what matters more is the platform's ability to meet the trader's specific needs, such as liquidity, ease of use, and integration with other tools.
The speaker clarifies that the shift is from quarterly to semi-annual reporting, not annual. They note that quarterly earnings are resource-intensive for public companies and suggest that semi-annual reporting could improve efficiency, though they acknowledge that annual reporting is insufficient for comprehensive oversight.
The speaker suggests that as someone approaches retirement, their risk tolerance should decrease significantly. This is because they have less time to recover from potential losses. The speaker emphasizes that the appropriate investment strategy depends on individual factors such as financial needs, income requirements, and the time horizon for growth. They also note that the difference between investing at 31 and 61 is primarily about the ability to afford losses, not the desire to make money.
The speaker states that there is no reason to change one's trading or investment strategy based on age. If someone has been actively trading, they should continue doing so, and if they have been conservatively investing, they should continue that path as well. The speaker emphasizes that the same strategy should be followed throughout one's life.
The speaker acknowledges that it drives them crazy, but they don't care about the Steelers. They mention that similar statements about baseball also bother them, indicating a general annoyance with outdated or misleading sports statistics.
The speaker suggests that instead of directly criticizing someone's approach, it is better to politely ask them about their strategy and share your own experiences. This can open the door for a discussion and potentially lead to a change in their approach if they are open to learning.
Midterm years are not typically more volatile than other periods, as historical data shows that midterms rarely cause significant market disruptions. However, if there are major political shifts, such as a potential flip of the House and Senate, volatility could increase due to uncertainty.
The speaker states that no one benefits from the market being closed during the weekend. They argue that the closure does not lead to any monetary gains for market participants, as there is no trading opportunity during this time. However, they mention that firms may use the downtime for software upgrades or other activities, but this does not translate to direct financial benefits for traders.
The speaker acknowledges that making money is better than not making money, even if inflation outpaces gains. They argue that inflation is a fact of life and that outpacing it is important, but better than zero. Leaving money under the mattress is a losing strategy, and the focus should be on acquiring and building wealth through active strategies.
The component of human psychology affecting silver's movement is momentum, driven by investors' collective actions and sentiment. This momentum leads to price increases as more investors pile in, creating a self-reinforcing cycle.
The speaker suggests that the market is not responding to the Fed's actions because the Fed maintains control over the long end of the curve, and there is no immediate repricing of risk. The speaker also notes that the market is more concerned with how the current Fed chair, Powell, handles his role rather than who the next chair will be.
Participants can enter the contest by joining the wait list and filling out the form. The contest is open for a few more weeks.
The speaker mentions that the ZB (likely the 10-year Treasury bond) traded in the 107 handle, which is a reference to the price level. They suggest that this is a guaranteed rate hike, indicating that the elevated yields are a sign of anticipated interest rate increases.
A meltup is a term used to describe a market rally that is more intense than a regular rally. It is characterized by a significant increase in prices over a short period, often leading to a rapid and substantial rise in the market.
IVR is available on the platform but is mislabeled as IBP (implied volatility percentile). It can be found in the drop-down menu or by contacting support. The speaker uses IVR for consistency and context around implied volatility.
The speaker suggests that using the VIX as a gauge is useful, but prefers forward/VX for daily volatility movement. They note that the VIX predicts future closing values, while forward/VX reflects daily changes. The speaker emphasizes consistency in using a single metric.
The speaker says that the line about small really being big is their big line.
Because I listen to ideas and value them regardless of their source.
It's a sign of potential AI investment, but the speaker is skeptical about it being a bubble.
Usually you get a V spike on a down day, but you'll get a V spike in ETFs like the Q's and SPY. You might actually get a little bit of volatility contraction in some of the stocks.
The decision is subjective and depends on volatility. In high volatility, shorter-term options (30 days) are preferred. In low volatility, longer-term options (60 days) are preferred to synthetically increase volatility exposure.
Rising leverage can be a sign of confidence as it indicates investors are taking on more debt to invest. However, it also makes the next selloff more dangerous because increased leverage can amplify losses during market downturns.
The speaker discusses selling puts in the Q's, 45-day SI puts, and NQ futures, but the answer is not fully provided in the transcript.
They are similar in terms of buying power and leverage, but NQ is more capital efficient.
The speaker does not have thoughts on BU, stating they discussed it earlier and prefer being long rather than short.
It takes time. IVR really works after one year, but after six months, you can kind of roll with it because it's probably going to be pretty fair. But a year, everything we do with existing stocks is goes one back one year in time. Now, we you could go back longer, you can go back two years or three years, but I don't think it's as effective. I think one year, we did a lot of research on this, one year is the most effective statistic um when it comes to IVR. If you're using like things like beta or stuff like that, you can use three months or six months, but if you're using IVR, I think one year is probably the most accurate. It's subjective, but it's probably the most accurate. SpaceX, I would say after 6 months, you're probably good to go.
The speaker suggests preferring ETF options for high-level trading but recommends futures for specific commodities like oil (CL) and gold (GC) due to liquidity and tradability. ETFs are preferred for certain assets like silver (SLV) and gold (GC) based on liquidity and tradability. The key factors are liquidity, tradability, contract size, and risk leverage.
Hood is the speaker's best performer this year. They buy Robin Hood on every down tick and sell puts on every down tick. They also sell puts in Coinbase when the stock gets to around 140, under 150ish.
The speaker suggests that if ES (E-mini S&P 500) has an IV percentile around 31, SPX (S&P 500) should be in a similar range. If not, it indicates a potential issue with the data feed or platform.
The speaker mentions checking out 'atsnoff on money' on their YouTube channel.
The go-to strategies include premium selling in AMD and SpaceX, and monitoring market movements for potential trades.
No, it doesn't matter. The board's votes are aligned with management, and passive investors like BlackRock and Vanguard are unlikely to challenge management. The optics of such a move could be disastrous for the company, but it has no real influence on markets.
In a fast gap, the first move you can make is if you want to go inverted, just to flatten out your deltas, go right ahead. And then after that, just kind of refix just fix it when you get a chance.
Goals change with market conditions, such as high volatility or low volatility. Trading is an art and science, and adjustments are made based on market changes.
It should make you feel good, but always be aware of what you're doing. It depends on what you did. Taking the risk, was the risk reasonable for the return that you got and what it might teach you is, you know, what? You're comfortable taking more risk. So, you know, you might have thought you just were stuck in a rut grinding and all of a sudden you go, 'Wow, I like this.' Now, if you think that it just happened and the stars aligned and seven things had to happen which are all unusual and they happen, you might want to pull that back a little bit. What I wouldn't do is keep pressing. I What I wouldn't do So, if you took some more risk, you're comfortable there, say, 'I'm okay keep some of that risk, taking a little bit off, maybe not going back to where you were, but hopefully you'll learn from it.' And I wouldn't be terrified. I'd just keep in the back of your mind, 'Oh, you know what? I'm going to average, you know, um $1,000 or $2,000 or $5,000 or $10,000 a week.' It just doesn't work like that. So, what happened to you here is actually more common and especially most investors, they make a lot of their money, and most investors and most traders make a lot of their money in in
It depends on how quickly it happened and how much time you have left. If the position was against you and it comes back, you might leave it if you still believe in your original thesis. If it was a quick recovery, you might close it and move on.
The risk is the market makers on, and the chance of making 50% of the trade is close to 88%.
The speaker prefers private companies as they are easier to operate, especially in regulated spaces. They have never gone public with the intention of selling the company, and it happens naturally when the business is acquired or listed.
The best time to put on a delta neutral strangle is when implied volatility is really high. Adjust the strangle whenever you get a little bit uncomfortable. If one delta gets to two times the other delta, adjust the position to neutralize it.
The speaker suggests that while the market is experiencing a strong upward move, it's unclear if this is a sustainable trend. They caution that until there are signs of a pullback or a crack, entering the market could be painful.
Roll up the untested side (put spread) with 44 days to expiration. The speaker suggests sitting on the trade unless the thesis changes.
Prediction markets are seen as a novelty wrapped in crypto rails, with high fees and primarily used for gambling. They are not considered real financial markets due to their speculative nature and high costs.
Wash trading is the practice of creating artificial volume by placing trades that cancel each other out, often to inflate the appearance of market activity. It can be incentivized by exchanges to attract market makers and create liquidity.
Viewers want to see the hot product, which creates FOMO and can lead to bad markets.
Maintaining fair markets is crucial for public trading platforms, as they are responsible for the environment in which trading occurs.
The S&P 500's quarterly rebalance involves adjusting the index's constituent stocks, which can lead to mechanical buying from index funds that must own the stock regardless of valuation. This can create market movements as funds adjust their holdings.
The inclusion effect was historically substantial, but it has weakened as hedge funds and Wall Street desks increasingly anticipate likely additions before they are officially announced.
The speaker does not trade earnings, but they have done trades related to specific companies like McDonald's and Intel.
Covered calls, selling puts, shorting puts, bear call or put credit spreads, and micro futures.
They should be happy for trying and learning from the experience.
The market is experiencing significant volatility, with the S&P 500 down 30 points at the opening, rallying to a 15-point decline, and then falling further to a 65-point decline. Other assets like gold, silver, and Bitcoin are also down, while the VIX is up.
A whippy day refers to a day with significant and rapid price movements, often characterized by large swings in either direction. The speaker provides examples of such days, including a 2% down opening that rallied back to close up 2%.
The technical issue caused the OEX to remain open after equities closed, leading to a put exercise that resulted in a $25,000 fine and regulatory violations. The speaker was fined and faced ongoing legal consequences.
A public profile can influence compensation decisions, with companies potentially using it to assess candidates' suitability or value. However, the impact varies; a public profile can both work against and in favor of an individual, depending on the context.
The transcript states that knowing one's worth is crucial for negotiation, even if it's not always possible to force an employer to pay more. The speaker argues that if enough people refuse to accept a low offer, employers may be compelled to increase their offers. This implies that understanding one's value is a key factor in achieving fair compensation.
The historical database is considered accurate to the extent that it reflects 2025 government numbers, but it is not perfect. The speaker acknowledges that the database is adjusted for inflation and other factors, but it is not guaranteed to be 100% accurate. The accuracy is subject to market changes and the availability of updated data.
Pay transparency is viewed as a positive force in the workplace, as it provides more information and can motivate individuals. The speaker argues that transparency is always beneficial, even in scenarios where unexpected information might be undesirable, such as discovering a terminal illness.
Futures and stocks are preferred for scalping due to higher liquidity and lower transaction costs. Options are avoided because they require more edge and can reduce profitability due to the cost of entering and exiting positions.
Yes, a true scalp is defined as an intraday trade. However, there is a caveat that if a large move occurs at the end of the day and the trader did not believe in it, they would fade the move and cover the position as soon as the market opens.
54% of hitters who challenge have been right so far.
Profit and loss targets are set based on the day's range, with profit targets at 25% of the range and loss targets higher than profit targets. The speaker prefers a range of 30-90 points for the S&P, with profit targets at 10-15 points and loss targets at 15-20 points.
The speaker considers major sports such as baseball, football, basketball, and hockey as real sports. They are borderline on soccer, which they refer to as football, and consider tennis and golf as real sports. They are uncertain about rugby and other sports.
No, there is no cancel of close in place.
The speaker believes passive investing is higher now than ever before, citing that retail equity volume makes up about 30% of equity volume and that passive index fund tracking funds account for 54% of total assets under management.
Selling a 30 delta put collects significantly more premium compared to a 16 delta put. However, from a theoretical standpoint, the riskreward profiles are similar. The choice between the two depends on the stock price; for expensive stocks, the 16 delta put is preferred, while for cheaper stocks, the 30 delta put may be more practical.
The speaker states that there is no difference between the two strategies, but he does not know the answer definitively. He also warns that traders may fall in love with the additional premium from selling puts on inverse ETFs, which could be a false sense of security.
The speaker mentions that several futures markets have become more accessible and interesting for retail traders, including gold, S&P 500, NASDAQ, crude oil, and bonds. The introduction of micro futures over the past seven to eight years has democratized the futures market, making it more attractive for retail traders.
The speaker suggests using a two standard deviation move as a guideline and staying in the trade if the expected move is within the statistical probability of profitability.
The optimal way to manage any trade is to roll up or down the untested side if there is one, or add one if there isn't. Alternatively, rolling out in time reduces risk and adds duration, giving more time to be right. The key is to reduce delta risk without adding more capital.
No, the speaker advises focusing on the effectiveness of the covered call strategy rather than trying to mimic the stock alone.
Crude oil is up 256 this morning.
To profit harvest with short-term options, aim for the midpoint of the time duration. For weeklies, target midday Wednesday optimally. If trading on Fridays, consider Tuesday or early Wednesday. Avoid carrying positions past midday unless trading dailies, in which case avoid going past 11:00 AM central time.
Yes, it's part of the cleanest way. However, the problem with these funds is that you can't do tax harvesting with them, and it's much harder for the funds. It's recommended to talk to your tax advisor for clarity.
The speaker suggests that oil prices being higher should lead to a lower market, but this hasn't been observed. They question at what point the effect of oil prices on the market stops being considered.
A margin call becomes likely if the position is too large relative to the account size, typically if using 3 to 5% of buying power. It depends on the stock's position relative to the strike price and the delta of the options. If the stock is at the money, the delta is 50%, and the position should not be in a call unless it has moved significantly in one direction. It's crucial to check buying power allocation to ensure positions are not too large.
Agree, but first of all, this is a stock that's actually acting more like bullish stocks in yester year.
Not great.
If people rotated into these, it would be bearish as rotations typically happen at the bottom, not the top. The speaker suggests that rotations are a sign of market correction and not an indication of a bullish trend.
The S&P is down 15, and the NASDAQ is down 120.
The speaker suggests that if the trader is making money with their current strategy, they should continue it. They also mention that trying a small portion of capital in a different approach could be beneficial, but caution against abandoning a winning strategy.
Yes, the speaker acknowledges that they have experienced this situation with their large accounts.
The divergence indicates that the market may not be reacting to earnings as expected, and it may affect trading strategies.
A market where everything is overvalued or inflated.
The divergence suggests that IBM is underperforming relative to the market, prompting the speaker to consider buying software stocks at discounted prices.
The speaker mentions having short puts in SPY that they don't touch, and also holds stocks in companies they built that are now public, which they don't trade or hedge.
The Iron Bowl is a rivalry game between the University of Alabama and the University of Auburn, typically played on the day after Thanksgiving. It's a significant event in college football, with the town shutting down and being a huge deal.
The trade was found on the high IVR list, not the high option volume list. The user might have been looking at the wrong index (e.g., Nasdaq or S&P 100) or sorted the list incorrectly.
Focus on futures markets as the leader, avoid fading intraday moves unless it's a strong reversal, and avoid buying individual stocks that are down significantly intraday.
It's very small.
The speaker asked if the listener would go to a side knot for a discount.
I did a trade that it that's a week long. It'll be instant gratification. It's the baby.
The decision to take profits is not solely based on duration or price, but involves other factors as well.
Yes, the collar strategy involves selling calls and buying puts to limit both upside and downside risk.
The speaker states that the new exchange does not hurt traders and that it is beneficial for the market by increasing competition and potentially lowering fees. However, it is noted that for retail traders, the impact is minimal.
People start exchanges because they can be worth a lot of money. Exchanges provide value by allowing firms to offset other market activities and reduce hedging costs. They also create competition, leading to lower fees and better price improvement for customers.
The speaker states that profit taking decisions are not based on duration but on the success of the trade itself. They also mention that profit taking is not about letting profits run but about managing trades effectively.
The speaker acknowledges the question and states that it's an ongoing debate, referencing Nassim Taleb's work on black swan events and the importance of risk management. They emphasize the need for a consistent, high-probability approach with limited profitability.
The speaker is skeptical about single stock futures, noting their rocky history and past failures. They mention that these futures have not worked well in the past and are unlikely to succeed again, despite the CME's attempts. The speaker also notes that the CFTC does not allow the CME to offer them directly, but other firms can.
The live podcast with Dylan Ratigan is scheduled for today at 11:00 and can be heard on Spotify or on X.
The market is in a state of volatility with significant declines in commodities like gold and silver, while the Nasdaq is noted to be in a crash despite minor gains. The speaker also mentions that bonds are experiencing a massive rally.
The speaker acknowledges the question as interesting but does not provide specific research or data. Instead, they use the analogy of entrepreneurship versus corporate employment to discuss the concept of defined and undefined risk trades.
The speaker states that there is no universal definition for price extremes, and it is a subjective process. They mention that traders should look for hyperbolic moves or extreme volatility, which are personal to the trader. The speaker also notes that implied volatility can be a factor, but it is not a definitive indicator.
Yes, selling options is considered the opposite of asymmetric risk. When you sell options, you are taking on the risk of unlimited downside while capturing a defined profit. This is the opposite of buying options, where the upside is potentially unlimited and the downside is limited. The speaker explains that this is akin to being the insurance company, where you take on the risk for a defined premium.
The transcript references a study suggesting that managing early 21 days to expiration or at 50% profit is most efficient for capital use. However, when a position is underwater, the strategy shifts to focus on risk management and potential recovery. The exact methodology and sample size of the study are not specified.
Scott was allowed to trade on the platform, and the company supported and promoted trading among its teammates. However, there were certain regulations that required compliance monitoring of trades. Pre-trade approval was not required, and trades could be made without restrictions, provided they were connected to a brokerage firm for compliance oversight.
The speaker states that they have not heard of hourly expiration options coming anytime soon, but if they do, they would not be surprised. They suggest that if they are introduced, they should be cash-settled and not settle to stock.
Seven head coaches have been fired.
The transcript discusses the process of breaking into the investment banking industry, including shadowing for 3 days, obtaining licenses over a 6-month period, and learning the business. It also highlights the importance of networking and the analytical and sales aspects of investment banking.
The speaker believes that the efficient market theory outweighs macro risks, arguing that macro events are unpredictable and not always priced in. However, they acknowledge that macro events can have significant impacts, as seen in historical examples like liberation day. The speaker suggests that focusing on market prices and price movements is more practical for traders than trying to predict macro events.
The speaker suggests that a working software model is more valuable than a business plan or pro forma, as it demonstrates viability. However, they emphasize that the most critical factor is the credibility of the person presenting the idea, rather than the document itself.
The speaker explains that while ES and NQ have current notional values (ES at 1250 and NQ at $5), there is a possibility of a contract value change if the index breaches certain levels. However, the speaker notes that it is highly unlikely for the exchange to split the contracts, as it creates a nightmare for customers and legacy systems. Instead, the speaker suggests that creating a new product is more likely.
The email address for the mailbag is oneluckydog@lostdog.com.
The question is about the difference between delta dependence and delta neutrality in trading. The answer explains that delta neutrality is a common approach in trading, while delta directionality is also possible, depending on the trader's strategy.
The speaker explains that skew is typically managed by adjusting the delta of the strike price you're long or short, rather than using an uneven ratio of contracts. If the trader is bullish, they should short a bigger put, and if they're bearish, they should short a bigger call. The speaker also mentions that they occasionally use an uneven ratio of contracts, such as selling three puts for every two calls, if they're slightly bullish.
The speaker suggests using a 'poor man's covered call' strategy, which involves buying a long-term LEAP and selling a near-term out-of-the-money call against it. This reduces the cost of the LEAP by leveraging the lower cost of the near-term option, improving the basis of the long-term position.
The speaker suggests that retirees should consider a balanced portfolio, mixing risk-free assets (like cash) with higher-return investments (like the S&P 500). They recommend a mix of 30-40% risk-free and 60% higher-return assets to achieve a target return exceeding 7-8%.
The speaker is not a polyglot, only fluent in two languages, and enjoys learning languages for their utility in fields like medicine and law. They mention Latin as a root language of many others, but note that it's not spoken by many.
The ideal delta for selling puts with 45 DTE is generally between 16 and 25, with 22 being the most optimal. This range balances safety and profitability, capturing the sweet spot of the decay curve. For earnings events, lower deltas (e.g., 7-10) are preferred due to higher premiums.
The pie icon with a piece coming out indicates whether earnings are scheduled before or after the market bell. If the icon is pointing up, it means the earnings are after the market bell. If it's pointing down, it means the earnings are before the market bell. The symbol for Microchip is MCHP, and the icon appears between February 20th and February 27th.
It can be more profitable to trade by selling volatility with short puts and short calls in TQQQ due to higher liquidity in the underlying stock. However, the options in TQQQ are less liquid, which may affect the edge and risk profile. The underlying stock and options markets are influenced by the same models, but liquidity differences can impact trade execution and edge.
The speaker refers to puts as 'schmutz' (garbage) because they have been frequently sold in the market over the last 20 years, often to collect premiums. This implies that the practice may not be sustainable in the long term, especially if there is a market correction.
It is recommended to consider the job offer but also explore other opportunities. The advice includes evaluating the job's potential for growth, the company's reputation, and the overall package, including salary, bonuses, and benefits. It is suggested to either accept the offer or continue searching for better opportunities, depending on the individual's confidence in their abilities and the job market conditions.
The speaker and their friend Jules attempted to sell a strangle in every strike of the S&P, which resulted in a significant loss. The trade was based on a lack of attention to volatility levels and market conditions. The trade idea highlights the importance of understanding volatility and market dynamics before entering complex options strategies. The failure of the trade serves as a cautionary tale about the risks of overleveraging and not considering market conditions.
The speaker believes that politicians are unlikely to have a bullish opinion on cryptocurrencies after this incident. They argue that the use of crypto for criminal activities is unlikely to be effectively regulated, and the market has already shown a significant selloff, indicating a bearish sentiment.
The speaker states that they do not like Costco stock at these levels, but they do like the stock in general. The speaker mentions that Costco stock got super cheap and has been on a tear to the upside.
The speaker expects Coinbase to move by $12 by Friday, with a potential range of 104 to 457 for the year. This is based on the current price of 150 and the anticipated earnings report.
The core portfolio should be tailored to individual preferences, with the satellite portion involving writing calls against longs and substituting some longs with short puts to lower basis. The rationale is to improve basis through strategic options positioning rather than relying solely on dividends.
The speaker estimates that $100,000 in 1980 would be worth around $390,000 today, but notes that the market environment has changed significantly, with higher capital requirements and different trading dynamics.
The speaker explains that resting futures orders are typically used to close positions while sleeping. They do not place new buy or sell orders to open during overnight hours due to the uncertainty of market movements. However, they may place resting bids or offers to close positions if they are long or short.
To replicate a leveraged ETF position using futures, one must determine the number of shares typically traded and the daily movement of the ETF. For example, SSO (a 2x leveraged S&P 500 ETF) can be approximated by a certain number of S&P futures contracts. The exact number depends on the ETF's performance and the futures contract's price movement.
No, you cannot buy a forward-dated MEES future. Instead, you can roll the futures contract quarterly (March, June, September, December) to maintain exposure. Rolling is a simple process that takes just a few seconds and is more efficient than holding a leveraged ETF.
The speaker suggests that if you have enough cash to cover day-to-day expenses, you should max out your 401k contributions. However, if you have leftover money after meeting the employer match, it should be allocated to an IRA. The speaker also mentions that trading should be done in a regular margin account rather than an IRA, as they prefer less oversight and more flexibility.
The speaker explains that while put skew is common, call skew can also occur, especially in indices and ETFs. However, the skew can change at any time and is influenced by money flow, not just institutional or retail traders. The speaker notes that 90% of the time, there is call skew, but this can vary.
The speaker acknowledges that when younger, they took more risk without fully understanding the implications. They suggest that with more experience and accumulated wealth, they would approach such risks differently, emphasizing the importance of age and experience in risk management.
Steve confirms that he has watched the episode on the topic of elected officials trading.
There is a relationship between VIX futures and the S&P 500, but it is not consistent and can deviate, especially during volatile market conditions. The speaker notes that while there is a correlation, it is not reliable enough to be traded as a strategy due to its variability.
The most common reason is that these individuals may lack the necessary mindset or adaptability for trading. The speaker notes that even highly intelligent people, including those with advanced degrees, have failed in trading due to factors like lack of discipline, dedication, or an unsuitable attitude toward risk and money. The example of a golf match illustrates how personal attitudes toward money and risk can significantly impact performance.
The speaker suggests that the percentage of a portfolio allocated to crypto depends on the individual's age and risk tolerance. Younger individuals, such as those in their 20s, might allocate 80% or more, while those in their 30s might allocate 50-60%. The speaker's son, who is 31, has 100% of his portfolio in crypto, while the speaker himself has 60%.
The expected move for HOOD after earnings is 8 bucks, based on the current price of $87. The speaker is short a bunch of puts and is fingers crossed for the outcome.
The speaker mentions they can handle ladders up to 5T (likely a typo for '5 feet') max, but only if leaning on something. They also mention not being comfortable with heights and avoiding ladders whenever possible.
The speaker questions the value of digital assets compared to traditional investments like Microsoft, suggesting that the difference lies in the potential for growth and the unique characteristics of digital assets. The answer implies that while both can be considered 'cheap,' the context and market dynamics differ significantly.
The speaker does not trade SOFR futures, as they are not suitable for retail investors. The speaker explains that these instruments are primarily used by institutional traders and banks for hedging purposes.
The speaker argues that digital assets, such as Bitcoin, have long-term potential over a 2-5 year horizon, while software stocks, such as Microsoft, offer more tangible opportunities due to their established market presence and potential for growth. The speaker suggests that the market may not validate long-term predictions as expected, but the potential for capital appreciation remains.
Digital assets are considered a non-correlated asset class with higher volatility relative to the S&P 500, offering potential for greater upside. However, their value is primarily driven by scarcity and investor engagement rather than intrinsic utility. The speaker argues that the price does not necessarily revert to previous levels, and the value is subjective.
The speaker humorously asks if the audience got everything they wanted, implying that the trades discussed are profitable but require effort and execution.
Yes, AI is expected to reduce fees in financial services by streamlining processes and reducing the need for human labor. This is because automated systems can handle tasks more efficiently, leading to lower operational costs for firms.
The speaker states that the AI assumes the market goes up every day, which is a simplistic and potentially flawed assumption. This implies that the AI's strategy may not account for market volatility or downturns.
The speaker suggests starting with YouTube and Instagram for business growth, as they offer broader reach and better monetization opportunities. TikTok is mentioned as a platform with high view potential but difficult monetization. The key is to find a niche, maintain consistency, and engage with the audience. The speaker also emphasizes the importance of hiring knowledgeable individuals to manage social media efforts.
The speaker suggests that there is no historical truth to the summer slowdown, stating that it is random. However, they acknowledge the 'vacation effect' where trading volumes may drop due to reduced market activity during the summer months.
July is historically a strong month due to strong second-quarter corporate earnings, which typically support market performance. This is an outlier compared to June, which is historically weaker.
The speaker mentions that SanDisk (SAND) has earnings, but they haven't traded it in a couple of years because it's not tradable. They also mention that the last time they traded SanDisk, it was up 142, and upcoming events include earnings on 813.
The speaker confirms they are still short the stock, but acknowledges that it is not working well.
The speaker discusses that in most deals, both sides claim victory, even if the deal is not perfectly fair. They note that this is common in sports trades, business buyouts, and financial transactions. However, there are instances where one side may feel the deal is not favorable, but both sides still claim it was beneficial.
The speaker estimates the ceasefire will last less than 48 hours, with the possibility of it ending by the weekend. The speaker suggests that someone will blink and the situation will escalate.
The speaker suggests that it will take weeks or months for oil prices to return to previous levels, as the market is in a state of consolidation or correction. The speaker also mentions that the price increase is significant, with oil prices up 50% from the start of the rally.
The speaker discusses several historical market reversals, including the one during the 2016 U.S. election, the Desert Storm event, and the silver and gold market moves. The speaker acknowledges that the reversal during the 2016 election was significant, with the market moving from a decline to a sharp increase. The speaker also mentions the silver and gold market moves as notable reversals.
The transcript discusses whether staying in a job where the company is great but the business isn't doing well is the right decision. It suggests that if the business isn't improving, one should consider leaving, but also emphasizes the importance of loving what one does.
Salary is less important for early career stages when learning and working extensively are more valuable. It becomes more significant as one gains experience and leverage, allowing for better salary negotiations.
The field of study does not significantly matter after a few years out of college. The speaker emphasizes that skills and adaptability are more important than the specific degree held. However, the initial education may still have value in terms of friendships and personal development.
The speaker questions the rationale for wanting gold to crash after midterms, suggesting that the current market sentiment around gold is driven by uncertainty and the potential for a shift in market dynamics. The discussion highlights the volatility of gold prices and the factors influencing its movement, such as economic conditions and investor behavior.
The answer emphasizes that there is no standard answer to this question and it is highly subjective. However, it suggests having a game plan with predefined guardrails, such as profit targets and loss limits, based on the trade's nature (scalping vs. longer-term positions). It also mentions the importance of consistency in managing losses and not letting losses exceed gains.
The speaker states that 100% of his trades after he covers them turn around, but he acknowledges that the national norm is likely around 50%. He also mentions that about 80% of all trades will be losers at some point, but 50% of those losing trades can turn around if the trader stays in the trade.
The speaker states that they do not use stop limits regularly, except in extreme situations where they cannot monitor the trade, such as when sleeping. They also mention that they rarely adjust defined risk trades.
The speaker states that they rarely adjust defined risk trades, with 90%+ of the time they do not. They mention that adjustments are more common for undefined risk trades. The speaker also notes that adjustments are typically made for synthetic strangles or iron condors under specific conditions.
The speaker advises against buying stocks during a rally, suggesting that the best time to buy is when the market is weak. The rationale is that buying during a rally is driven by FOMO and may not be sustainable if the trend reverses.
The transcript indicates that viewers can email questions or request specific topics to be covered by sending an email to oneluckydog@lostdog.com.
The speaker recommends widening the spread first when scaling a strategy. This is the most cost-effective way to add buying power and risk, allowing for additional contracts or other forms of buying power.
Rodrigo suggests that the choice between concentrating iron condors on a few expirations or laddering across many depends on the current state of volatility. If volatility is low, laddering across multiple expirations is preferred to synthetically create higher implied volatility in longer durations. If volatility is high, focusing on near-month expirations is more effective. The strategy involves opening one iron condor per day, with a focus on the front month and the next month.
The speaker suggests using both the high and low IVR plots to determine the current position relative to the implied volatility range. This helps in making informed decisions about the strategy.
Lost Stock is a platform that offers a free service for the first year, with the first 50,000 subscriptions given away. It includes features such as portfolio optimization, real-time portfolio tracking, and career path optimization. The platform also integrates with financial partners and plans to launch its own stable coin.
The speaker discusses the importance of staying committed to a path despite financial uncertainties, emphasizing that passion for the work can outweigh immediate financial concerns. They mention taking a pay cut to pursue a business venture and suggest that if one loves what they're doing, they shouldn't worry about short-term financial setbacks.
The speaker explains that market crashes, like the 2008 crash, are not short-lived events but can span several months. They suggest that assessing market conditions involves understanding the broader context and recognizing that markets may not normalize quickly. The speaker also notes that the market crashes in some form approximately once a decade.
New options strikes can have open interest but zero volume due to differences between volume and open interest. Open interest reflects the number of open contracts, while volume refers to the number of contracts traded. If a new strike is added to a platform before the market opens, it may show open interest but no volume until the market opens. This can occur due to delays in system updates or differences in how platforms handle new data.
The speaker explains that getting customers for a financial software business is challenging and requires creative strategies. They mention that they used marketing deals and partnerships to acquire their first customers, which involved giving up some company equity. They emphasize the importance of building great technology and finding partners to help distribute the product.
The speaker does not have a specific mentor but acknowledges their parents as role models. They emphasize that a mentor is someone who provides guidance and support, which their parents did not do in the traditional sense.
The speaker states that they put absolutely zero weight on corporate culture. They argue that a great company can be built without great culture, as long as there are challenges for employees and strong leadership.
The tech jobs market is expected to recover when AI becomes fully integrated with traditional technology, particularly in the software space. This integration is anticipated to create new job opportunities and improve efficiency, although the exact timeline is uncertain.
The speaker suggests that buying back the short leg of an untested iron condor for 5 cents is a low-cost action, but they advise against selling a new credit spread on the same side in a later expiration. Instead, they recommend selling a new credit spread on the same side in the same expiration to avoid confusion and maintain simplicity. The rationale is to keep the trade within the same cycle and reduce margin requirements.
The speaker expects Coinbase to move by approximately $1175, with a potential drop of $20 on earnings.
The speaker mentions that Robinhood traded at $29 in April and closed at $3541, but it is currently trading below that level. The exact current price is not specified, but it is noted that it is now trading at a multi-year low.
The speaker believes the E-mini S&P has shown a positive movement of 15 points, indicating a bullish market sentiment.
The speaker noted that the market typically rallies during the Fourth of July weekend, but this was not observed recently, indicating a potential deviation from historical patterns.
The speaker suggests that the delay in the Open AI IPO is a sign that private AI valuations have advanced beyond what public markets are currently willing to pay. This implies a potential misalignment between private and public market expectations.
The speaker suggests that the delay is not necessarily a sign of overvaluation. They mention that there could be many reasons for the delay, such as regulatory, accounting, or business reasons, and that it might not be related to valuations. The speaker also notes that if it were valuation-related, the company would likely push the IPO out sooner.
The speaker and the other person are referred to as 'show dogs' in a humorous context, indicating they are experienced traders. The speaker clarifies that the term was used in a term of endearment, not as an insult.
The speaker suggests that the market's strategies are not significantly different from those used decades ago, implying that foundational trading principles remain applicable. However, no specific trade ideas or actionable recommendations are provided.
The speaker suggests that the valuation may drop after the IPO, but the answer is uncertain and is being tested through a prediction engine. The speaker also mentions that the outcome is not clear and depends on various factors.
The prediction engine has a 75% likelihood of accuracy in certain scenarios, based on historical data and beta correlations. The speaker acknowledges that the accuracy is not guaranteed and depends on market conditions.
The speaker explains that while selling the 215 put could yield a slightly higher credit, the 220 put is preferred due to the embedded $10 wide spread, which provides more room for the stock to move and potentially higher returns.
The speaker states that for most stocks, a few dozen to a few hundred options per strike are sufficient for trading. However, in highly liquid markets, thousands of options per strike may be common. The speaker also notes that in tight markets, the volume itself may not be as important as the market's width, which refers to the difference between bid and ask prices.
The trader abstained from answering directly but mentioned a call diagonal trade on SPX or SPCX with a defined risk of $440. The trader expressed a preference for a slightly bearish trade due to market sentiment and the potential for a rally before earnings.
A company might delay an anticipated event due to private valuations through funding rounds with limited disclosure and negotiated pricing, which differ from public market valuations that involve continuous price discovery and more financial scrutiny.
Going public introduces significant regulatory and operational challenges for private companies. The transcript highlights that public disclosure requirements and increased oversight can drastically alter the company's operations and decision-making processes.
Companies may delay IPOs during high market volatility to improve their chances of a stronger debut, higher valuation, and better long-term shareholder outcomes. This is because listing during a weak market can negatively impact the IPO's success.
Headlines surrounding a major AI IPO can influence stocks viewed as AI beneficiaries or infrastructure providers, even if their direct relationship to the IPO is limited. This is because the market's perception of the IPO's success or failure can affect investor sentiment and demand for related stocks.
The speaker suggests that SpaceX's dominance in the space launch industry may make it difficult for new entrants to challenge them. However, the presence of competition, such as Rocket Lab, can help stabilize prices and drive innovation. The speaker acknowledges that SpaceX has a 20-year head start and significant profitability, which could make it challenging for others to compete.
If IVR remains elevated, defend and adjust the position. For defined risk trades, there's a 60% chance the stock could reach the strike price. If volatility collapses, close the position as it may be exposed to significant risk. For undefined risk trades, more aggressive actions like rolling down the untested side are recommended.
The decision to adjust or close a losing trade should be based on the amount of additional capital required. If the capital needed is minimal, adjust and defend. If it's significant, close the position.
The S&P is up 250, while the NASDAQ is down 300 and trading near its lows. Gold is up $56, and oil is near its recent lows.
The speaker suggests that scalping should focus on the S&P 500 rather than the NASDAQ, as the NASDAQ is described as weaker. This implies that traders should look for opportunities in broader market indices for better scalping outcomes.
The speaker does not know whether Zola is a publicly traded company.
A superstar is defined as someone who is consistently present and has a unique level of performance or personality that makes them stand out, even if they are not the most popular or charismatic player.
Prediction markets, such as the CME Fed funds futures, are generally accurate in forecasting interest rate changes, but they are not perfect. The speaker notes that while they are reliable, there are instances where the market can reverse directions, with approximately 15% of the time showing complete reversals. This indicates that while markets are useful, they should not be viewed as infallible.
The two stocks are Alibaba (BABA) and Meta (formerly Facebook).
The speaker acknowledges that Boeing is a challenging stock to trade due to its low liquidity and wide market movements. However, they are willing to trade it, noting that the stock has had a significant expected move and that they are selling puts to gain exposure to a potential increase in the stock price.
Working for a company offers structure, financial stability, benefits like health insurance and education, and reduced compliance risk. It allows individuals to focus on skill development without the burden of oversight responsibilities. Self-employed individuals, on the other hand, have unlimited potential and full creative control but face higher risks and responsibilities.
The speaker highlights that leaving a traditional trading role for self-employment involves significant risk, as there is no guarantee of success. The speaker notes that while the financial rewards can be substantial, the real value lies in autonomy and control, which come with the risk of failure. The speaker also mentions that many people initially doubted the decision to leave the floor, but later recognized the potential of such a path.
The recommended strategy is to sell puts or put spreads. This is because if the stock remains above the strike price, the trader keeps the premium, generating profit. This strategy is suitable for traders who believe the stock will not experience a significant downward move.
AI will help traders by enabling better risk management, defining risk parameters, and providing real-time insights into market movements and volatility. It can also monitor positions 24/7 and alert traders to relevant events, enhancing their ability to make informed decisions.
AI is impacting the trading industry by offering quantitative predictive models supported by exchange prices and other data sources. It enables the aggregation of information from multiple markets, leading to more accurate predictions and optimized trade adjustments. This reduces the need for manual intervention and allows for more efficient trading strategies.
Contract work offers flexibility and learning opportunities but lacks benefits. Full-time roles provide stability and benefits, which are crucial for older workers or those with family responsibilities. The decision to prioritize flexibility over benefits depends on individual circumstances and life stage.
The speaker believes that interest rate hikes could make fixed-income investments more attractive, potentially leading to a withdrawal of capital from the stock market. They are skeptical about the Fed's ability to spin rate hikes as positive for the stock market, especially given the current market conditions.
The transcript mentions that the cost of a hot dog at Costco is $1.50, and it is noted that this is part of a broader trend of rising prices across various goods.
The speaker sold gold puts at prices ranging from $24 to $34, with the 10 delta puts at around $3,700 and the 3,500 puts at $3,650.
The speaker explains that if bond prices remain above 112-114, there is a zero chance of rate hikes. The bond market signals the Federal Reserve's actions, and the market's price movements indicate the likelihood of rate changes. This is a fundamental principle in fixed-income markets.
The gap has not closed significantly, and in some cases, retail investors may have gained an edge due to increased access to information and tools. The speaker suggests that retail investors have historically outperformed professional investors, who are often seen as asset gatherers and salespeople.
The speaker finds the term 'retail investors' demeaning and broad, emphasizing that it should refer to individuals actively managing their accounts and using trading platforms. They argue that such investors are more capable and strategic than professional investors.
The speaker expresses skepticism about the claim, suggesting that 50% is a 'huge number' and that 2030 is a long time away. They also question the likelihood of such a significant impact, stating that they 'don't think so' and 'don't think there's any chance in hell.'
The speaker believes the probability is low, estimating around 10% chance. They suggest that the current trends and infrastructure may not support a significant shift to electric vehicles by 2030.
The probability of profit for a 10 delta put is 91%, calculated as 100 minus the delta.
The tick size for crude oil is $10.
Short delta positions benefit from a weak market, as the market has been weak and there has been a lot of two-sided action. This is encouraging for traders with short delta positions.
The speaker believes the current market correction is a potential buying opportunity, as it is a short-lived dip that may be followed by a recovery. The speaker also notes that the market's behavior is influenced by psychological factors, where traders may react differently to declines versus gains.
The speaker suggests that the realistic plus or minus on the mechanics of the Unlucky Investor's Guide strategy is around 50%, with a preference for taking profits quicker at 25% to 50%. The speaker also notes that the environment's volatility levels influence the optimal profit-taking point, with lower volatility favoring quicker profit-taking and higher volatility allowing for longer holding periods.
The edge comes from the trader's strategy and confidence in their assumptions. Even with equal access to information, the ability to interpret and apply that information effectively is what creates an edge. Confidence in one's strategy is crucial for making profitable trades.
The speaker initially thought AI would be like a Google search, providing a more advanced look at information. However, they realized AI not only provides deeper insights but also learns from user input, making it a powerful tool that can be tailored to individual needs. This realization led to a more positive view of AI's potential in trading.
Yes, the speaker asserts that success in trading today is more about interpreting information, managing risk, and maintaining discipline rather than simply obtaining information. This is due to the increased availability of information and the need for disciplined risk management in volatile markets.
Information is less useful for retail traders in the context of high frequency trading because the market is dominated by algorithmic trades that execute at high speeds, often rendering traditional information-based strategies ineffective. Retail traders may not be able to react in time to market changes caused by HFTs.
Private equity involvement can lead to loss of control, potential conflicts, and unexpected changes in business operations. It is important to ensure that all terms are clearly outlined in writing and that the business owner understands the implications of the deal.
Social media has both improved trading by increasing engagement and accessibility to financial information, and made markets more irrational by accelerating the spread of misinformation and fostering herd mentality. The speaker suggests that while more people are involved in trading, the speed of information dissemination has led to shorter-lived market trends.
Finfluencers can significantly influence market behavior by spreading speculative ideas and misinformation. This can lead to increased irrationality and a loss of credibility in the markets. The transcript suggests that such behavior is more tolerated today than in the past, but it still poses risks to market fairness and trust.
The speaker is short MU and believes that the larger move is not priced in. They expect a larger than expected move to the downside, as everything is skewed to the upside. The speaker acknowledges the possibility of a move to the upside but believes the downside is more likely.
The speaker invites viewers to submit questions for themselves, Tom, Tony, and One Lucky Dog through the website lostdog.com.
The speaker has not played any US Open courses.
The stock market is currently showing a quiet opening with the S&P down by 8 points and the Nasdaq down by 46 points. The market appears to be indifferent to recent geopolitical events, but oil prices are a concern for bonds.
The speaker acknowledges having said 'couldn't be more wrong' in the past, attributing some of these instances to their own mistakes or the actions of others, such as Scott.
The speaker suggests that young individuals may not have the leverage to choose the best available option, and that opportunities should be considered carefully.
The best job is the one that teaches you the most, as it provides valuable knowledge and experience. This is in contrast to the job that pays the most, which may not offer the same long-term benefits.
The stability of the corporate world is a myth. While it may appear stable, job security is not guaranteed and can be affected by economic downturns or company-specific issues. The speaker argues that this perception is not aligned with the reality of corporate job stability.
The speaker states that corporate layoffs happen frequently, with the perception that it occurs every other day. The speaker also notes that corporate layoffs are a common occurrence, with companies frequently slicing and dicing their workforce.
The keys to opening a new position include controlling liquidity, implied volatility, strategy, and subjective assumptions about price direction. The speaker emphasizes focusing on controllable factors rather than external events.
The speaker states that it is not wrong to make a trade based on belief, but emphasizes the importance of not having fixed expectations. The speaker acknowledges that belief can influence trading decisions but stresses the need for flexibility and adaptability in the face of market changes.
The discussion suggests that information asymmetry can lead to market inefficiencies, as traders with access to non-public information can profit from trades. This implies that markets are not always efficient, and the dissemination of information plays a crucial role in market accuracy.
Price extreme is subjective and varies depending on the trading strategy, such as scalping versus longer-term trades. It is not a fixed value but rather a feeling or perception based on the trader's context and market conditions.
Knowing pre-trade probabilities is essential for successful trading as it helps in assessing the likelihood of success. The speaker recommends a minimum probability of 60% and prefers 65-66% for better reliability. This is part of strategic mechanics and helps in making informed trading decisions.
The VIX is down 6 cents, indicating a decrease in market fear. However, the speaker notes that fear levels are still relatively high, with the VIX at 22, suggesting that while fear has decreased slightly, it remains elevated.
The refinancing of low-rate corporate debt could have significant market implications, potentially leading to volatility and affecting various sectors, including tech and financial markets.
The speaker believes the war is off before it even started, and mentions that oil prices have dropped by $6, which affects the rally.
The 30-year average for mortgage rates is around 5% to 5.2%, with the speaker noting that it was closer to 7% in the early 80s and late 90s.
The speaker acknowledges that averaging down on losing option trades is not a hard rule and can make sense in certain situations. They mention that they have done it, but it's not a habit. They also note that averaging down on winning trades is not common.
The market was selling off due to bonds and other factors, but there was more to it that wasn't visible. The situation is compared to a past event where a hedge fund manager's fund was blown out, leading to a market turnaround.
The speaker would have considered putting money into the deal if Ken Griffin had called, but he would have been cautious and not necessarily invested directly.
The US Treasury's support for the Japanese yen is a symbolic move, not a significant financial commitment. It may be slightly bullish for bonds but not for the dollar or euro.
The expected move is $21.
No, the expected move is based on the options implied volatility, not open interest.
The speaker suggests that even if liquidity or volatility becomes skewed, markets won't get too wide during the day. High-frequency firms have handled such situations, and models are based on normal liquidity. If spreads do widen, a contrarian approach could be taken, but it's unlikely. The speaker advises not to trade with the idea of 'monsters under the bed' and to focus on liquid products where you can trade both sides.
Tom's favorite trades of the week include Apple short strangle 43%, hood short put spread 20%, SMH short iron condor 9 19%, and coin short put 18%.
The short interest in Peloton stock increased from approximately 111 million shares at the end of June to 165 million shares as of July 15, representing a 40% increase. More recent estimates suggest the short position is higher, though the short float percentage varies depending on how the tradeable float is defined.
The speaker manages a family portfolio as a single book with positions based on Netflix, making it more manageable. They suggest keeping things simple and not rolling trades.
The speaker suggests that covering the trade covers all the risk and that there is nothing else to think about. However, the speaker also suggests that rolling the trade out and either up or down can reduce some of the risk of the trade.
The bill has passed the House in July 2025 and the Senate Banking Committee advanced its version in May 2026 by a 15-9 vote. However, the full Senate has not voted yet, and it is being held up due to concerns about internal processes. The Senate Majority Leader John Thoon indicated that passage before the August recess was unlikely, but the floor process might begin. The midterm calendar leaves little room for a Senate vote and reconciliation with the House version.
The speaker has a small position (one to three percent) in cryptocurrency, the same for the last 10 years. The other person does not have any position.
Staying small is the primary defense against large market swings. Position sizing should be between 1-5% or 6% of your account, with 3% as a barometer. It's an art, not a science, and you need to stay comfortable with your risk tolerance.
You can be wrong and still make money.
The speaker suggests using between 25 and 50% of a portfolio for margin, adjusting based on volatility. When volatility is higher, they recommend closer to 50-60%, and lower when volatility is lower. They also mention that for larger accounts, the percentage should be lower, such as between 15 and 25%.
Nasdaq was up 254 points, and the speaker sold it due to a spike trade. The exact trade details, including entry, target, and stop-loss levels, are not specified.
The speaker discusses the relative importance of the business or industry versus the job itself, suggesting that both factors are significant but the context of the job and its outcomes can influence the importance of the industry.
A CFD (Contract for Difference) is a financial derivative that allows traders to speculate on the price movement of an underlying asset without owning the asset. It is an over-the-counter trade with high leverage, and it is illegal in the United States but legal in many other countries. CFDs are popular in the UK due to the lack of taxes on short-term gains, which makes them more attractive compared to traditional market trading.
The speaker was asked about the time, and they responded that they were just getting out of their position. They mentioned that they had extra time on their hands due to a slow game of baseball and golf.
The speaker has not placed the order yet.
The speaker and their team do not change their approach based on potential competition. They emphasize focusing on their own vision and not worrying about what others are doing. They suggest that entrepreneurs should not be deterred by competition and should instead focus on their own goals and adapt as needed.
The Nasdaq is down 135, while the S&P is sharply unched. Gold and silver are down, and Bitcoin has retreated from 78,790 to under 75,000. The speaker notes that the Nasdaq is the primary focus of market activity, with significant movements potentially scaring investors.
The transcript discusses that the job matters more when it provides direct compensation for specific skills, offers personal satisfaction from completing tasks, and allows for more transferable skills and options. This is contrasted with the industry's potential for upward mobility and networking value.
The market is described as choppy with mixed movements. The Nasdaq is down 75, gold and silver are down, Bitcoin and Ethereum are down significantly, while some stocks like Apple and Amazon are up. The speaker refers to it as a relief day with no clear direction.
The speaker advises against managing others' money, citing the complexity of conflicts, risk tolerance differences, and the difficulty of maintaining consistent performance. While some individuals have successfully built businesses managing money, the speaker emphasizes the challenges and risks involved.
The key risks include loss of objectivity, asymmetric risk (blame without reward), emotional burden, legal liability, and potential loss of relationships. These risks are often underestimated, even by experienced individuals.
The speaker confirms that the statement about being available for questions and support was not what was said but what was written. The speaker clarifies that the original speaker, Tyler, did not have time to discuss the matter immediately.
The market is showing signs of indecision, with a potential direction not yet clear. There are frequent sell-offs followed by rallies, indicating a lack of clear trend.
The speaker states that the bourbon is still good, though it doesn't age anymore once in the bottle.
The market experienced a sell-off but rebounded, closing up 13%.
The market is showing mixed performance with the S&P 500 up 51 and the NASDAQ up 215. However, some assets like gold, oil, silver, and Bitcoin are down. The 10-year rate is slightly down at 455.
Yes, the speaker suggests that the best trades often make traders feel the most uncomfortable, which is referred to as the paradox of certainty. This implies that confidence in a trade may not align with its actual risk or reward potential.
The speaker believes that the best trades often make you feel uncomfortable, as they are typically uncertain or risky. This is in contrast to trades that feel like layups, which are easy but often do not work out.
Managing a volatile trade like Dylan's involves adjusting the position based on market movements. If the stock declines, selling an out-of-the-money put can be a strategy. If the stock rallies, rolling the put higher may be necessary. The key is to monitor the trade closely and make adjustments as needed, while being aware of the risks involved.
The speaker is not wearing sneakers; they are wearing Sketchers or pumps. The conversation includes a humorous exchange about the type of shoes.
The hidden risks of the SpaceX IPO include stretched valuation, the Elon Musk effect, cash burn, and dilution. The speaker notes that the stock is significantly overvalued, everything is tied to Elon Musk, and the company is expected to raise a large amount of money, which could lead to dilution.
The SpaceX IPO is expected to significantly impact market concentration, as it may be included in index funds. This could lead to increased demand for the stock, as index funds are required to include it, potentially driving up its price. However, the low float of the stock may make it difficult to short, leading to higher volatility.
The speaker suggests that while it's a valid question, it's not part of the original deal. They argue that if private companies can perform better than the government, it's better to fund them rather than other entities like NASA. The discussion highlights the benefits of private innovation and the potential risks of wealth inequality.
The show is scheduled for one hour daily, from 9 to 10 central time, on four days a week (Monday to Thursday). The speaker is negotiating to extend the show's duration and frequency.
Crude oil is expected to trade in the low 80s by the end of July, with current prices at 88. Both Tony and Ron agree on this outlook.
The speaker suggests that engaging with various sources of information and ideas is key to finding new trades. They emphasize that even if one struggles to find trades, ideas can come from anywhere and should be explored.
Daily options can be a viable place to trade, especially for those with limited capital. The speaker suggests that they are suitable for retail investors due to their liquidity and the potential for significant moves. However, they caution that traders should be cautious and have a clear strategy due to the high risk involved.
The Lost Dog software offers benefits such as prediction models, AI technology, and trade ideas. It is described as being in its early life cycle with potential for significant technological advancements in the coming year.
The speaker suggests bringing a computer or similar device to the setup, indicating a need for visual aids during the presentation.
The transcript suggests that while 1% fees may seem high, they are expected to decrease significantly due to AI-driven efficiency. The speaker advises that investors should not be locked into high fees and should consider alternatives like low-cost index funds. The answer emphasizes the importance of evaluating the advisor's performance and approach, as well as the potential for future fee reductions.
The probability of a 20% meltdown in the SPX by December 2026 is 30%, based on the delta of the 5600 put. This is calculated as double the delta of the put option, which is 15%.
The speaker discusses the difference between a straddle and a strangle, noting that a straddle involves buying or selling both a call and a put with the same strike price and expiration, while a strangle involves buying or selling calls and puts with different strike prices. The speaker also mentions the risk profile of each strategy, particularly in the context of natural gas trading.
The speaker suggests that selling straddles is not ideal for natural gas due to its high volatility and limited downside potential. Strangles are preferred as they allow for skew consideration and better risk management.
The speaker suggests that preserving earnings is not a priority for someone who has experienced significant financial success. They emphasize that the focus should be on continued growth and engagement rather than preservation. The speaker also highlights the importance of not planning life around financial success and the unpredictable nature of trading and entrepreneurship.
The speaker indicates that 2025 was not a total outlier and that the strategies used were not necessarily the same as what was successful in 2025. The speaker suggests that if the strategies were working, they should be revisited.
The recommendation is to wait for high IVR (Implied Volatility Ratio) to sell premium or buy spreads. This approach is believed to increase the chances of success by taking advantage of the market's volatility characteristics.
The speaker explains that futures options on ES and MES do not have early exercise, so traders do not need to worry about assignment. The options expire into cash at the closing price, and the difference between trading March options versus April/May options is the expiration into cash at the closing price.
There is no such thing as a Fed put. However, traders can replicate the concept by buying puts on bonds or the stock market. There are no listed products that directly replicate a Fed put, though event-based contracts could theoretically be used to express the idea.
The speaker acknowledges that the pay gap could widen if AI replaces workers but does not replace executives. However, they suggest that the impact may vary across industries and that the long-term effects are uncertain. The speaker also notes that executive pay may need to decrease for the system to survive, but the mechanism for this is unclear.
No, you cannot use the proceeds from selling a put to buy a call. You must have the capital to cover the put's margin requirement and the cost of the call.
Some traders may be able to hear their heartbeat, and this ability, known as interoception, has been linked to successful trading. Research suggests that traders with heightened interoception may make quicker and more effective decisions, possibly due to subconscious awareness of bodily signals.
The speaker did not make any trades overnight and only made adjustments to existing positions. They mentioned that they did not have much market risk on their account and were mostly making minor adjustments.
The speaker states that cocoa is untradeable for most retail customers due to its exchange not supporting retail accounts. They mention that cocoa prices have been crushed but note that it's not recommended to buy it.
To play for a dollar rebound, one can consider ETFs like UUP, which tracks the U.S. Dollar Index. Alternatively, trading the euro (6E) by selling calls or call spreads is suggested as a more liquid and effective method. This approach assumes the dollar will rise while the euro falls, which is a common inverse relationship.
The speaker believes Seattle is the favorite to win the Super Bowl next year, while the other person suggests the Bears. The speaker is unsure of the exact odds but indicates that Seattle is favored.
There is no maximum value for IVR. While extreme values like 141 or 205 are rare, they can occur and are often associated with high volatility and potentially attractive risk-reward ratios.
The speaker believes that consultants are not worth the money, time, or resources. They argue that such topics should be delivered firsthand by employees or executives, not by external consultants. The speaker shares a personal anecdote about a negative experience with consultants during a company acquisition.
People hire consultants primarily to transfer liability away from themselves, especially executives, to avoid personal responsibility for decisions. This is a recurring theme in the discussion.
The efficient way to play a potential recovery in a stock like Kendra Holdings (KDS) is to sell puts, particularly the out-of-the-money strikes. This strategy allows for capturing premium while providing a hedge against further downside. The recommendation is to wait for options to be added to the platform, then sell the 10 or 11 puts depending on the stock's price movement.
You cannot roll the broken butterfly because it would require six legs, and most platforms only support four legs. However, you can roll the put side and then the other side separately.
The speaker suggests rolling out the embedded put vertical and broken butterfly spreads as a strategy to manage risk. This approach allows traders to avoid the complexities of managing a single butterfly spread by breaking it into two separate trades.
Bitcoin is identified as the flight to quality in a market downturn due to its finite supply, established market position, and relative resilience during sell-offs. It has shown less volatility compared to other cryptocurrencies during market downturns.
The speaker discusses that they do both, renting and buying, depending on the situation. They mention that buying a building is not a good investment from a real estate standpoint but is done for control and flexibility.
Spread orders may not get filled due to the aggregation of prices from different exchanges and the use of aggregators. The platform provides a mid-price, but the actual execution depends on the best available price across exchanges. Canceling and replacing orders can sometimes result in fills if the order is sent to a different exchange with better liquidity.
The answer suggests that beginners should start with small investments, use free educational resources, and learn by doing. It emphasizes the importance of understanding the technology and market dynamics before making significant investments.
The Super Bowl is historically considered an indicator for the stock market, with an NFC team win being bullish and an AFC team win being bearish. However, the reliability of this indicator has decreased in recent years, with a 50/50 success rate.
The response suggests starting with free educational resources, such as books, online shows, and platforms, rather than purchasing courses. It emphasizes the importance of practical engagement and starting with small trades to build experience.
The speaker mentions that digital assets like Bitcoin and ETH, as well as FX products, can be traded with a Johnny-size account. Futures are also available but are 24/5 and may expand to longer hours. The speaker advises ensuring approval to trade all products and highlights that liquidity is a concern during off-peak hours.
The speaker believes there may not be an associated options market due to regulatory challenges and the difficulty of obtaining approval for options on individual stocks. They also mention the potential for lawsuits.
Lost Dog is a platform that optimizes career value and portfolio value, with a complementary digital ecosystem. It is not a brokerage platform but aims to integrate with various financial service platforms. The platform's value lies in its ability to provide a broad reach and attract followers, which can then be monetized through partnerships with financial service firms.
A Johnny account is limited to three pattern day trades in a rolling five business day period. This limit is in place until the rule is officially removed, which is expected within two months.
The best way to exit a successful trade is to take profits and exit the trade when the opportunity has been realized, rather than chasing further gains. This approach prevents overexposure and potential losses from market reversals.
The speaker suggests taking profits at around 50% of the expected move in a stock, as it is considered the optimal point for profit taking in swing trading.
The speaker believes the US dollar's dominance in global trade and financial systems makes it too big to fail, and the transition to BRICS currencies is unlikely in the near term. The US dollar's cyclical nature is acknowledged, but the speaker does not foresee a significant shift towards gold or other currencies in the short term.
There is nothing wrong with an options and futures only portfolio. It is a valid strategy that can be used to create synthetic long positions and benefit from option decay. The speaker mentions that this approach has been their entire portfolio and that it is a viable strategy for a small group of traders.
The poll mentioned in the transcript is about the preference between curling and the WNBA, with 68% of respondents favoring curling. This is a light-hearted topic and not directly related to trading or financial markets.
Temperament is more important than intelligence for successful investing, especially for long-term investors like Warren Buffett. However, for option traders, intelligence is as important as temperament. Intelligence helps in understanding strategies and structures, while temperament helps in managing risk and making decisions under pressure. Reading books can provide information but is not enough on its own.
The speaker prefers stress testing over backtesting, as backtesting is seen as looking back and not providing a full picture. Stress testing is used to evaluate account size limits and position sizes, pushing them to near-zero levels. The speaker also mentions using smaller position sizes and selling closer to the money for shorter-term trades.
The best use of backtesting is for research purposes to build up a set of mechanics to optimize trading strategies. It is considered a tool to engage traders with their strategies, similar to technical analysis.
The speaker has small positions in various assets, including stocks, commodities, and currencies. They are long Oracle and the yen, short the US dollar, and have short positions in natural gas, gold, silver, and puts in the yen. They are flat in bonds and have no major positions in the market.
The speaker expresses appreciation for Scott's return and acknowledges that Scott's back.
Buying VIX calls is not recommended as a hedge for iron condors due to the high cost of VIX premiums and the difficulty in timing the market. Instead, skewing the iron condor with a small amount of negative delta provides better protection at a lower cost.
When raising capital, having a CFO is more important than a CTO. A CFO is essential for creating financial models, managing cash flow, and providing the necessary financial oversight that investors look for. A CTO, while important for the vision and technology foundation, is not as critical in the initial stages of raising capital.
The speaker suggests that micro futures are better for scalping than leveraged ETFs, but ETFs can be a viable alternative if they are liquid. The speaker also notes that individual stocks have been a good scalping vehicle in the current market environment, particularly in sectors like software stocks.
The speaker's value proposition is to help people understand and grow their value, both in their careers and their portfolios. This includes providing tools and insights to assess and enhance one's worth.
AI has the potential to level the playing field for entrepreneurs, similar to how cloud services transformed the hardware space. This is based on the idea that AI can reduce the initial costs and complexity associated with starting a business, allowing entrepreneurs to focus more on innovation.
The trader uses technical analysis, specifically the relative strength index (RSI), to enter positions after fundamental analysis. This approach combines fundamental insights with technical indicators to identify optimal entry points.
The speaker suggests a historical correlation where U.S. debt doubling has been associated with market indices like the S&P 500 tripling. However, this is presented as a speculative argument and not a confirmed trading strategy.
The speaker suggests buying dividend-paying utility stocks as a low-risk strategy for income, as they are less volatile and provide regular income. The speaker also mentions that T-bills are an option but do not pay a lot of interest. The speaker emphasizes that buying premium is not the opposite of selling premium and is not recommended for income strategies.
Saul is described as a passive investor who has focused on his family for the past 14 years. He is not actively trading and has not been involved in any specific trading strategies or instruments, unlike the other panel members.
The speaker does not follow the exact strategy of Warrior Trading, but they do trade stocks that experience significant gap moves. They emphasize that the initial gap does not dictate the trade direction and that further analysis is required before entering a trade.
The software aims to empower employees by providing them with comprehensive data on salary benchmarks, job worth, and market values. This information is intended to help employees negotiate their salaries effectively, potentially outperforming salary consultants by giving them the same data that consulting firms use.
Yes, it is reasonable to call back to check on the status of a job application after an interview. The speaker suggests that it is entirely possible that the candidate may have been dropped in the system or that the employer may have encountered internal issues. Proactively reaching out can help clarify any misunderstandings and demonstrate interest in the position.
The speaker's maximum allocation in digital assets is 3%.
The speaker is uncertain and suggests that the futures might be outdated, indicating a need to verify the correct expiration date for the gold futures being traded.
The speaker explains that overvaluation is identified through subjective price extremes, not fundamental or technical analysis. This approach involves recognizing extreme price movements as indicators of overvaluation, which may suggest potential reversal points. The speaker argues that such price extremes are contrarian signals and do not require fundamental or technical analysis to identify.
The speaker clarifies that 'short XYZ' refers to net delta positions, which can include various strategies such as shorting the underlying, selling calls, or shorting puts. The exact strategy depends on the context and the trader's approach.
The speaker suggests starting with small trades, using one lot, defining risk, and focusing on familiar stocks or indices. They emphasize the importance of liquidity and recommend resources like books and free online materials. They also caution against paying for unnecessary resources and suggest starting with simple strategies.
The speaker suggests that going wider on the trade into earnings is not necessarily better, as the trade is essentially a bet on whether the underlying will move outside the expected move or stay within it. The speaker notes that there is no edge either way, and the trade is priced to perfection.
The speaker does not believe there is a specific level that concerns the market, as the 10-year yield has been trading in a narrow range for a long time. The Fed's decision not to lower rates has not significantly impacted the yield, and the market remains complacent. The speaker emphasizes that the market's behavior is more about the range of rates rather than specific levels.
The speaker suggests that the market's behavior is different now because of the prolonged period of shorting the market and the lack of a pullback in prices, despite macroeconomic factors. They also note that the market's behavior is driven by price dynamics rather than macroeconomic indicators.
If you are concerned about micromanagement and the company's culture, it is advisable to avoid taking the job. The risks of such an environment may outweigh the potential benefits, and it is better to seek opportunities that align with your values and career goals.
The speaker cannot name specific prop firms and advises caution, noting that most prop firms focus on short-term fee generation and require intraday trading. They emphasize the importance of checking fine print and ensuring that the strategies you want to trade are allowed.
It is considered inappropriate to wear a team jersey to a game because it is seen as a form of pretension or disrespect. The speaker argues that it is not acceptable to wear a jersey with a team's name on the back to a game for that team, regardless of the wearer's gender.
Howie Roseman wrote over a thousand letters to NFL teams between high school and law school to secure a job. Eventually, the Giants contacted him out of curiosity, and he secured an unpaid internship with the Eagles, leading to salary cap work.
The AI allows users to input detailed information about themselves, such as projects, videos, interviews, or podcasts, to provide a more comprehensive assessment. The system uses this data to generate a score that reflects the user's value, with higher scores indicating more accurate interpretations. However, the system's effectiveness is limited by the information provided, as it can only analyze what it is trained to look for.
The speaker states that employers cannot use the software against employees because it is not yet completed and the software is designed to help employers be more fair. The speaker also emphasizes that employees are unique and employers do not know enough about them to use the software against them.
Most people believed that machines or algorithms could not replace human traders due to the uniquely challenging and complex nature of their work. They viewed their jobs as irreplaceable by AI or algorithms.
The speaker is reprimanding the listener for not being respectful or considerate in a social context, likely related to a personal relationship or a public setting.
The speaker mentions they want to avoid being stuck in a 'horrible position' between Christmas and New Year's, but does not specify any concrete actions for 2026. They also mention they want to focus on 'lifewise' changes rather than trading-wise.
Diversifying capital with a CTA can be a reasonable strategic move, especially when recommended by a wealth manager. However, it is important to maintain a short leash on the advisor to ensure alignment with one's investment goals and risk tolerance.
The speaker is skeptical about investing in fossils, citing the lack of regulation and potential for fraud. They suggest that while some alternative assets like vintage scotch may be more promising, fossils are not a recommended investment due to the risks involved.
The speaker suggests selling upside calls as an alternative to buying puts. This strategy allows for generating income from the premium while limiting the risk of market movement against the position.
The speaker suggests selling upside calls as a way to play the AI bubble without buying puts. This strategy allows traders to profit from potential price declines while limiting downside risk. However, the speaker notes that this is not an easy trade and requires precise timing.
Futures contracts do not settle into cash except for index futures that settle on a quarterly basis. All other futures settle physically, meaning the underlying asset is delivered. This is a key difference from stocks and options, which typically settle in cash.
The speaker recommends selling upside calls and strangles as strategies, depending on the market conditions. The choice of strategy is influenced by the current market regime, which in this case is described as all-time highs.
The speaker does not have a particular ticker in mind and takes an agnostic approach to symbols, focusing instead on liquidity and market movement.
The speaker argues that financial literacy should not be simplified to basic concepts like balancing a checkbook but should challenge individuals intellectually. Teaching basic money management is seen as a mistake because it does not address the deeper understanding required for financial literacy.
The speaker recommends having at least double the amount of capital you think you need. This is a rule of thumb to account for unforeseen expenses and to provide a buffer for unexpected challenges. The minimum number of months of capital should be at least 18 to 24 months.
The speaker suggests that financial literacy education should focus on strategic and practical aspects of financial markets, including efficient market theory, positive drift, and the mechanics of listed financial markets. It should also incorporate business and entrepreneurship concepts.
The GEX index measures the change in delta exposure for options based on changes in the underlying price. While it provides insight into potential market movements, it is not a tradable asset itself and is more of a reference point for understanding market dynamics. Its value lies in helping traders analyze options behavior and anticipate shifts in market sentiment.
Gamma exposure measures the change in delta exposure over time. It is more relevant in trending markets with longer durations, as it reflects the change in delta exposure over time. In intraday trading with zero DTE, gamma exposure has limited value because the real gamma exposure occurs over weekends and long holidays.
The speaker and others in the discussion anticipate a downward trend in the market for the upcoming year, with estimates ranging from a minimum 10% decline to a more moderate 5-7% drop.
The speaker does not like trading on government numbers because they can be noisy and may not provide clear signals for trading. However, the speaker also acknowledges that they can be useful for traders who are able to interpret the data correctly.
The speaker states that oil is not doing much, with a slight increase but not significant. The price was around 80, up from 67 a week ago. The speaker mentions selling puts and calls in oil, indicating a short position, and notes that oil is a 'decent sized loser' for the day.
Selling a put on a stock you own is a strategy that takes advantage of the probability that the option will expire worthless, whereas buying the stock outright is better if there is a significant upward move expected. The speaker suggests that selling puts is advantageous when the stock is expected to remain within a certain price range, as the premium received can be a profit if the option expires worthless.
The speaker believes that the option market is not mispriced and that the market is priced correctly for where it is right now. The speaker also notes that there will be a surprise in the market, but it will not be a shock. The speaker mentions that Dell, Micron, AMD, and other companies are likely to have a surprise, but the market is not mispriced.
The speaker explains that position sizing should be based on buying power and the price of the underlying. For higher-priced stocks, smaller position sizes are used to avoid overexposure, while lower-priced stocks allow for larger positions. The key is to ensure that the trade fits within the trader's overall capital allocation and risk management framework.
The speaker acknowledges the question and states that while they have had success with Tasty, they are not committed to any one direction and are open to exploring new opportunities, including potentially starting a loss dog brokerage. They emphasize that nothing is off the table and they are willing to explore various options as the year progresses.
50% of respondents in the Dog Pound have an active trading account at Thinkers.
The Sheridan Paradox is a situation where Scott Sheridan executes a short call spread, expecting the stock to move within a certain range. This strategy is based on the belief that the stock's movement is overestimated, allowing for a profitable trade.
Larry Olsson owns Paramount.
The speaker is no longer long in crude oil. They reversed their position yesterday, flipping from long to short. They mention that they usually do not make such reversals and that the trade has been a bad one so far.
The speaker discusses South Korea's market sell-off as a potential precursor to broader market declines, noting that it has been a leading indicator in global markets, especially on the tech side. The speaker also mentions that the sell-off could be due to profit-taking or external factors like the war in Iran.
The speaker mentions that the only place you can get a hedge or exit a position is in the US markets, which are open 24 hours. Other markets like Singapore and China are not liquid enough for such actions.
The speaker suggests that the Dow Jones is no longer a relevant market indicator, stating it has become financial theater and not useful for 30 years. The discussion highlights the shift in market focus from traditional indices to more liquid and diversified instruments.
The speaker suggests that the Dow Jones is not a useful indicator for active traders, as it has become more of a financial theater. The S&P 500 is considered a more representative index of the broader market. The Dow's price-weighted structure makes it less reflective of the actual market dynamics compared to the cap-weighted S&P 500.
The CBOE stock price is down slightly, but it's within its 52-week range. The speaker mentions that the CBOE has been an incredible investment, but recent declines may be due to overextension, competition from prediction markets, or cyclical factors. The options are not very liquid, and the stock is expensive.
The speaker discussed placing trades on Meta and Microsoft ahead of their earnings. For Microsoft, a broken wing butterfly was used to capitalize on volatility, while for Meta, a naked strangle was sold to profit from expected volatility normalization post-earnings.
The speaker suggests closing a trade if the IVR has dropped significantly, if the underlying assumption has changed, or if the position is too capital-intensive or deemed too risky. Reducing the size of the position is recommended as a quick and impactful move to provide mental relief and clarity.
The Tasty platform allows for quick adjustments without thinking, which is essential for managing risk and making rapid trades. The platform was built specifically for this purpose, changing the way the industry works.
A Canadian cannot open a brokerage account in the United States due to regulatory restrictions imposed by the Canadian government. These regulations are not related to U.S. firms, which are generally open to accepting accounts from any country. However, Canada is a 'no-go' for U.S. firms due to specific regulatory requirements. Canadians can open a U.S. entity, such as an LLC or corporate account, but this involves additional costs and regulatory hurdles.
The speaker is asked if they want to take a bet on the prediction market outcome, and they respond affirmatively.
The speaker believes the market is in a state of significant decline, with a notable drop in prices. They suggest that the market is undergoing a rotation, where certain stocks are performing well despite the overall downturn. The speaker also expresses concern about the potential for a crash, citing increased volatility and the behavior of commodities like oil and gold.
The speaker mentions an expected move of 10-12% for the stock, based on market conditions and prior performance.
The market's growth is increasingly dependent on AI-related spending, similar to the dot com era's growth dependency on internet-related spending. However, the size of companies involved differs, and the situation is not a direct parallel. The discussion highlights the potential risks of over-reliance on AI for continued growth, with caution against repeating past mistakes.
A modern short fund would likely include a mix of stocks, options, and futures, similar to the original short fund. However, it would incorporate ETFs, which were not available during the 1999-2000 period. The original fund was 100% in S&P 500 index positions, with a focus on index options and futures, and no use of equities.
The speaker acknowledges that the market's growth has become significantly dependent on AI-related spending, with trillions of dollars being passed between companies. However, they argue that AI itself is here to stay and will continue to improve, but the current spending spree may be unsustainable. The market's current state is seen as being completely driven by AI, with the potential for a pullback if any company underperforms or guides conservatively.
The speaker expects a move of around 10 to 12%, with the strike prices adjusted to reflect this. The expected move is based on the current volatility and the potential for a positive earnings report.
The speaker's favorite stock trade is Netflix, as they have recently executed a similar trade and believe in the stock's potential for a short put spread.
The speaker argues that while the specific mistakes may not be repeated, the underlying cyclical nature of market behavior suggests that similar issues will arise in different forms. The speaker believes that the mistakes of the dot-com era are not being repeated because we now have a better understanding of them, but the fundamental patterns of market behavior remain.
The speaker believes that AI is not over and that the mistakes from the past will be repeated. They argue that the mistakes are part of a cycle of errors and that the market's rapid movement makes it difficult to predict what will be valuable in the future.
The speaker believes that the butterfly spread on SpaceX is not cheap, and in fact, has become more expensive compared to previous periods. The speaker challenges the listener to review past trades and notes that the volatility in SpaceX is still relatively high, which could affect the cost of the butterfly spread.
The market may be ignoring traditionally considered risks, such as geopolitical or macroeconomic factors. This could indicate a period of irrationality where markets remain irrational longer than expected. However, there is also a possibility that the market is reacting to stronger underlying factors that are not yet fully realized.
The speaker believes the U.S. economy is performing better than the rest of the world, despite some skepticism about its strength. He argues that the market's performance reflects a belief in continued growth, even if this belief is irrational.
The speaker mentions that Goldman Sachs has reduced the probability of a recession from 25% to 15% in three weeks, suggesting a shift in market sentiment. However, the speaker questions the rationale behind this change and implies that the market may still be ignoring risks.
The new Lost Dog release and crypto rewards are available on the platform, and participants can claim their crypto rewards starting tomorrow. The platform will also have a live trade feed starting next week.
The budget for the movie City Slickers was $26 million.
The speaker explains that the iPhone calculator can be used to convert between currencies. This is a practical tool for traders who need to quickly check exchange rates.
The lost dog beanie is available right now at swag.losdog.com, and they are sold at cost.
Firms typically do not take responsibility for losses caused by system outages, especially if the outage is due to an exchange issue. The transcript mentions that firms may not be liable for losses if the system is down, and they often rely on the agreements signed by users. However, some firms may work with customers to resolve issues, while others may not.
Yes, there has been an inverse correlation between US equities and the dollar, with US stocks making new highs while the dollar reaches multi-year lows. This trend has been observed for two years, but the relationship has shifted over time, with the dollar and equities previously moving in the same direction.
People should lock their credit to prevent unauthorized credit applications in their name. This can be done through a quick Google search for 'How do I lock my credit?' and takes about 15-20 minutes. Locking credit stops others from getting credit in your name, but it may require unlocking for specific transactions like applying for a credit card or mortgage. This is a mandatory step for anyone concerned about identity theft.
The speaker states that IV rank is the key metric when looking to sell options, and beta has nothing to do with it. However, beta may be considered if the trader is concerned about portfolio concentration or risk correlation with the S&P.
The worst thing to be fed to is piranhas, as they would rip you apart. Sharks and lions are also mentioned as dangerous, but piranhas are considered the worst due to their ability to tear apart prey.
The speaker discussed the challenges of hedging a short position in silver, noting that gold only hedged 15-20% of the losses. The speaker also mentioned that they tried to hedge with gold but found it ineffective.
The promise of blockchain technology is still relevant, particularly in areas like tokenization, payment rails, stable coins, and digital currencies. While it's not the top headline anymore, it's here to stay and is being integrated into financial systems like the New York Stock Exchange and CME through blockchain technology for instantaneous clearing and money movement.
The speaker acknowledges that while it may seem like a problem, it's not fundamentally an issue if Nvidia is investing in companies they believe in. However, the speaker is concerned about the artificial nature of the valuations and the potential for a vicious cycle where companies are funded at unsustainable levels, leading to eventual funding issues. The speaker also notes that this system is fragile and could collapse if the flow of money slows down.
The market stalled at 7,000 due to either an FOMC meeting or concerns about the Apple Card, with Powell indicating that two rate cuts for this year are not a foregone conclusion. This uncertainty caused the market to stall.
The speaker mentioned that Apple was not performing well, with a decline of $245, and noted that the speaker was not on a hot streak.
The potential reward for the trade is $5,000.
The speaker prefers to sell calls or call spreads rather than using the wheel strategy. The speaker believes that the stock is unlikely to continue its upward trend and that the risk-reward ratio is more favorable with shorter-dated options. The speaker also emphasizes the importance of position sizing and the need to consider the time frame of the trade.
The speaker states that they never consider wash sales and that the technology used by tax clearing firms now offsets all potential buys and sells, making wash sales irrelevant in option trading.
The speaker suggests diversifying the $487,000 by allocating 20% to cash (T-bills) and using the remaining 80% to create a diversified portfolio through an AI tool. The AI would generate a non-correlated, liquid portfolio based on the user's preferences, such as digital assets, quantum stocks, small-cap stocks, and growth stocks. The user would then select and adjust the portfolio as needed.
The optimal put to sell is based on delta, not strike price or volatility alone. A 25 delta put offers the highest amount of money with the least risk, providing an 80% probability of profit. This approach ensures a balanced risk-reward profile.
To build a network, consider joining platforms like Lost Dog, which offer communities for traders. These platforms can help connect with other traders and entrepreneurs without the liability issues of traditional brokerage networks. Focus on building a personal brand and engaging in content creation to attract like-minded individuals.
The speaker acknowledges that most serious traders build their own back-testing systems, but there are no widely recognized platforms that are considered reasonably successful for this purpose. The discussion highlights the complexity of back-testing strategies and the need for custom solutions.
The speaker believes that traditional backtesting platforms will be replaced by AI-driven systems that allow users to input strategies and receive immediate, detailed analysis. These systems will eliminate the need for legacy platforms and complex coding, making trading more efficient and accessible.
The speaker explains that there is no free money in high skew scenarios. While high skew may make options appear more expensive, it does not provide a theoretical edge. The speaker advises that traders should not assume that high skew will lead to free money, as options are priced based on their intrinsic value and market conditions.
The speaker explains that real estate can be a risky investment, especially when it's pursued as a business rather than for personal use. They mention that their family's involvement in real estate was for business purposes, and they personally have not made any profit from real estate investments. The speaker also notes that the Chicago real estate market is currently challenging, with high costs and a lack of movement, making it difficult to build or invest effectively.
Yes, it can be digitized and traded as tokens, but the process is expected to be long-term and may not significantly impact markets due to existing barriers to entry for small investors.
Big banks and financial institutions restrict their employees from trading to avoid the appearance of trading against customers. This is an old practice, and while it may seem outdated, it is still used to prevent potential conflicts of interest. However, the speaker argues that this practice is unnecessary in the modern, electronic trading environment and that it hinders employee engagement with the market.
Yes, it is possible to use ES or MES futures options as a substitute for SPX options. There are no PDT restrictions on futures or futures options, making them a viable alternative. MES is particularly suitable for smaller accounts due to its smaller contract size.
AI is making certain finance jobs obsolete, particularly those involving repetitive tasks like spreadsheet management and investment advisory. However, new opportunities will emerge as technology evolves, emphasizing the need for creativity and adaptability. The role of AI in tasks like coding and financial analysis is discussed, with the view that while AI can assist, human creativity and oversight remain essential.
The speaker is down money, indicating that their position is not unchanged.
From the long side
The speaker believes it is a genuine new industry but is still dependent on government contracts and a few companies.
The implied volatility of SpaceX is currently at 100%, but the speaker believes it will settle into around 60.
Yes. When you roll from one month to the next, you open up your ideas. You could keep the same strike if you want to, especially if it's still out of the money, but maybe it's too close to the money. You want to move down a little bit. Let's just say you're getting tested to the downside. Your puts are a little bit closer. You can move your put down a little bit, get a little bit less delta to it, a little less credit. Also, when you roll month to month, you can open it up. You could do whatever you want. You could change the whole overall position.
The notional size is 100 shares of stock for the standard version and 10 shares for the micro version.
The speaker is long August 105 puts in SpaceX, but not in the account for lost dog. They are short 100s, 95s, 90s, and 80s puts.
A buffer fund or buffer ETF fund is a strategy where you buy a stock or an index and then sell a call and buy a put for a net credit, providing limited downside risk and limited upside.
Maintain position size in check, avoid selling puts into red markets, and sell puts when the market is grossly oversold. Avoid selling puts in overvalued stocks like SpaceX or Nvidia.
The speaker confirms the calculation and states that the return is 140% with an 84% pop.
The S&P 500X lows were seen earlier, and the market was up 20. The speaker thought the lows were seen five handles ago.
The NASDAQ was up 400, but the speaker is questioning the significance of this move, noting that it wasn't as big as it seemed.
The VIX reflects expected S&P 500 volatility over the next 30 days, and the futures curve shows traders' expectations for future volatility at different dates.
The VIX is considered the most misunderstood and misused product for retail traders. The speaker notes that the VIX futures roll up by almost a dollar each month due to the leverage involved, which is not widely discussed.
The speaker is skeptical about the credit market optimism being the strongest validation of the equity bull case, and mentions that it's a red flag for them.
The credit market optimism is not the strongest validation of the equity bull case. Tight credit spreads suggest companies can meet obligations, but this does not necessarily mean their stocks are attractively valued or that future earnings will justify current prices.
The speaker suggests that the current corporate spreads near multi-year lows and credit market optimism may indicate a potential equity bull case, but notes that equity investors are paying high multiples for continued growth, contrasting with Schiller's cyclically adjusted price to earnings near historic extremes.
The speaker acknowledges that the winds may be changing, but expresses uncertainty about the direction and impact of this change.
The speaker mentions they can speak to their experience with Tasty's API but cannot comment on Schwab, IBKR, or Alpaca. They note that Tasty's API is not listed among the competitors mentioned.
The speaker mentions that IBKR definitely uses assisted agents, but is unsure about other firms.
The transcript discusses that while dogs are commonly allowed in coffee shops, they are generally not allowed in hotels due to concerns about dog hair and cleanliness in sleeping areas.
The speaker suggests selling puts on bonds as a defensive strategy when the market is at record highs. This allows for potential profit if the market declines while providing downside protection.
The speaker suggests pulling back and waiting for the market to correct. They emphasize the importance of cutting back on the position and not holding onto it if the market is moving against the short position.
Pulling back in a position means reducing the size of the position to mitigate risk, especially in a losing short position when the market is moving sharply upwards. This action helps to lock in losses and reduce delta, providing a sense of control and peace of mind.
A leader is driven by trust and focuses on people and growth, while a boss is driven by position and focuses on results and processes. Leaders empower team members, whereas bosses rely on authority and control.
To determine if someone is a leader or a boss, observe how they react during problems. A leader is actively involved in resolving issues and supporting the team, while a boss may remain detached, expecting others to figure things out.
The speaker states they haven't sold any Bitcoin lots and are a buyer on any dip. They are holding Bitcoin in the 70s and 60s and consider selling when the price reaches the 90s or hundreds.
The speaker believes backtesting has become easier and more accessible with modern tools, but expresses uncertainty about the practical value of AI-driven backtesting. They emphasize the importance of using reliable tools and understanding market dynamics.
Individual Japanese companies are generally not tradable in the US due to low liquidity and the complexity of trading through ADRs. Even if ADRs are available, they are often not liquid enough for effective trading.
The phrase 'to hell in a handbasket' means a situation is rapidly deteriorating or heading towards certain disaster. It implies a swift, chaotic decline, often used to describe a sharp downward turn in affairs.
The speaker suggests that flipping the cards is not a common occurrence, using the example of switching teams or going through a divorce. They argue that flipping the cards is not the same as swapping out the deck, and that it's more about reshuffling rather than changing teams.
Managing concentration risk involves diversification, hedging, and strategic adjustments. The speaker mentions that in certain situations, such as after a deal, there may be restrictions on trading or hedging, which can limit the ability to diversify. However, they emphasize the importance of being aware of concentration risk and taking steps to mitigate it when possible.
The speaker is unsure about the Walton family's involvement but is certain that the University of Arkansas is eliminating tennis. The speaker suggests that the Walton family might be involved, but this is not confirmed.
The show will be back tomorrow at 9:00 a.m.
A retail investor should buy the IPO and hope for price appreciation, as there are no shorting or options mechanisms available during the initial phase. They should wait for options to become available before participating in trading.
The speaker discusses the concept of success and how it is perceived, noting that people often feel they have reached a point of success but never truly feel they have 'figured it all out.' The speaker also mentions that successful individuals often feel there is always another level to achieve.
The speaker confirms that the uploaded stocks and other assets are not shared with any other platform. The platform maintains a strict privacy policy and does not share user data. Users can choose to share their own screenshots, but the platform itself does not share any information.
The speaker acknowledges that the intrinsic value of Bitcoin is unclear and that it is difficult to determine. They suggest that the market's perception of value is more relevant than traditional fundamentals for digital assets.
The speaker acknowledges the idea but warns that waiting for such an event could be too late. They suggest that if a recession does not occur, the opportunity might be missed. The speaker also notes that predicting such events is difficult and that one should be prepared for different scenarios.
The speaker trades zero days on the S&P 500 index, specifically SPX, ES, and SPY. They avoid other indices like Nasdaq and Russell due to lower liquidity.
The largest price differential observed was around $35 to $45 when the front month expired, which occurred when oil prices went negative. However, there is no reliable method to predict where the contracts will close in relation to each other, and traders should base their decisions on historical patterns and market sentiment.
The speaker states that it is standard practice to act quickly in sharp market reversals, either by taking profits or adjusting for losses. The rationale is that quick action can prevent further losses and capitalize on gains, even if the market subsequently moves against the initial trade.
The speaker suggests buying the stock and selling calls or puts to manage risk while capitalizing on potential upside. The specific strategy involves buying the stock, selling 10 calls, and selling 8 puts, with the volatility and strike prices discussed in the conversation.
The most probable way to leg a butterfly for free is to buy one vertical spread and then sell the other vertical spread later. This approach involves taking market risk and requires careful execution to avoid paying for the trade.
The speaker acknowledges that prediction markets can be manipulated or involve insider trading, but emphasizes that regulated markets like those under the CFTC are subject to oversight. They also note that while some trades may be made on insider information, the impact of such activities is limited due to the small size of trades and the presence of liquidity providers.
The speaker suggests staying with micros for accounts under $15,000, as they provide a good balance between risk and reward. They recommend moving to minis and options on minis once the trader has proven their concept and is ready to scale.
The term 'violently unchanged' is used to describe a market that appears to have no significant movement or direction, despite underlying shifts in sentiment and activity. It suggests a period of low volatility and indecision, where major indices and commodities show minimal changes.
The NASDAQ traded over 7,800, but the S&P 500 did not. The S&P 500 was at 7796781, unchanged.
Bonds being down indicates mortgage rates are likely at their highest levels, which could hurt the daughter's mortgage rates.
The markets are more random than previously thought, and seasonality is not a reliable strategy.
Long calls have premiums attached, even if deep in the money, while long stock is a 50-50 shot with 100 deltas. Long stock uses more buying power than long calls, but buying the call and selling the put can use less buying power.
Leveraged ETFs like SQQQ or TQQQ are mentioned as having high volume and liquidity.
The speaker suggests covering the spread before noon for a small profit, emphasizing the importance of taking profits quickly and not overthinking.
56% of viewers said yes, 25% said no, and 25% said no. The speaker mentioned that Anthropic and Open AI are on the trillion-dollar path, but the majority of the audience believed it would not happen.
To maximize the probability of a pop profit by positioning outside the expected move.
The expected move is around $28.
Calendar spreads can be effective for small accounts, but the speaker suggests exploring diagonal spreads for better risk-reward profiles. They emphasize the importance of managing risk and profit targets.
The OTC derivatives market is currently valued at 846 trillion dollars, with the speaker noting that this is a significant increase from June 2025.
The speaker suggests that writing calls against a large position is not risky to the market, but it could be risky for the counterparty. They emphasize that the market is not typically involved in such large trades.
The stock market was trading at 7,000 in 2008.
The speaker sold Microsoft at $513.50.
The speaker suggests that insider selling should not necessarily make anyone nervous, as it could be due to tax obligations. They also mention that insiders might think prices are high, but this is not a definitive indicator.
The speaker mentions there are 8,000 advanced decline, unchanged stocks indicators and that they don't look at them for an opening trade. They also mention not looking at tren or any of those things in 30 years.
The speaker lists penny stocks, pink sheet stocks, meme stocks, meme coins, vanity coins, structured ETFs with high fees, and private structured products as financial products to avoid. They emphasize the risks associated with these products, such as high fees, lack of transparency, and potential for significant losses.
It's about cryptocasino gambling, which the speaker considers gambling for fun, not a serious investment.
Never. I sell volatility.
The S&P 500 is up 12 points, with a high of the day around 7415. It is currently at 7387.
The speaker estimates the expected move for Nvidia to be around $13, based on previous market movements.
The speaker suggests that there is no single best time to trade, as they have been trading throughout the day, including before the market opens. They question whether the first and last hour of the trading day offer any particular advantage, indicating that the effectiveness of trading times may depend on market conditions and individual strategies.
The speaker states that there is no best time of the day to trade, as the markets are virtually the same throughout the day due to high-frequency trading. However, the first 5 minutes and the last 5 minutes of the trading day are noted as potentially volatile periods.
The expected move for Snowflake is $30.
The best time to trade is between 9:30 and 11:30 AM, with the last hour being less effective due to reduced momentum and price action. This is based on the speaker's experience and observations of market behavior.
The speaker suggests that people tend to be more honest with themselves than with others, but they may shy away from acknowledging their shortcomings when discussing them with others. This implies that self-honesty is a challenge, and it is important to engage in self-audits to uncover these shortcomings.
The speaker mentioned that they did not use a T2000 racket but had a Slazenger wood racket. They later moved to the Wilson T2000, which was considered a significant change.
The speaker explains that undefined risk trades, like strangles, offer a higher probability of profit and a greater credit compared to defined risk strategies like iron condors. The choice depends on the trader's risk tolerance and comfort with the extra risk for the potential higher return.
The VIX future is the actual spot market, representing the current market conditions. The VIX cash market is the future price of the VIX at the next expiration. The VIX is currently at 20.25, which is historically high, indicating a high level of market fear. The VIX future is lower than the spot market, indicating backwardation, which is a state where near-term volatility is higher than longer-term volatility.
The VIX future is the actual spot market, representing the current level of expected volatility. It is a derivative that reflects the market's expectation of future volatility. Traders can look at the VIX future to gauge the market's sentiment about future volatility.
The speaker believes Microsoft's stock is overpriced and that investors often experience seller's remorse, leading to rapid repurchases after selling.
The speaker mentions that there are regulations to get approval for starting a sports betting app, but there are no specific requirements on how tight the markets can be. However, the speaker suggests that the apps do not make markets themselves and rely on third-party high-frequency trading.
The speaker discusses trading in a one directional market by referencing their own trading experiences, including buying yen and bonds, and shorting the Nasdaq and Micron. They emphasize that trading in such markets involves a mix of successful and unsuccessful trades, with a 50/50 ratio of winners to losers.
The speaker discusses the challenges of trading one-directional markets, emphasizing the need for caution, selective positioning, and the importance of stepping back when necessary. They highlight that such markets are not sustainable and that traders should avoid overexposure.
The probability of profit for the June 250 puts trade is 88%, based on the current market conditions and the trade setup.
The Russell index is up $1.57 to 84.
Confidence in one's value and preparation are essential skills for negotiation. It is important to be able to justify why one is worth more money, rather than just stating it. Preparation and planning are crucial to avoid appearing unprepared or unprofessional.
Active listening is crucial in negotiations as it helps understand the other party's needs and perspectives, leading to more effective and mutually beneficial outcomes. It also builds trust and reduces misunderstandings.
The Japanese yen increased because there was a lack of sellers, and the market dynamics favored an upward move. The speaker explains that the puts (bearish options) were trading cheap, indicating low demand for selling the yen, while calls (bullish options) were rich, suggesting a higher probability of an upward move.
HyperLiquid is not available to retail customers in the US due to the illegality of perpetual futures in the US. It is primarily accessible to institutional customers and users outside the US who use a VPN. The platform is open to anyone but faces regulatory challenges in the US.
The speaker explains that traditional exchanges like CME offer access to a wide range of products (stocks, options, futures, etc.) from a single account, which is not possible with decentralized platforms. Additionally, CME is centrally cleared, which provides a level of security and standardization that decentralized platforms may lack. The speaker also notes that while HyperLiquid is more flexible, it is limited to the products available on the specific decentralized exchange it is hosted on.
The prediction model is a new tool launched on the Lost Dog platform that uses AI to forecast market outcomes. It is in its early stages and is designed to provide probabilistic insights into potential price movements, such as whether Solana (SOL) could reach $100 by the end of the year.
The AI can provide insights on potential Fed rate cuts, but the exact number is not specified in the transcript. The AI's capability is to search for information and provide answers based on available data.
The speaker does not use the Infatuation, but they express admiration for the platform and its ratings.
The speaker suggests that if gold breaks a thousand from its current level, it could be attributed to timing and overbought conditions rather than macroeconomic factors. The speaker acknowledges that while macroeconomic narratives may exist, they may not be reliable for trading decisions.
The speaker clarifies that the at-the-money option depends on the underlying asset. If the option is based on the spot price, 6,000 is at-the-money. If it's based on the futures price, 6,100 is at-the-money. The key is to match the underlying asset of the option with the relevant price.
Traders in the pit rely on real-time order flow, observing the volume and size of orders around them. They focus on making small profits, often in the range of nickels, dimes, or quarters, by identifying edges in the market. This approach contrasts with modern trading, which often relies on theoretical value and complex models.
Successful traders were faster, maintained better position control, and knew how to spread their positions across various trades and orders. They were also more adaptable and participated in a variety of trades. Unsuccessful traders were often one-dimensional and slower.
The CFA is a challenging certification that may still hold value in the financial industry despite the rise of AI. While AI is expected to transform various sectors, including finance, the CFA may remain relevant, particularly for legacy firms that are slow to adapt. The speaker suggests that pursuing the CFA is a worthwhile investment of time and resources, as it can provide a competitive edge in certain roles, even as AI reshapes the industry. However, the speaker also cautions against overestimating AI's ability to replace human expertise, emphasizing that AI's impact is more likely to be transformational rather than entirely disruptive.
The ideal range for portfolio theta is 0.1 to 0.3 percent of net lick, depending on account size. This range is considered more accurate than the 0.5% threshold often cited, as it balances gamma risk and theta gains. A 0.2% range is highlighted as a sweet spot for most accounts, with 0.1% being acceptable in certain scenarios. Higher theta levels, such as 0.5%, are deemed unsustainable and risky due to excessive gamma exposure.
The speaker advises against starting a Subway franchise, preferring liquid products and a diversified portfolio in the stock market. They suggest a mix of longs, shorts, and options positions, emphasizing the importance of aligning investments with personal comfort and convenience.
Yes, extremely high institutional ownership can become a bad thing during market crashes. Institutions may need to liquidate positions, leading to significant selling pressure and further price declines. This was evident in Enphase (ENPH), which saw a sharp drop despite high institutional ownership.
Implied volatility is always priced higher than realized volatility because it reflects the market's expectation of future price movements, which includes a margin for uncertainty and potential fat tail events. Fat tail events occur more frequently than statistical models predict, which is why traders often sell options at a premium to fair value. However, these events can lead to significant losses if not properly hedged. While hedging is important, it is not a major part of the strategy for many traders.
The answer suggests starting with a universe of high-volume options to increase the likelihood of finding viable spread opportunities. It also highlights the limitations of trade scanners and the need for a more manual or tailored approach.
The change in earnings announcements from quarterly to semi-annual may reduce volatility in stocks, as companies will have fewer earnings reports. However, it may also affect the profits of trading firms, particularly those reliant on high-frequency trading. The speaker suggests that this change could lead to more passive investing and potentially give some companies an opportunity to hide deficiencies.
The average true range (ATR) is a measure of market volatility. It is used to estimate the expected price movement of a stock. The speaker suggests that while ATR is a traditional method, it can be replaced with option delta analysis for more flexibility and precision.
The best time to roll futures contracts is before the expiration date, ideally before the market closes on the day of expiration. The speaker advises traders to roll out of expiring futures contracts before the expiration date to avoid the risk of the contract being closed out.
The speaker expresses a positive opinion about college basketball, mentioning that Duke and Arizona are good teams and that the tournament is enjoyable with the potential for upsets and Cinderella stories.
The speaker mentioned that they sent Sol today's show yesterday for Mother's Day, indicating they did wish her a happy Mother's Day.
The speaker discusses the concept of identifying when market mechanics no longer apply, suggesting that traders should be aware of invalidation points and remain adaptable to changing market conditions. The answer emphasizes the importance of recognizing when a strategy or market behavior is no longer effective.
The speaker asserts that mechanics always apply, even in irrational market conditions. While the market may seem irrational, the underlying trading strategies and mechanics remain valid and should not be abandoned.
The speaker is uncertain about this approach, stating that they do not know and suggest that gold has been a two-sided market while the SPX has been a runaway train.
A horrible market is defined as one with low liquidity and high uncertainty, but the speaker emphasizes that a market moving in one direction is particularly problematic. They prefer markets with more volatility and uncertainty as they offer more trading opportunities.
The speaker believes that ideas are not inherently valuable and that their worth lies in their execution and outcomes, not in their ownership. They emphasize that ideas should not be the focus but rather the starting point for action.
The speaker differentiates between a bad boss and a hard taskmaster by emphasizing that a hard taskmaster can be beneficial if there is a method to the madness and a clear purpose. A bad boss, on the other hand, lacks a purpose and may be incompetent or sociopathic. The key is whether the taskmaster's demands serve a purpose and contribute to the overall success of the team.
The speaker defines a soft skill as a more sensitive approach to leadership and interpersonal interactions, such as being a better listener or being more aware of others' emotional states. However, the speaker expresses a dislike for this concept, suggesting it may be seen as trivial or unnecessary.
The speaker acknowledges that while it's almost impossible not to change trading approaches based on market conditions, it's rarely the right move. The key is to stick to optimized mechanics supported by mathematical models rather than making impulsive adjustments.
Accepting market irrationality is crucial for a trader's survival. It allows traders to make decisions despite unpredictable market behavior, which is a key aspect of long-term success in trading.
The speaker suggests that adapting trading strategies to market conditions is crucial. They emphasize the importance of accepting the market's irrational behavior as a critical part of survival in trading.
The speaker acknowledges that the market's rise before the final resolution of overseas issues is not surprising, as it is a common pattern. However, the speaker also notes that the market's behavior is influenced by various factors, including uncertainty and volatility.
The speaker believes oil will come down a little but not to cheap levels, as there will be no resolution to the conflict. The expected range is into the low 80s, with higher gas prices likely to persist.
The best thing that happened to the speaker was opening a teen trading account for their daughter, which they believe will help her learn to trade. They also mentioned enjoying Italian Easter cake and breakfast tacos.
The transcript mentions that Gogo is a company that provides internet services on airplanes, though it is unclear what Gogo does now. It also references the transition from AT&T to other providers like Starlink.
The speaker mentions that the bill in LA was not a traditional meal bill but a ticket price. The ticket included non-alcoholic pairings and wine, with the total cost being around $1,500 per ticket.
The best day of the week was the day they rescued the pilot, as it was considered a significant and impressive event.
The speaker believes that companies are not taking advantage of the job market shortage but rather adapting to changing conditions. They suggest that internships are a way for companies to evaluate potential full-time hires, and both parties can benefit if the internship meets the needs of the business and the candidate.
Networking to get an internship involves leveraging personal connections, such as friends, family, or alumni. It also includes applying through university programs and online platforms. Knowing someone who can introduce you to potential employers increases your chances of securing an internship.
Networking for internships involves various methods such as personal connections, university programs, or persistent outreach. The speaker emphasizes the importance of proactive effort and starting early, as internships often fill up quickly. Examples include getting referrals from friends, leveraging university resources, and maintaining consistent communication with potential mentors.
The speaker indicates that internships are valued by employers, as evidenced by the detailed process of engaging with interns, including lunch meetings and presentations. However, the speaker acknowledges that some employers may misuse internships, but this is not universally true.
The most important takeaway from an internship is the actual experience itself. The internship's specific field is less important than the experience gained, as long as it is useful. Internships help individuals mature, make different kinds of friends, and interact in different environments.
The speaker clarifies that while they primarily buy the dip during sell-offs, the strategy can also be applied in bullish markets for swing trading or scalping. They emphasize that buying the dip is more effective during sell-offs, as these are seen as more reliable opportunities for undervalued assets.
The preferred investment vehicle for buying the dip is stock, specifically outright stock purchases. For scalping, S&P futures are mentioned, but for buying the dip, stock is the primary choice.
Buy the dip is not based on mean reversion, as price is not mean reverting. However, it is supported by statistical odds and positive drift, which suggest that the market tends to move higher over time. This makes buy the dip a subjective strategy with a statistical basis.
Scalping is a trading strategy where traders make quick trades to profit from small price movements, often within seconds or minutes. The speaker mentions that scalping is discussed in an upcoming segment and describes it as flipping houses in every 30 seconds, indicating a high-frequency trading approach.
The speaker believes the market will be choppy with a small bias to the upside. They suggest that the market will have a mix of movements with a slight upward trend.
The speaker is questioning whether the recent Bitcoin price increase is a sustainable breakout.
The most popular misconception is waiting for confirmation of a move before entering a trade, which the speaker considers a poor strategy.
If you're in the front month of September, you might look to go out to October.
The speaker suggests a rule of thumb: for a $300 stock, a spread wider than 30 cents is too wide; for a $200 stock, wider than 20 cents is too wide. They also mention checking volume and open interest, and suggest placing orders around mid-price with small adjustments.
The speaker states that national debt does not directly affect trading decisions and is not part of any equations traders use. They suggest focusing on controllable factors rather than worrying about uncontrollable ones like national debt.
The speaker likes Intel at 85 and suggests a long diagonal spread in Intel.
The speaker does not use it often. It's one that uses a lot of buying power relative to other strategies that you can use. When do I use it? On a lower price stock, uh basis is low, volatility is high on the options, that's when I that's when I use it. Basis is low and volatility is low on the options. It's a consideration.
IBIT is up almost a dollar 90.
The speaker has never left the market and keeps all strategies consistent. They do not reduce strategies but keep them consistent.
You are very consistent.
The Treasury's bond buybacks, which were doubled to $4 billion per operation, were discussed as a potential intervention to combat rising yields. However, the market response indicated that the intervention may not be effective in preventing a genuine repricing of bonds. The speaker suggests that the scale of the buybacks was too small to have a significant impact on the market.
The 30-year bond is in a range of 4.7 to 5.25.
Commercial real estate faces headwinds due to reduced space demand and structural issues, while residential real estate is a sellers' market with limited supply. The speaker is not bullish on real estate currently.
The speaker is unsure about the width of the strangle and suggests that the market is pricing in a move of around 5.5%.
The speaker mentions that they turned down an offer of 200 billion, and it seemed ridiculous at the time. They acknowledge that it was a missed opportunity.
The speaker has not traded HPE (Hula Packard) in a long time and does not have an opinion on its range or performance. They compare it to Coca-Cola, stating it doesn't move much.
The Treasury market is bigger than Nvidia, but on a for traders, Nvidia's huge compared to treasuries.
Zero day options, which are short-term options, have become a significant part of the market, accounting for 60% of S&P index buying. The speaker suggests that the market calm observed might be due to the short expiration dates of these options, which prevent significant market movements. The speaker also notes that the options clearing corporation initially had concerns about market risk and margin requirements but later moved away from these concerns.
There is no evidence that zero-day trading has increased market volatility. In fact, volatility has decreased, and zero-day trading has supplied more positive gamma to the market.
It would if there was some trading in there. Unfortunately, USD Canadian dollar options don't trade at all. The currency pair trades a little bit, but hasn't really moved much.
The markets are showing minimal movement, with the S&P and NASDAQ unchanged. Gold and silver have shown upward movement, with gold up almost five dollars and silver up 89,000. Bitcoin and Ethereum have also seen some movement, with Bitcoin catching a bid and Ethereum rising above $3,000. Bonds are stuck in a range, with the 114s at 11521. The implied volatility (IV) in the bond market is very low.
The speaker is an anti-macro person, indicating a preference for technical analysis and market participation over macroeconomic discussions. They emphasize the importance of market participation and technical analysis in their trading approach.
Placing stops with iron condors can increase the chances of the trade being a losing trade due to the risk of being filled at unfavorable prices. Instead, using stop limits with a buffer is recommended to ensure better execution prices.
When investing in a friend or family member's startup, it's important to consider the statistical likelihood of success, invest only a reasonable amount of capital, ensure the investment is in equity rather than loans or convertible instruments, and be prepared to accept the possibility of losing the investment. The speaker also emphasizes the importance of maintaining a clear understanding of the risks and not investing more than one can afford to lose.
The speaker suggests rolling out the position due to the high premium and the potential for a reversal. The speaker also mentions the possibility of adding a stop loss at 87, but emphasizes the importance of managing the trade within the overall portfolio.
The speaker states that they are not checklist people and instead emphasizes the importance of being fully committed to the business idea. They suggest doubling the estimated capital and time required, as things often cost more and take longer than anticipated. The key question is whether the individual is fully committed, as starting a business part-time is not advisable.
The biggest thing to consider is full commitment and persistence. The speaker emphasizes that one must be fully dedicated to the process, even if it involves significant personal sacrifice. This dedication leads to learning and growth, even if the outcome is uncertain.
Raising capital in the investment management space is extremely difficult and requires more than just financial acumen. It involves significant sales efforts and the ability to manage relationships with potential investors. The speaker notes that managing a fund or hedge fund requires becoming a salesman and a babysitter, as the process involves not only attracting capital but also maintaining trust and managing the expectations of investors.
The discussion suggests that AI could replace high-paid employees like CEOs and CFOs, as these roles involve tasks that can be automated, such as managing numbers and financial data. However, the ability of AI to replace leadership roles is debated, as it involves creativity and decision-making beyond numerical tasks.
The discussion suggests that AI could potentially replace a CMO, but the speaker argues that leadership and strategic decision-making are complex and require human judgment, making it difficult for AI to fully replace such roles.
The speaker mentions that wheat can be traded, but it is more difficult compared to other pairs like ES and NQ. They also mention that pairs like soybeans versus wheat have been traded before, but they are more challenging due to their lower liquidity and higher risk.
The speaker is unfamiliar with VTI and VWO but explains that liquidity in options for these ETFs is not sufficient. They suggest that trading the S&P 500 is more liquid and preferable for total stock market exposure, while EM funds like EM are still considered more liquid than VWO. The Footsie is deemed illiquid and not suitable for trading.
Hedging is not a universal necessity for all traders. It depends on individual trading styles, market conditions, and personal risk tolerance. The speaker suggests that hedging should be used strategically, similar to how a NASCAR driver might use brakes in certain situations.
The speaker explains that hedging involves strategies like selling a call or a put, which do not add capital. However, the speaker is opposed to adding capital to positions and prefers reducing trade size as a more effective hedging method.
The speaker mentions that they will send an article related to the prediction, but the specific prediction is not detailed in the transcript. The focus is on the value of experiences and how they are becoming more valuable compared to traditional goods.
The restaurant mentioned is Chicken Hut, a famous Chicago chicken spot.
The SEC's decision to approve changes to the pattern day trading rule will result in the rule being phased out 45 days from its posting. This change will eliminate the restriction on frequent trading on margin, affecting retail traders and potentially altering market dynamics.
The speakers do not find any single financial news source more valuable than others. They criticize most financial news sources for being cheerleaders that promote bullish market sentiment. They acknowledge the role of financial media in engaging audiences but express skepticism about its objectivity.
The main argument is that building a professional network is about cultivating reciprocal relationships, which are essential for creating value over a lifetime of business. The speaker emphasizes that no one can succeed alone and that a network is crucial for accessing resources and expertise.
The speaker provides an example of giving by offering software, content, and other resources without expecting immediate returns. This is part of a broader strategy of being a 'giver first' in professional and personal relationships.
Building a professional network involves engaging in various activities such as attending industry events, utilizing digital platforms, and interacting with existing contacts. The speaker emphasizes the importance of being proactive and consistently engaging in networking efforts, even when working remotely.
The speaker mentioned that they had not sent a card in their life, and they were surprised to learn that others might still send cards, particularly for birthdays or other occasions.
The S&P 500 is currently at 7029, with the speaker having sold it at 7011 and bought some back this morning. The speaker is still short and sold some Nasdaq.
Trade size is considered the primary method to manage outlier risk, especially for naked shorts. However, for options traders, using spreads can cap outlier risk. Outlier risk is unquantifiable and cannot be managed through stop orders or other traditional methods.
Outlier risk refers to the risk of unexpected market shocks that can lead to significant losses. It is the risk of events that are statistically unlikely but can have a large impact on trading outcomes.
Stress testing for outlier risk is possible using historical events like the October 1987 crash, 9/11, or Japan's market crash. While it's not perfect, it provides insight into how positions might perform in extreme situations. AI tools can also be used to simulate and test various scenarios, making the process more efficient.
Outlier moves are generally mean reverting, but the extent of reversion varies. Down moves tend to have a higher chance of mean reversion compared to up moves. However, the reversion is not guaranteed to return to the original price level. The mean reversion from downside moves is often faster and more significant than from upside moves.
The transcript mentions that there are a few bank earnings reports today, including PNC, Morgan Stanley, and Bank of America. However, the speaker refers to these as 'garbage' and suggests that the main earnings report to watch is Netflix's, which is scheduled for tomorrow.
The best business advice is to never give up and to always have something left in the tank to keep going. Additionally, it's important to take risks whenever possible and to act on opportunities without hesitation.
The speaker suggests that the individual should sleep less and consider getting rid of their fiancée, implying that time management and reducing personal commitments are key to handling multiple businesses effectively. The answer is framed as a humorous yet direct suggestion to prioritize work over personal life.
The speaker suggests that if one of the three businesses is not getting the attention it needs, it may not be performing as well as it should. It's important to address this issue with the relevant stakeholders.
The speaker recommends that employees sit down with their manager and discuss their performance and the fairness of the raise system. They should express concerns about the lack of individual consideration and request a review of their compensation based on their contributions.
The speaker has been trading silver and natural gas, with a focus on strangles. They mention experiencing significant daily moves in natural gas and are considering rolling positions or taking a loss.
The natural gas contract is described as a monster with high volatility. It is the most volatile futures options contract, with the highest volatility over the last 10 years. The contract size is not explicitly stated, but it is noted to be highly liquid and risky.
The term 'widowmaker' originated from the CME floor traders who faced extreme risks with the calendar spread between March and April natural gas futures. This spread was known for its volatility, leading to significant losses and metaphorically 'making widows.' The term highlights the dangers of leveraged trading in volatile markets.
The speaker finds it frustrating because absolute point changes (e.g., up 10 points) are less informative and harder to interpret without context. They prefer percentage changes (e.g., up 5%) as they provide a clearer understanding of market performance.
Percentages can be misleading without context, while handles provide a clearer understanding of actual gains or losses. Handles are preferred in trading discussions to avoid ambiguity.
A collar strategy is used to limit downside risk while retaining upside potential for a portfolio of highly correlated assets. It involves selling call spreads above the market and buying put spreads below the market to create a protective barrier.
The speaker believes that the option strategies taught are more appropriate for active market participants who prefer an active approach over a passive one. However, they acknowledge that passive strategies may be more suitable for certain market conditions or for individuals who prefer less involvement in their investments.
The current price of gold is $4,900.
The speaker mentions that there were earnings after the close, including Intel and ISRG. Some earnings were also reported before the open, such as for FCX, Hallebertton Proctor, and Gamble. The speaker notes that there are no major earnings expected on Friday.
The music is used as background to set the tone and mood of the trading show, without directly influencing the trading content or analysis.
The NASDAQ has opened at its weakest point, with significant declines in stocks like Apple and AMD, while other stocks like Reddit and Micron have shown recovery.
The speaker explains that zero DTE options are not affected by overnight volatility, so the focus should be on intraday volatility. They emphasize that overnight volatility is the main driver of large market moves, which is not relevant for zero DTE options.
The speaker suggests that every new business requires a pivot, and it's important to be prepared to pivot rather than having a contingency plan. They emphasize that pivoting is a natural part of business development and that it's easier to pivot in business compared to personal relationships due to less emotional involvement.
The speaker states that if you don't know when to pivot, you're out of business. Pivoting is a continuous process of learning and adapting based on what works and what doesn't. It's not a contingency plan but an ongoing adjustment to stay relevant and competitive.
The speaker suggests that the amount should be double or triple what one initially thinks is necessary. This is because the actual time and resources required to build a business often exceed initial estimates. The key is to ensure that the safety net allows for survival during the early stages of the business.
To raise capital, one must be willing to ask for it directly. It is not enough to present a project; the process involves proactive engagement and treating the capital as if it were one's own. The speaker emphasizes that many people misunderstand the process, thinking that presenting a project alone will lead to investment. Instead, the key is to be willing to ask and to treat the capital as if it were one's own, understanding the risks involved.
The speaker acknowledges that it's a common practice, but the approach matters. While he hasn't personally seen an offer letter, he suggests that the way it's approached determines the outcome. He emphasizes that if the employee is valuable, the employer may be willing to match the offer.
The transcript suggests that if an employee is offered a higher salary, they should consider it as a signal that their current compensation may be undervalued. However, if they stay in their current role, they may lose their negotiation power in future discussions. The key takeaway is that accepting a higher offer can be a strategic move to assert value and secure better compensation.
The recommended method is to engage in direct conversations with people in desired career fields, referred to as 'cups of coffee.' This approach helps bypass the limitations of automated resume screening systems (ATS) and increases the likelihood of connecting with hiring managers directly.
The speaker suggests that for accounts under $50,000, a 40% allocation is acceptable when the VIX is under 15. However, for larger accounts, this level is considered too high. The speaker's current allocation is in the mid-20s, reflecting a low VIX environment.
In-person meetings are considered more valuable as they create a stronger sense of energy and commitment, which cannot be replicated in virtual environments. The speaker emphasizes that every significant deal has been made in person, and that the physical presence is essential for fostering engagement and commitment.
The rules are not similar to futures margin requirements. The changes are not about margin requirements but about limiting the number of day trades for accounts under $25,000.
The speaker notes that the market was not doing much, with various assets moving up and down. They mention that the NASDAQ was weak, while the S&P was stronger. The speaker also comments on the volatility of certain stocks and commodities.
The speaker prefers an amazing defense, stating that Miami's defense is the best they've seen and that they are taking Miami at three.
The speaker humorously responds that they cannot provide an insider tip for events a year in advance, such as the Cubs winning the World Series. This highlights the unpredictability of future events and the limitations of predictive insights.
The speaker suggests that a 20% return is impressive, especially when considering the active nature of trading. They emphasize that passive returns can vary significantly and that active strategies can still yield strong results. The key is to avoid overthinking and stick to one's strategy.
The software is not designed to teach wealth building directly, but it is focused on building wealth through a different angle. The creators emphasize that their approach to wealth building has evolved over the past 25 years, focusing on active participation in the markets and learning how to take risk and make decisions. The software is part of a broader ecosystem aimed at including more people and building a different kind of financial platform.
The stable coin will offer higher rewards (e.g., 5% vs. 4% from Coinbase), be backed by US treasuries, and integrate with a digital ecosystem for tokenized securities, crypto, and financial services. It will also have embedded payment rails and partnerships with financial firms.
Recognizing personal value involves self-assessment and understanding one's worth in the professional context. This can lead to better pricing strategies and increased confidence in investing in oneself.
The answer suggests that while the idea is interesting and fun to consider, there is currently no market for such predictions. The discussion notes that prediction markets for salary trends for specific roles like senior civil engineers do not exist, and it is unlikely that they will be created in the near future. The answer also highlights that such predictions are not of interest to the market, and thus, there is no mechanism to trade these views.
The speaker suggests that the bond market is a viable option for playing the current uncertainty, recommending a 'buy the rumor, sell the news' strategy. This strategy is based on the idea that market participants often react to rumors before actual news is released, creating a short-term opportunity for traders.
The speaker and the other person discuss the analogy between career trajectories and stock trading. They suggest that switching jobs is similar to trading different stocks, but they caution that it's not necessarily a good thing. The speaker values individuals who stay in their jobs and are committed to their work, as they believe this leads to long-term success and recognition.
The speaker suggests reducing the capital allocation from 50-70% to 40-50% or even lower, emphasizing the need to maintain liquidity for opportunities when volatility increases. The rationale is that significant market moves and risks often occur when volatility is low, and being prepared with dry powder allows traders to capitalize on sudden changes.
The speaker acknowledges the value of online Discord groups for engagement and bringing people into the trading community, but cautions against placing too much trust in online trading gurus. The value lies in the engagement and community building rather than in the accuracy of predictions or advice.
The speaker recommends Interactive Brokers (IBKR) as the primary platform for trading emerging market derivatives due to its extensive network and support for listed markets globally. Saxo Bank is mentioned as an alternative, but it is noted to have poor user experience. The speaker emphasizes that IBKR is the only US-based platform that supports such trading, though it is expensive and requires regulatory compliance.
When evaluating a startup, it's important to ask general questions about runway rather than specific burn rates. This approach provides more context and allows the startup to explain their financial situation without being too direct. The answer suggests asking about the amount of runway rather than directly asking for burn rates or available cash.
Yes, it is completely reasonable to ask about a startup's runway. The transcript states that asking about runway is a practical and necessary question for potential employees to assess the financial health and sustainability of the startup. It is considered more important than asking about burn rate.
The silver-gold ratio is significant because it indicates the relative value of silver compared to gold. When the ratio is at all-time lows, it suggests that silver is undervalued relative to gold, which could signal potential for silver to outperform gold in the future.
The transcript suggests that the trade for Bregman was considered a good move, as it was described as free for an agent signing and Bregman was deemed better than any player the Cubs had.
The speaker mentions that the market is showing mixed signals, with Bitcoin slightly up, gold up, and the NASDAQ crashing. The VIX is noted as a painful indicator of market stress, with both its future and cash components showing significant increases. The speaker also discusses the movement of commodities like silver and bonds.
A fair starting salary can be estimated using a software tool that considers factors like your field of study, intended job location, and educational background. For students, the software provides an entry-level salary range based on these factors.
The speaker states they have never considered opening an online proprietary trading firm, citing high fees, regulatory burdens, and scalability issues as key concerns. They also mention that they shut down their own prop firm due to conflicts of interest.
Traders should start reducing size or taking a loss when a position becomes uncomfortable and emotionally disturbing. The key is to avoid adding to the position and make adjustments to reduce risk, such as rolling out in time or reducing size. If the position is causing significant emotional distress or financial harm, immediate action is necessary.
The speaker suggests that following the trend in silver could be a good strategy, as the price has increased significantly from 52 to 85. However, they also note that they do not trade that way and consider the question to be one that should be asked of others. The speaker implies that the trend was a friend in this case, but they do not endorse the strategy themselves.
The speaker suggests that marketing is a tough decision, and it's important to consider the cost and effectiveness. They recommend focusing on content marketing, which is more cost-effective and measurable compared to traditional marketing. They also mention that it's important to double the estimated cost for marketing and to be cautious about spending on services that may not yield results.
A 7 to 10% monthly return on a $30,000 account is considered unrealistic and excessively risky. Achieving 1.5 to 3% monthly is a more realistic and achievable goal, allowing for a broader range of strategies and reducing the need for high-risk positions.
The best way to manage a bull call spread trade is to take profits when the trade reaches a certain level of profitability, rather than waiting for maximum potential. The speaker suggests exiting the trade when it reaches a 50% profit, as the trade is unlikely to maximize within six months.
It is not better to just close it. It is better to adjust the untested side so it continues to take risk off the tested side. You never leg out of that trade. You need that untested side to hedge the risk on the tested side.
The ideal portfolio mix is suggested to be 20% stocks, 20-25% futures and futures options, and 50% options, with the rest in cash, crypto, or other alternatives. The speaker emphasizes adjusting the mix based on risk tolerance and market conditions, with a focus on balancing returns and risk.
The marshmallow test is a psychological experiment that suggests children who can wait for a reward tend to be more successful in life and career as adults. The discussion explores the importance of delayed gratification in trading and business, with the speaker noting that while it is critical, the younger generation may be facing challenges due to the prevalence of instant gratification in modern society.
The marshmallow test is a psychological experiment that measures delayed gratification. The speaker argues that it is outdated and not relevant to modern success, emphasizing instead the importance of quick decision-making and discipline in today's fast-paced environments.
Bitcoin is currently trading between 1500 and just under 92,000.
Taking profits at 50% refers to capturing half of the expected move based on implied volatility, not the forecasted move from charts. This is a strategy used by premium sellers and positions with defined expiration cycles, aiming for a high probability of success.
The speaker acknowledges that it is possible to achieve a 20% return on a $250,000 account with defined risk trades, but doubling one's money is not realistic. The speaker suggests that the goal should be adjusted to a more achievable return, and that the strategy should involve selling premium (e.g., shorting options) rather than directional trades with profit caps.
The trader in the question sold puts and was assigned, which required covering the position. The trader used a cash substitute (like SGOV or T-bills) to cover the margin, but interest was charged the next day. The speaker explains that this is due to the T+1 settlement rule, where the sale doesn't occur until the next day, and interest starts accruing the following day. The trader could have closed the position to avoid the interest charge.
The speaker states that there is a strong negative correlation between ZB (U.S. 30-year Treasury bond) and CL (Crude Oil). This correlation is noted as a significant factor in the bond market's movement, with the speaker suggesting that the bond market is acting as a 'bond vigilante' pushing yields down in anticipation of policy changes.
The speaker advises against trading such plays, stating that they are high-risk and not suitable for retail traders. The market indicates risk, and the options are not tradeable.
The speaker recommends a minimum account size of $25,000 and suggests a range of $50,000 to $100,000 for a more robust position. This is due to the high risk associated with volatility, where a single adverse event could severely impact the account.
The speaker discusses the challenges of preventing fraud in online sports betting, noting that leagues are connected to gambling sites and that there are concerns about players or their families benefiting from plays and stats. They suggest that leagues need to police their own players and eliminate conflicts of interest, such as allowing athletes to own betting books or casinos.
The main issue is the presence of corruption, conflicts of interest, and a lack of trust. The speaker highlights that scandals involving athletes and officials, such as the shaving scandal at Arizona State, indicate a broader credibility crisis. They argue that these issues undermine the integrity of institutions and the trust of the public.
Yes, diversifying through entering spreads on the same underlying at different strikes and times is a valid way to create more trades and diversify. This approach allows for more occurrences of trades and can be a smart way to approach the 'trade small and often' strategy.
The speaker acknowledges that transaction costs have decreased significantly over time, making them less of a concern. However, the speaker prefers simpler strategies due to their lower complexity and risk profile. The speaker emphasizes that the choice of strategy should be based on individual comfort and risk tolerance, suggesting that simpler strategies may be more suitable for those who are not comfortable with complex spreads.
The speaker argues that the stock market is too large to be manipulated by the 1%, and that the 1%ers are not effectively managing their own money. The speaker also points out that even large firms like BlackRock or Vanguard managing over 30 trillion dollars would not collectively sell off their holdings because it would be self-defeating.
The speaker has no issue with monthly dividend ETFs for retired individuals, provided the underlying assets are suitable for the investor's risk tolerance. They suggest selecting a sector the investor is comfortable with and emphasize that the dividend stream should be suitable for the principal risk the investor is taking.
The speaker suggests that buying stocks that have pulled back (i.e., oversold) is preferable to buying at new highs, as it statistically makes more sense. However, they acknowledge that there is no proof that this strategy is guaranteed to work, and there is equal chance of the stock going lower or higher.
The VIX approaching 30 is significant because it indicates increased market volatility. The speaker notes that this level is rare, occurring only 5-6% of the time, and that it could lead to wild swings in the market. The speaker also mentions that the VIX is currently at a 50% level over the mean, which is considered rare and could signal a potential shift in market sentiment.
The speaker does not see this as a significant problem, stating that they do not trade bonds outside of governments and that there is plenty of liquidity. They reference Amazon's bond issuance as an example of market liquidity supporting large trades.
Max loss and max draw down are the same thing. A spread is a spread, and a $30 spread can only go to $30 regardless of how much the product moves assuming it's SBX. The question is whether they are saying it's the same thing. The answer is yes.
A naked put is a straightforward strategy where you sell a put option, while a put ratio spread involves buying one put and selling another at a lower strike price. The put ratio spread is similar to a naked put but includes a synthetic short position, providing a cushion against market movements.
Theta decay over the weekend is unpredictable and varies depending on market conditions. It is not possible to predict exactly when the decay will occur, but it is known that it will happen by expiration. Liquidity providers may adjust volatility to account for potential news or events over the weekend. The decay can occur on Friday, stay bid, or come out on Monday, depending on market sentiment and events. There is no exact guide for when to sell premium, and it is an art rather than a science.
The list was pretty solid. Maybe post it someday.
XSP is cash-settled and does not have the risk of stock price movements after the close, unlike SPY. However, XSP may involve additional fees and has different tax implications compared to SPY.
The filtering process is simple and involves selecting stocks that are lower and bullish on the market, using options with a delta of 15 to 30, and focusing on monthly options with at least 30 days to expiration.
The speaker predicts a positive drift, suggesting that 2026 issuance will surpass 2025, citing increased capital raising for AI and other sectors. They estimate around 85% of the 2025 total, with a standard deviation of 70%.
The market's movement is attributed to the CPI data and the subsequent reaction, with some traders suggesting a 'buy the rumor, sell the news' dynamic.
Yes, the speaker likes the trade and provides details on the trade setup.
The stock is currently at $138.
The speaker lists several trades, including an Apple put spread (46%), Intel strangle (28%), Google broken wing butterfly, and a BU short put. The speaker also expresses a dislike for trading B.
The optimal trade is a wide strangle, where the same distance is covered on the call side as the put side, allowing for twice the money on the call side.
The speaker prefers BIL over ESG due to lower fees and suggests using about 85-95% of the $100,000 account.
You shouldn't have your entire account wrapped in futures because you could get liquidated. If you have a $30,000 account, you're not trading ES, you're looking to trade me, which is a tenth of the size.
It helps predict direction or simply tells you about volatility and the risk of exaggerated moves.
Building a watch list is important as it helps identify liquid market leaders and active indices that move the markets. Essentials include leading liquid market leaders, such as NQ, and focusing on commodities and futures that trade 24/5 and move markets.
The speaker emphasizes the importance of displaying last net change, bid, and ask price in at least four columns, acknowledging the preference for high and low values.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The probability of profit for the SpaceX trade is 94%.
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.
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.
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.
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.
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.
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.
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.
The expected move for MEES is approximately 50 handles or $250.
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.
Lost Dog is a platform designed to help career professionals assess their value in the job market and negotiate better salaries. It uses data from resumes and LinkedIn profiles to generate a 'Lost Dog score' that indicates the salary a professional should be realizing. The platform also provides guidance on upskilling and career decisions.
The platform offers benefits for working professionals, retirees with portfolios, and students. It provides actionable insights to improve career decisions and investment returns. For the first 50,000 subscribers, there are rewards including a share of 1 million in crypto, and a waived $100 annual fee for the first year.
The free crypto and Lost Dog subscription are part of a marketing strategy to scale the platform, improve its accuracy through user interaction, and create a moat against competition. The initiative allows users to try the platform for a year and decide whether to continue the subscription at $100 per year.
The speaker mentions that stable coins could operate similarly to credit cards for daily transactions, citing PIX in Brazil as a successful example. They also mention that Lost Dog is launching a stable coin and envision it functioning like a credit card for daily transactions.
The speaker explains that long wings need to be readjusted frequently, especially on days with significant SPX movements, such as the 90-point increase mentioned. They suggest that adjustments are necessary to maintain the strategy's effectiveness.
No, you cannot get assigned intraday. Assignments typically occur after market close.
The speaker recounts a story about two traders in the OEX pit who had a standoff where one said 'Sold' and the other said 'Buy him.' They eventually agreed on a large trade of 5,000 or 10,000 lots, which was considered one of the craziest trades due to the size and the egos involved.
The speaker suggests using LEAPS, long options, long stock, long crypto, and covered calls. However, they note that the downside risk during market declines can be significant. They also mention the availability of ETFs that track the downside, but the regulatory environment in Canada is restrictive, limiting the range of permissible strategies.
The optimal hedging strategy for a delta and Vega neutral options portfolio is to keep trade size in line and avoid over-adjusting positions. It is not recommended to use futures to offset deltas or to make large adjustments. The focus should be on monitoring trade size and managing risk through position control.
The speaker occasionally trades forex, primarily using currency futures and options. They prefer futures over spot forex due to its multidimensional nature, allowing for more strategic trading. They mention that spot forex is one-dimensional and not their preferred method, though they acknowledge its appeal due to leverage and improved platforms.
The speaker mentions that they spend at least a couple of hours a day on trading, but this can vary depending on the individual's multitasking abilities and how they integrate trading into their daily routine. The speaker also notes that trading can be done during the day or overnight, depending on personal preference and schedule.
The speaker believes that the ability to admit when one is wrong is more important than being right as much as possible. They argue that this ability is crucial for personal growth and avoiding the lowest form of life, which they describe as being unable to accept defeat or admit mistakes.
The speaker believes it is possible to live off of options trading, particularly by selling options. They express a desire to transition to full-time trading and provide for their family through this method. However, they acknowledge the risks and uncertainties involved in such a transition.
The speaker is expressing gratitude for being late and apologizing, then wishing the audience a great day and indicating they will see them tomorrow.
The speaker discusses the current market conditions, noting that Bitcoin is down 460, oil is down 23, S&P 500 is up 27, gold is up 49, NASDAQ is up 185, silver is up 377, VIX futures are down 23, and cash is down 24. The speaker also mentions Micron's stock is up 21 in change today.
The speaker dismisses this concern, stating that no idea is truly original and that large companies already own every idea. The focus should be on execution and people, not the fear of idea theft.
The speaker recommends ETHA for Ethereum and BTO for Bitcoin. They note that ETHA has high volatility and is the primary ETF for Ethereum, while BTO has the most option volume for Bitcoin. The speaker also mentions trading IBIT and BITO, but prefers BTO for its volume and liquidity.
The speaker discusses a situation where a business partner engaged in dishonest behavior, such as an affair with a customer. The speaker concludes that such behavior indicates a lack of trust and integrity, suggesting that the partner should not be trusted with financial responsibilities.
A rise in both the market and VIX can be seen as a red flag, indicating potential uncertainty or lack of confidence in the market's upward move. However, it does not necessarily mean a short-term reversal, as the market may continue to move higher despite the increased volatility.
Outsourcing is recommended for startups, especially when the founder is not a software developer. It can be quicker and cheaper, but it requires finding the right team and managing communication effectively. As the business grows, transitioning to in-house development can be beneficial.
The answer is no. While some traders may chase momentum, the price increase may not be supported by fundamental value. The risk of a rapid reversal is high, and traders should implement strict stop-loss strategies to manage potential losses.
Selling iron condors once a week for 3 to 4 weeks is considered a form of time diversification. It is one of several diversification methods, including volatility, underlying, strategy, and sector diversification. While not as robust as product or strategy diversification, it is a close second and provides meaningful risk mitigation.
Yes, some traders use strategies like strangles frequently, such as every five or ten minutes. However, this is considered a high-risk approach and is not the same as other strategies that use time to their benefit.
The speaker believes the space race is primarily about capital rather than technology. China is seen as the biggest competitor due to its access to capital and lower costs, while other countries like Russia face economic challenges. The US has an unlimited amount of capital, giving it an advantage in space ventures.
The speaker mentions that there was no specific moment where they felt they had 'struck a wheel' or achieved a major milestone. Instead, they emphasize the importance of maintaining a cautious mindset even after achieving profitability, as success in business is often temporary and the market remains unpredictable.
The secret sauce for the longevity of our partnership is knowing our strengths, having a tremendous amount of respect for each other, and trusting that we are doing our respective roles effectively. We divide responsibilities based on our strengths and maintain a respectful and trusting environment, even when we have disagreements.
The poll results indicate that 36% of respondents said 'Yes' and 64% said 'No'. The discussion highlights the complexity of such decisions, emphasizing that the answer depends on the context and the nature of the relationship.
Yes, volatility is a key component of the Black Scholes equation. It is considered the most significant input when it comes to pricing assets, and it is notoriously difficult to calculate accurately.
Some of them are 10-20% off their highs. These high-flying stocks.
The speaker suggests using a delta range around 30ish for the short strike and recommends a width of 20 to $30 for a $300 stock. They also mention that the strategy is suitable for a bullish portfolio.
You should be super careful because you don't know when the rotation is coming in and going out.
Don't ever forget the luck factors out over time. Don't change your trading strategy regardless of what that strategy is.
Research shows that adjusting the strike to a lower cost basis can provide more protection as the market moves down.
The cost increase is due to the nature of calendar spreads in European-style options, where early exercise is not allowed, and the risk associated with these trades is tied to the premium paid for the calendar spread.
Diversification is recommended. The speaker suggests that if the trade goes well, all accounts will benefit, but if it goes bad, the pressure of managing multiple accounts can be overwhelming. The answer emphasizes that the same trade should be executed based on size, with appropriate sizing for each account.
The speaker confirms that Tesla's report is on Thursday.
Tony suggests a put diagonal strategy for Apple, buying the August 21st 320 put and selling the August 3rd 310 put, with a bearish outlook.
Futures contracts such as the SNQ or long option contracts are better for trending markets.
The speaker suggests using FXY futures as an alternative to trading the yen directly, but acknowledges that there are other more profitable opportunities in the market.
The discussion explores whether large tech companies like TSMC, Google, Apple, Amazon, and others are too big to fail. It suggests that while these companies are significant, it's not clear if they are too big to fail, as their failure could impact the economy, but they might still be able to recover or be acquired.
The speaker suggests that buying close to all-time highs could be risky, as it depends on the company's performance and market conditions. They mention that if a company is acquired, it might be seen as a success, but if it fails, it could be a failure for shareholders.
The speaker has traded them but does not currently trade them, preferring other investments. They mention that three-time leverage ETFs are short-term trading vehicles and not suitable for long-term holding.
The speaker mentions that there are algorithmic platforms that accept retail money, but they do not engage with them personally. They note that some platforms, like Tasty, have APIs that are used for algorithmic trading, and they mention that some people use them for zero-day trades. However, they emphasize that this is not a follow-trade and requires proactive action based on a thesis.
It means the system uses a set of rules or logic to make decisions, but the specific details of what the algorithm does are not explained. The speaker emphasizes the importance of understanding the algorithm's logic to assess its effectiveness.
The speaker discusses whether large companies are too big to fail and considers the implications if capital dries up for capex. They suggest that these companies may not be able to borrow funds if needed, and the question of alternative financing methods is raised.
100%. Could it move outside the expected move? 100%.
The speaker suggests a two-sided trade with no directional bias in UNH, possibly involving strangles or iron condors, and notes that markets are wide and not easily tradable.
The speaker does not like to work and loves their 3-day weekend.
The speaker is unsure if the action is valid and expresses uncertainty about the effectiveness of the proposed action. They mention that they have not looked into it and are not taking any action.
The speaker discusses high income covered call funds, such as QQQI, SPI, SPYI, and others, which have been paying high returns due to the market's upward trend. These funds generate income by selling call options on underlying assets, which can be a viable investment vehicle for investors seeking regular income.
High income covered call funds can be a viable investment vehicle for bullish investors, offering monthly returns and capital appreciation. However, they carry principal risk and are not suitable for bear markets. Investors should stay with these funds if they have been working well and align with their bullish outlook.
QQQY and SPYI are relatively new instruments.
The key factors that can stall a career include an inability to collaborate, refusal to take on new tasks, and a lack of adaptability. Additionally, the inability to resolve conflict and resistance to feedback can also hinder career growth.
Yield curve trades are directional and can be thought of as pairs trades. They involve buying bonds and debts while reducing risk by about 80%. The key is to understand the directional movement of the yield curve and how it relates to broader market conditions.
Bonds dropped to 107-108 a couple of years ago, from around 124. This was a significant move.
The speaker states that Greeks are highly recommended to be managed in a runaway market, emphasizing their importance in risk management. They note that platforms like thinkorswim have popularized the use of Greeks, indicating their growing significance in trading.
The speaker explains that beta weighted delta changes when you have short options and the gamma causes the delta to change. If you only have stock, your delta never changes.
Beta weighted deltas simplify position management by allowing traders to assess overall risk without comparing individual assets. This method pre-prices changes in underlying assets and is used by high-frequency firms for effective risk management.
The probability of a three standard deviation move in a stock is approximately 1%, indicating it is a rare event.
The speaker mentions that they do not engage in scams, but acknowledges that there are certain scams they do not care about. They also share a story about a scam involving a cash card and JP Morgan's fraud department.
The speaker expresses skepticism about buying VIX calls, noting that it hasn't worked in the past. They suggest that the market could experience a sharp sell-off, which might push the VIX to 25-30 or even 50, indicating the potential for significant volatility.
The speaker did not sell puts yet, as they were rolling their other position. This indicates a strategic decision to adjust the trade rather than immediately executing the put sale.
The speaker suggests that the yield curve's wide spread indicates that the Fed may not be able to cut rates effectively, as the market is already pricing in expectations of rate cuts. The speaker also implies that the Fed's independence is compromised, making it more likely to cut rates despite market conditions.
The overnight futures markets do provide important insight and can influence trading decisions. However, they should not be viewed as a guarantee of future performance. The speaker emphasizes that while overnight markets matter, especially for those with positions, they should not be the sole basis for trading decisions.
The speaker believes oil prices will remain elevated until the market opens again and is short oil, expecting a $10 or $15 drop before a $10 rise. The speaker is short a skewed strangle on oil, which involves short calls with twice the delta of puts.
The speaker argues that personal fulfillment is not something that is handed to individuals but must be earned through effort and alignment with personal beliefs. This implies that individuals must actively seek and engage in work or activities that resonate with their values to achieve fulfillment.
Continuous learning is important for staying engaged, opening up new opportunities, and adapting to changes in one's field. It helps individuals remain relevant and motivated, even if it means stepping out of their comfort zones.
The speaker started trading after discovering a triangular arbitrage opportunity involving USD, USDT, and INR. He capitalized on this opportunity, increasing his capital from $5,000 to $35,000 in about 1.5 months. However, the market crashed, leading to significant losses, and he had to take a break to rebuild his financial situation.
The most important thing is to focus on the most liquid assets. This helps in reducing transaction costs and improving execution efficiency, which is crucial for competitive trading.
The core benefit of do-it-yourself investing is control, allowing individuals to manage their investments and personal finance goals independently. This contrasts with traditional financial services that often claim to help with personal financial goals, which the speaker finds misleading.
It used to take 2-3 years for new traders to become profitable, but the learning curve has been significantly condensed, with some suggesting it can now be done in a couple of hours.
The speaker avoids using navigation apps because they believe they know the best way to get everywhere, implying a preference for personal knowledge over technology.
AI will not kill selling strangles because they have no theoretical edge and are based on random market movements, which AI cannot predict or control.
The speaker is considering participating in the earnings-driven market movement, but is hesitant due to the potential risks. They acknowledge that selling puts on earnings reports has not worked so far and are reluctant to sell calls due to their existing short position.
The speaker mentions that businesses like Mario's, which previously operated on a cash-only basis, have moved to credit card payments, indicating a shift towards credit card usage.
The speaker suggests that a significant market decline can influence future market perceptions, but the exact impact is not specified. The discussion implies that such events may lead to a reassessment of trading strategies and risk management.
The speaker believes that a significant market decline can influence investor behavior and market expectations. The speaker suggests that such declines may lead to a shift in market dynamics, with potential for a reversal or continuation depending on subsequent market actions.
The market's overvaluation is attributed to hype around companies like SpaceX and anthropic open AI. This hype has driven stocks to all-time highs, with the speaker suggesting that people are selling to buy into SpaceX, indicating a speculative bubble.
A 1,600 handle decline in the NASDAQ is seen as a signal that the bullish trend may be ending. This creates opportunities for traders to take short positions or sell premium due to the high implied volatility and potential for price changes in stocks.
The expected move in the market for the trade is $77.
The expected move for the stock in the iron condor strategy was stated to be 77. The speaker recommended being about $100 out of the money to capitalize on the implied volatility.
The speaker suggests that financial literacy and market awareness can provide a strong foundation for understanding corporate strategy and economic trends, which can be beneficial in any profession. This understanding helps in making informed decisions and recognizing how external factors affect business performance.
Being a self-directed trader can help in any profession by providing a broader market outlook and a different sense of market awareness. Traders think like owners rather than employees, which can make them more valuable in their roles. They also have a better understanding of corporate strategy and market dynamics, which can enhance their professional value.
The S&P is up 60, NASDAQ is up 593, gold is down 22, oil is down $30, silver is down a dollar, and Bitcoin is up 35. This indicates a mixed performance across different asset classes.
The speaker believes that the end of the buy the dip run is in 2026, but acknowledges that this may be too early. The speaker also mentions that the end of the run may be on Friday.
The trader acknowledges that the strategy of using the premium from wheeling to do short-dated stuff is effective, with a 14% return last year. However, the trader notes that the 45-day SPX options caused issues in April, but the overall approach remains effective.
The speaker suggests that traders should adjust their approach based on the current market conditions, which include higher volatility and larger expected moves. They recommend reducing position size when nervous and setting wider profit and loss targets to accommodate the increased volatility.
In high volatility markets, the role of a trader is to stress test positions at 2x the expected move, particularly during earnings seasons. This involves preparing for extreme scenarios and leveraging amplified market movements to capture larger returns.
The speaker mentions buying ETH on Friday at a price of 1550 something.
The PDP rule, introduced by Scott, has significantly transformed the trading community by changing people's lives for the better. This rule is highlighted as a pivotal development that has had a lasting impact on trading practices and strategies.
The software being developed is called 'Lost Dog', and the first release is expected to be rolled out with a brand new UI next week.
The speaker is suggesting to show a rerun of a video, possibly related to a previous segment or performance. This indicates a request to change the content being displayed, likely for entertainment or informational purposes.
The speaker refers to the 'buy the dip' strategy as an overrated market narrative. They argue that this strategy has been overhyped and may lead to market corrections. The speaker also mentions that crude oil and AI are other overrated narratives.
The speaker discusses the importance of realistic expectations and the complexity of success in business. They emphasize that success requires more than just an idea or product; it involves continuous adjustments, risk management, and understanding market dynamics. They also mention the analogy of Shane Lowry's golf tournament, highlighting that success is not about being 'due' but about aligning one's skills with the right opportunities.
Trading only futures options is viable, but it limits the trader's exposure to a narrower set of instruments. The speaker suggests that while it's not inherently flawed, it restricts the trader's ability to explore other options strategies. The key takeaway is that traders should remain open to expanding their strategies if they feel comfortable and their current approach is profitable.
The speaker wishes he had started trading earlier, as he believes it would have provided valuable experience and skills. He notes that trading tools were not as accessible when he was 19, making it difficult to begin.
A 529 plan is for parents, not kids. Kids can trade in their own accounts when they are over 18.
The speaker believes that AI will significantly change the financial advising landscape by making advisors smarter and cheaper. Advisors will have access to more information and can provide better advice at lower costs. However, the role of advisors will shift from making decisions to providing emotional support and empathy. The speaker suggests that AI will take over the decision-making process, leaving advisors to focus on the human aspects of financial advice.
Focus on market structure classes, particularly those covering derivatives and exchange-focused topics. Understanding auction marketplaces and how they function is essential for trading. Derivatives are recommended as they provide a more complex and comprehensive learning experience compared to equities.
Yes, the speaker advises adjusting zero days by rolling up puts or down calls as needed. The speaker emphasizes that adjusting positions is crucial to manage risk and volatility, and not adjusting can lead to significant losses.
The Fed's actions, particularly rate hikes or changes in rate cut projections, could indicate a market pullback. If the Fed were to reverse course and raise rates, or if they were to remove rate cuts from the table due to external factors like the war in the Middle East, this could lead to a significant market pullback. However, the Fed is currently in 'catastrophic protection mode,' and its actions are expected to focus on stability rather than moving the market.
The speaker suggests that oil prices above $80 could cause market nervousness, with prices above $90 or $100 potentially leading to significant market pressure. The VIX, a measure of market fear, is mentioned as a relevant indicator, though it is not directly tied to oil prices.
The speaker acknowledges the question but states that he is not familiar with Canadian statutory holidays. He mentions that the US market does not typically rally on Canadian holidays and that the concept of market rallies on such days is not reliable, as triple witching events have not shown consistent positive results in recent years.
The shoes mentioned in the discussion range from $3,000 to $5,000, with a few pairs priced at $13,000 to $15,000.
The IV rank is updated in real time, reflecting the latest changes in options prices. It is not based on yesterday's data but is instead tick for tick as the market moves. The IV rank is normalized at the close to reflect the maximum volatility observed during the day.
The speaker suggests that the difficulty of scalping in the futures market is due to the nature of the market itself, with layers of activity occurring in microseconds and the inherent challenges of the market structure. It is implied that the market's behavior is consistent and does not simplify over time.
The S&P 500's current trend is described as complacency rather than a melt-up.
The speaker argues that this rule would have kicked out nearly every generational winner too early. They suggest that taking profits early is a better strategy, as letting a winning trade continue can lead to losses. The speaker also mentions that most trades have a 50/50 chance of being a winner or a loser, making the rule less effective.
Single stock futures have been around for decades but haven't taken off. They've been redesigned to be more retail-friendly with a multiplier of 100 shares, offering 6 to 1 leverage compared to 4 to 1 for stocks. The speaker doubts they'll have a significant impact on the stock market, citing better liquidity in stocks.
Yes, it is normal. When option traders are successful, stock traders often struggle, and vice versa. This is due to the nature of their strategies and market conditions.
No, the ability to hold 100 shares has nothing to do with trading options. You can trade options with smaller capital by using spreads.
The speaker states that statistically, the answer is 50/50, but the dog pound's survey indicates 56% of people believe it will happen, while 44% think it won't. The speaker acknowledges the uncertainty and suggests that the market's movement is influenced by various factors.
Earnings results matter to traders if they have a position, but traders often care more about the event itself and the volatility it brings. Earnings results are not always directly correlated with stock price movements due to market expectations and pricing.
No. You have to think about things differently. In a IRA account, if you're selling puts in their cash secured, you can go to the entire account balance.
Haboob
email Tom at lostdog.com for questions
It's a little bit of a crowded trade, but people love their metals.
The speaker considers bonds to be a commodity, despite the ability to issue more of them, due to the demand for long-term bonds.
The micro gold contract (MGC) is 10-oz, while the 1-oz contract is referred to as OZ. The GC (100-oz) is larger.
Nothing. I'm fine.
The VIX one-day volatility is reported as 564, indicating extremely low volatility and a market halt.
The market is experiencing high volatility despite rising interest rates, and there's a discussion about gamma risk. The speaker mentions that most retail investors don't understand the buying power requirements to cover gamma risk, and that volatility is currently cheap, which can lead to gamma risk. However, the speaker also notes that when volatility is low, it usually doesn't get killed, and the VIX futures are up today.
It could be a short squeeze, but it's also a meme stock. The speaker is unsure and suggests it's a trade if the stock drops under eight bucks.
It doesn't matter anymore because they roll all of their longer dated put on a 45 days to the next month when there's around 21 days to expiration.
The speaker prefers Wendy's over McDonald's and Burger King, but acknowledges that the choice is subjective and others may have different preferences.
SMCI is not expected to return to all-time highs. It has lost 75% of its value from its high and is unlikely to reach those levels soon.
No.
The face value of a ticket for a Cubs game in lower boxes is estimated to be between $150 and $275. However, the speaker mentions that tickets can be purchased for as low as $33, including fees, on platforms like StubHub or SeatGeek.
The speaker acknowledges that many people believe it's easier to buy during rallies rather than dips, and they agree with this view. However, they also mention that they made a short position on silver, which was a small trade, and it has since declined slightly.
The speaker suggests that Spirit Airlines is not a good investment due to its poor business model and the government's potential involvement. They also mention that the stock price was very low before the announcement of the deal with Frontier.
The speaker states that they do not buy stocks that are at all-time highs, but they will buy stocks that are cheap relative to everything else even if the market is at all-time highs. They argue that buying at all-time highs is random and not a reliable strategy.
The expected move for Micron this week is $41, but the actual move was $45, which was larger than anticipated.
Trading and investing can help new college graduates by providing them with a unique skill set that differentiates them in the job market. Understanding how free markets work can make individuals more valuable, especially in roles where market dynamics are relevant. This knowledge can be leveraged to demonstrate a deeper understanding of business operations and how to make a difference in various roles.
To differentiate in a competitive job market, one should demonstrate a deep understanding of market dynamics and articulate how markets are predictive and powerful. This includes explaining how money flows and how markets generate reality, which can set candidates apart from others with similar qualifications.
The speaker states they are not worried about the widget space right now, as they believe fear is measurable and that the market already prices in such risks. They also mention that they are not concerned about the widget business going out of business.
To defend a bad trade in a runaway market, reduce your delta by adjusting positions, such as selling puts or moving them up, or rolling out in time to reduce delta by about 25%. These actions help manage risk and recenter the trade.
Reduce your delta by 25% with each adjustment. This involves recentering the trade, rolling out in time, or rolling the position. Additionally, reduce your position size to mitigate further losses.
The Lost Dog platform includes a variety of new option tools, prediction marketplaces, and other financial tools. It also allows users to search for financial predictions and participate in real markets. The platform is expected to expand its capabilities over the next few weeks, including connecting to different prediction exchanges.
The speaker mentions that the 1987 crash was not solely due to program trading but was initiated by United Airlines, though there is some confusion about the exact year and event. The speaker also notes that the market was in a state of overvaluation and that the crash was a result of a combination of factors, including investor psychology and market dynamics.
The speaker believes the market will turn around on its own merits of being overbought, rather than through external factors like overnight moves or geopolitical events. The speaker also notes that the market's turning point will be when it catches everyone by surprise.
The speaker refuses to stop discussing silver, indicating a continued interest in the topic.
The speaker mentions that kids today primarily use texting and do not learn cursive writing. They note that their children do not learn cursive, and they themselves are a block printer. This indicates a shift in educational focus towards digital communication.
The speaker suggests that while youth and innocence may play a role, the key factor is the ability to focus on core strengths and avoid overextending. This principle applies to both entrepreneurship and trading.
The speaker discusses how online shopping has changed the retail landscape, making it difficult for traditional department stores to compete. However, they also note that some consumers still prefer in-store experiences for tactile interactions and personal service.
The longevity of the partnership is attributed to both the strength of their professional relationship and their complementary skills. They emphasize that their partnership has been successful due to mutual respect, differing skill sets, and a shared commitment to their work. They also mention that they don't overthink their approach, allowing their partnership to function smoothly.
The speaker recommends getting some work experience before pursuing an MBA. This is because MBA programs often require work experience, and having it can help students better understand their career goals and what they want to achieve in their studies.
The speaker suggests gaining work experience first, as it provides practical learning and professional growth. However, they also mention that an MBA can be valuable if combined with work experience, either part-time or through employer support.
To get into a career in transfer pricing, one should focus on developing skills in benchmarking analysis, documentation, dispute resolution, data analytics, and industry specialization. A strong grasp of economic theory, financial law, and tax and legal frameworks is essential. Certifications and training in relevant areas are also important.
The speaker mentions that buying options could be considered in certain conditions, such as when volatility is low and the trader has a specific directional hunch. However, the speaker emphasizes that this is not a preferred strategy and is only considered under rare conditions.
The speaker suggests an iterative approach, where ideas are tested and refined through continuous adjustment. They emphasize that validation often occurs after success, with critics later claiming they had foreseen the idea's potential. The process involves 'kneading the dough' by mixing and matching elements until a product feels right.
Intense rivalries in sports, such as the Bears-Packers rivalry, are significant because they create a competitive and passionate atmosphere. These rivalries are rare and valuable, contrasting with the current trend of teams being friends. The speaker emphasizes that such rivalries are unique and exciting aspects of sports.
The W-2 culture is criticized as a flawed system that encourages people to work for the man and makes it difficult to obtain a home loan without consistent income. The system is seen as flawed because it prioritizes certainty and risks the lender's ability to sell mortgages. Alternatives include increasing down payments to reduce risk, but the system is considered better than alternatives globally.
Bitcoin is selling off slightly, with the price at 1596.
The speaker rates the sandwich place as 'very good' and acknowledges that it is not life-changing but is significantly better than other similar places like JP.
The speaker acknowledges the SpaceX IPO as a significant event, with a valuation of 1.77 trillion. However, they express skepticism, suggesting it may be more of a joke. The event is expected to be discussed extensively, indicating its potential influence on market dynamics and investor sentiment.
The speaker mentions trading pre-market in the mornings and sometimes in the evenings. The reasons include capturing early market movements and taking advantage of information released outside regular trading hours. The speaker also notes that trading frequency varies depending on the day and market conditions.
The speaker explains that the naked put offers higher potential returns and allows for more flexibility in managing risk through adjustments. However, it also exposes the trader to greater risk if the stock moves against them. The speaker acknowledges that the $10 wide put spread is a safer option with a lower risk profile, but the naked put is preferred for the potential reward and the ability to adjust the position.
The SpaceX IPO is viewed as a potential transformational moment for the stock market, possibly marking a market top due to the simultaneous IPOs of SpaceX, Anthropic, and Open AAI. However, the speaker suggests it may not be as transformative as commonly believed, and it could be a bubble-popping event. The speaker also notes that the IPO is likely to be oversubscribed and may trade at a high price on the first day.
The expected move for the July 70 puts on Robin Hood is $13.
The expected move for the NASDAQ in the next 30 days is 1,200 handles.
A job seeker who doesn't know anything about the company they're interviewing with should leave the interview. This is because demonstrating a lack of knowledge about the company can be a red flag for the interviewer.
A calendar spread involves buying and selling options with different expiration dates. The speaker explains that the strategy relies on the difference in time decay between the short and long expiration dates. The trader aims to profit from the difference in the rate at which the options decay, with the long expiration providing more time for the underlying asset to move in a favorable direction.
A calendar spread involves selling a shorter-term option and buying a longer-term option with the same strike price. Profits are made if the underlying asset trades near the strike price, allowing the short-term option to expire worthless while the long-term option retains value.
The speaker suggests that in horse racing, betting on a horse to place (finish second or better) can yield higher payouts than betting on the favorite to win, due to the size of the pool. In trading, this can be analogous to identifying mispriced assets or opportunities where one can profit even if the underlying asset moves against the position, such as through options strategies.
The speaker states that CME sets the requirements for margin minimums, and all firms must adhere to these numbers. Some firms may offer lower intraday margin requirements, ranging from 25% to 50%. The speaker advises traders to contact their firm to inquire about intraday futures margins and whether their technology supports such features.
The speaker trades 24 hours a day, making adjustments and closing trades as needed. They also trade around earnings announcements and global volatility events, such as Sunday night volatility.
The speaker mentions that the next video is 'really good' and implies it will likely reach a significant number of views, though the exact number is not specified.
It signifies a shift to a more volatile, temperamental market environment, where traditional moderation is no longer expected.
Sell the 550 525 profit on that on that long put spread and be left with a regular put spread.
Yes, a sell-off is expected today due to the size of the move yesterday, and it's considered unprecedented.
Decaying daily resettling or resetting refers to the compounding effect of daily returns in leveraged ETFs, which can lead to losses even if the underlying asset remains unchanged.
The best tool is implied volatility (IVR), which measures volatility relative to the stock itself. High IV indicates higher volatility and suggests strategies like selling premium. Charts are also used to assess if a stock is at the low or high end of its range.
Trading during earnings requires directional trades, and the speaker avoids them unless there's a stock they want to own. They usually sell premium to stay engaged.
The speaker believes there is a 75 to 80% chance of yes, while the other participant believes it will be even higher, around 85 or 90%.
On a big movement day, it's prudent to roll early to adjust positions, especially if you have short delta. If you have long delta, you might wait until the next day.
The speaker sold a put spread due to the Nasdaq's upward movement and the belief that the market would not move significantly downward.
The speaker advises that making 1.5% daily gains through day trading is unrealistic for a retail trader, especially with a small account. They suggest starting with long positions and emphasize learning about risk and decision-making through trading, noting it can be a life-changing experience.
The speaker is against selling an out of the money December 2028 covered call for buying power relief, stating that it doesn't provide any relief and is not a good idea. They suggest selling a put instead.
The speaker agrees with the framing shift, suggesting that the moderation era has become the new operating environment. However, they express uncertainty about whether this is a permanent change or a temporary phase, emphasizing the need for time to determine its validity.
The high probability profit high pop strategy involves managing zero-day SPX options early in the day, within a half hour of the opening, and managing the trade within two hours of the opening. This increases the probability of profit to between 80 and 90%.
No, because the returns from equities have been so strong compared to bonds, and it's worked. However, there is a concern about whether this dependency will change, and until that happens, the course should be maintained.
No, there is no advantage to trading RSP over SPY. SPY has unmatched liquidity in the derivatives market, making it the preferred choice for trading.
I've been asked this question so many times. I'm actually going to give a slightly different answer than I've always given.
The speaker argues there's no truth to the adage, as markets are random. However, there's liquidity and potential opportunities around the open and close.
The bid-ask spreads are as tight in the middle of the day as they are earlier or late, except for the first two or three minutes and the last two or three minutes of the trading day when they can get a little funky. The rest of the day is fully electronic with consistent spreads.
The speaker suggests that it's a 50/50 shot, and the trade could be left on, rolled up and out, or covered depending on the trader's strategy.
The speaker is still bullish on INFQ and expects it to perform well.
A bodega is a small store that offers a variety of food items and services, often including hot bars and a wide range of products. A deli, on the other hand, is typically more focused on prepared foods like sandwiches and is often associated with specific cuisines. The speaker notes that bodegas are more versatile and are a staple in New York City.
Social media platforms like Instagram and TikTok have made Katz's Deli more tourist-oriented, leading to longer lines and a shift in the dining experience. This has altered the original character of the establishment.
Social media plays a significant role in trading and investing, as it influences market sentiment and can provide insights into market trends. However, it can also lead to impulsive decisions, as seen in the discussion about social media's impact on eating and restaurant selection.
The speaker states that social media plays a big role in their trading and investing, influencing their strategies and decisions. They mention platforms like YouTube, TikTok, and Instagram as sources of information and content that affect their approach to the market.
The speaker believes that the shift from factual to opinion-based media is significant and relevant. They argue that if a form of media makes sense to an individual, it should be embraced as it is an important part of modern life. However, if it doesn't make sense, it is considered a waste of time and energy.
The startup culture can be intimidating for entry-level employees due to the lack of network, experience, and clarity on roles and expectations. However, it's not necessarily too intimidating for everyone, as it depends on individual adaptability and mindset.
A small company failure does not look bad on a resume or career profile. It is viewed as a valuable experience, especially if the individual did not take the company down. Employers often see such experiences as positive, indicating resilience and learning opportunities.
The speaker advises against reversing the direction in Netflix, suggesting that the stock is overpriced and that the recent earnings report may not justify the current price. The speaker also mentions that the market is bullish, and it's better to wait for a more favorable entry point.
Yes, stepping outside your comfort zone is encouraged for growth, but it should be done with proper preparation and resources. It is important to use available support systems to ensure a positive outcome.
The speaker advises that having an entrepreneurial mindset can be seen as a threat to management focused on chain of command. However, if an individual owns a significant amount of equity in the company or has strong relationships with customers, they may be less likely to be fired. The speaker emphasizes that it is extremely difficult for free thinkers with an entrepreneurial spirit to thrive in large companies unless they have strong support from the CEO or have significant equity.
The speaker notes that the volume is often low and the bid-ask spread is wide, which can make the strategy uncomfortable. However, the speaker suggests that the strategy is more viable on highly liquid markets like SPX, where spreads are tighter. The speaker also emphasizes the importance of trading the active month and avoiding markets with zero volume.
The speaker suggests that while these investments can be considered, they should be a small percentage of one's net worth due to their illiquidity and risk. They emphasize the importance of being cautious and not overexposing oneself to these types of investments.
The speaker outlines several rules of engagement for investing outside of one's comfort zone. These include keeping capital commitments small, believing in the concept and the people behind it, and not investing on a pitch alone. The speaker also emphasizes the importance of having faith in the person pitching the investment.
The S&P has risen 55 points, while the NASDAQ has risen 315 points. The speaker notes that the NASDAQ has moved a little since the start of the show, but the overall market is described as an 'all out race to the moon' in the NASDAQ.
The speaker suggests that hedging crypto positions may involve strategies such as short strangles in precious metals, but the effectiveness of such strategies depends on market conditions and the trader's ability to identify false rallies.
The speaker states that if someone is trading too big, they are in defensive mode and should consider selling premium if they believe the market will not continue to break down. The speaker also mentions that selling calls can be an alternative strategy, but the calls are more risky as they can be 'killed' if the market rallies.
The speaker discusses the timing of shorting Nvidia before earnings, noting that there was a significant price difference between the middle of the day and the overnight close. The speaker suggests that timing was crucial, and the speaker believes that listening to others' advice could have improved the outcome.
The speaker recommends three pairs: gold/silver, S&P 500/Nasdaq, and Bitcoin/ETH. These pairs are chosen for their liquidity and correlation. The speaker also mentions the use of micro and mini contracts for these pairs.
The speaker expresses uncertainty about the possibility of the small exchange and the two platforms coming to fruition. He mentions that he spent five years and significant resources on the small exchange but was unable to find a clearing firm. He suggests that the project was technologically advanced but faced regulatory and operational challenges.
The biggest uh-oh marketing moment that turned out to be a win was a viral campaign involving a monkey named 'Love' that was used in early marketing efforts. This campaign was considered one of the most effective and memorable, despite initial skepticism.
Traders may avoid SPX due to the size of the product, discomfort with index options, or the tighter bid-ask spreads of SPY for smaller accounts. However, SPX offers tax advantages under Section 1256, which can make it more attractive for certain traders.
Standard deviation is not the basis for everything in trading, but it is a fundamental metric used for mechanical measurements and optimization. It helps determine expected market moves and buying power, with one standard deviation representing the expected move and two standard deviations used for buying power calculations.
The speaker suggests using platforms like tasty, where you can filter by high option volume, implied volatility rank, and liquidity. These filters help identify high-probability premium selling opportunities quickly. The process is described as more straightforward than traditional methods, with the potential for AI-driven simplification in the future.
The answer suggests that engaging people in the market requires building cool technology and backing it up with content. It also mentions that firms like Robinhood and Coinbase have changed the landscape by making trading more accessible and appealing to younger generations. The answer implies that innovation and accessibility are key to engaging people in the market.
The speaker suggests that the recovery from a major sell-off depends on how far the sell-off goes. They mention that the market has vulnerabilities and that volatility could lead to significant declines. The speaker advises waiting to see what happens next before making any investment decisions.
The current market sell-off is not comparable to the one in December 1999. The 1999 sell-off was significantly worse, with the Nasdaq losing 80% of its value over two years. The current situation is described as 'child's play' in comparison.
The market is experiencing significant declines, with notable drops in silver, gold, and major tech stocks. However, the overall market is still within striking range of all-time highs, suggesting it is not in a complete freefall.
The speaker recommends staying small, avoiding chasing trades, and letting the market come to you. They emphasize the importance of liquidity and caution against overexposure.
The transcript states that Micron's stock opened up $178, and it was trading under a thousand at 2:00 yesterday. It was around $990 at the time of the meeting.
The speaker mentions that there is a question of the day regarding whether the traditional stock-heavy portfolio has become too much of a default for investors. The discussion is planned to address this, suggesting that the topic is relevant and will be explored in detail.
The answer is no, as traditional stock-heavy portfolios are generational, and younger investors may not consider bonds or alternative assets. The speaker suggests that younger investors are more inclined towards digital assets.
Yes, people are putting too much of their money into stocks, but it's considered acceptable because the 'buy the dip' strategy has worked for the last 15-16 years. The speaker argues that unless the strategy stops working, there's no reason to change it.
The optimal delta range for premium collection is between 16 and 22, as this range allows traders to collect enough premium to make the trade worthwhile.
The speaker disagrees with the theory, stating that while some stocks may be bought out or go to zero, many companies can remain viable for extended periods. The speaker notes that there are companies that have been around for over a century and continue to operate, suggesting that the theory is not universally applicable.
The speaker states that the percentage of liquid net worth allocated to active trading accounts depends on age, financial situation, and future outlook. Younger individuals with lower net worth may allocate a higher percentage (e.g., 20-30%), while older individuals with higher net worth may allocate a smaller percentage (e.g., 25%). The speaker also notes that their own allocation is a small percentage of their net worth, but their children may have a higher allocation.
The speaker is unsure of the exact date of Meta's earnings and suggests avoiding buying premium due to expensive implied volatility. They recommend alternative strategies like call spreads or broken wing butterflies.
The entry price is more important because it is under the trader's control. The exit price, while important, is not as controllable and depends on market conditions. The speaker emphasizes that traders should focus on controlling what they can, which is the entry decision.
Tom learned that patience and longevity are more important than short-term gains. He emphasized that the key to success in trading and life is the ability to persist through market fluctuations and maintain a long-term perspective.
The speaker prefers selling puts because it allows for more flexibility, such as wheeling into a long stock or short calls. However, the speaker acknowledges that buying calls can also be a viable strategy, especially for long-term investments.
A synthetic strangle is a strategy that involves selling a call spread and a put, effectively creating a position that is long the equivalent of a certain number of shares. This strategy is used when the trader is bullish on the underlying asset and aims to collect premium while limiting risk.
A one by one ratio spread involves buying one option and selling one option, while a one by two ratio spread involves buying one option and selling two options. The one by two spread is considered more favorable as it provides a higher probability of success.
People trade directionally in indices because they believe in the potential for large moves up or down, even though the market has a slow upward drift. However, the speaker suggests that strategies like strangles or iron condors are more effective for active traders who want to capitalize on market volatility rather than simply buying and holding stocks.
The speaker prefers using futures for hedging, specifically mentioning the use of micro futures for smaller accounts. They also discuss the use of ES or NQ futures for delta neutralization, and the use of specific stocks like MU for hedging when necessary. The speaker also mentions the importance of account size and the availability of micro futures.
The discussion suggests that many investors are overly focused on returns, often without understanding the associated risks. This can lead to misaligned risk-taking and a lack of awareness about market dynamics and the performance of their investments relative to the broader market.
The speaker is not providing specific figures but emphasizes that investors are only interested in returns, not the underlying strategy or risk management. The speaker also mentions that they are not focused on returns for illiquid investments but expect higher returns for listed products.
The speaker suggests that investors are overly focused on returns, which can lead to aggressive strategies with high risk. They emphasize the importance of balancing risk and opportunity cost.
The speaker suggests that MicroStrategy (MSTR) is at risk of bankruptcy due to its poor performance and single point of failure. The speaker believes the stock has lost 80% of its value and that no one has made money from it since its peak.
Real-time fact-checking is significant because it enhances transparency and accountability by immediately verifying statements made in public contexts such as speeches, congressional testimonies, and earnings calls. This innovation is presented as a transformative tool that could significantly alter the dynamics of public discourse and media consumption.
Traditional sector diversification is largely a calm market strategy that becomes less effective when you actually need it.
The trader accidentally bought an at the money call instead of selling it as part of an iron fly spread, which involved selling the guts and buying the two out of the money options.
Diversification across different products is recommended to manage risk. It's important not to be all in on a single asset or strategy, as this increases unnecessary risk. Having a mix of long equities, short premium, and other instruments can help spread risk. The key is to maintain reasonable trade sizes relative to your account size.
It's a sound market strategy if the market cooperates, but there are risks such as market movement, fees, and the use of margin. It's not guaranteed and may not be suitable for all account sizes.
The speaker suggests keeping unused capital in secure assets like treasuries or equivalents (BIL/ESG) rather than passively investing in SPY or QQQ, especially at all-time highs. They mention that while SPY and QQQ may offer higher returns, the current market conditions and risks make them less advisable at this time.
The speaker suggests that firms like Jane Street and others are moving from public to private debt to gain flexibility, speed, and access to capital. They are investing heavily in AI and computing infrastructure, which could lead to vertical integration. This shift might change how markets operate by allowing these firms to control both capital and computational tools, potentially altering market dynamics.
IVR (Implied Volatility Ratio) doesn't matter for a covered call strategy on existing stock holdings because the focus is on the direction of the stock. However, higher IVR can lead to higher premiums, which is a benefit.
The speaker suggests looking for big movers and using a percentage threshold like 2%, 3%, or 5% to identify stocks moving significantly. They also mention that pre and postmarket scans should focus on big movers, while trading day strategies involve looking at futures and intraday movements.
The best startup business advice includes taking the first step, trusting your instincts, being flexible, staying true to yourself, surrounding yourself with confident people, and squeezing every dollar of raised capital as hard as possible. It also emphasizes the importance of having a clear runway and being prepared to raise outside capital when needed.
The speaker is unsure and says 'Sure, why not?' but leans towards Apple, suggesting that no one would say yes.
The speaker paid $125,000 for a two-bedroom condo in Newberg Plaza in 1986 or 1988.
Close it quickly to secure profit
The speaker recommends a short put spread strategy with defined risk, suggesting it as a way to lean a little bit long. They also mention the importance of being selective due to low volatility and suggest keeping contracts small.
It's all coincidence unless you're looking at Cuban holidays. The speaker rules out Canadian holidays, Christmas rallies, and suggests it's a seasonality thing.
Yes, it's described as a chicken version of Portillos, with a similar business model focusing on chicken tenders.
The speaker believes there is always time to put the position on and does not think one has to be early. However, they emphasize the importance of being in before the turn when selling the market, as the velocity of the turn is fast.
The practical question is less about whether to sell everything and more about how much risk you're willing to take if you're a passive long.
The speaker sold puts at 155 when SpaceX was trading at 170, but the stock dropped significantly, leading to losses. The speaker had to roll the puts out and eventually recovered some of the losses.
The speaker avoids trading VIX naked calls, calendar spreads, and selling calls due to market conditions and strategy preferences.
Regular hours are recommended as markets are good, while global hours have wider spreads and lower liquidity. Markets like SPX, XSP, ES are better during regular hours, while crude oil, gold, and silver can be traded 24 hours with some liquidity.
I think the rotation boys will jump into Apple.
The decline of SpaceX's value indicates that the market may not price the next big thing as highly as established businesses with proven cash flow. The speaker discusses how the market's reaction to SpaceX's IPO and subsequent drop highlights this contrast.
The speaker plans to roll their SpaceX position this Friday to September and may reenter or roll again. They believe earnings won't significantly impact the stock, given the price drop from the IPO.
The speaker believes the future of active trading will involve mechanical edges based on historical data, reducing mechanical mistakes, but traders will still need to be right about market movements.
The speaker suggests keeping the trade open and rolling the shorts, but acknowledges that the trade can be closed at 25% profit. They also mention that the trade costs more money due to the back month wings.
The trader changed strategies due to the limitations of a small account size and the need for defined risk. Selling premium through spreads and iron condors allows for better risk management and profitability.
High liquidity is needed before trading, and it's uncertain if any brokerage firms are offering them yet.
The speaker has no Apple position currently and plans to do something in Apple, likely related to earnings, which are expected tomorrow.
The expected move in crude oil is under $12.
The speaker believes the Clarity Act chatter has put a lid on crypto, but it might have a slight uptick. However, the speaker does not think it's time to rotate into crypto.
Goldman Sachs suggests that mega cap IPOs could push market concentration limits further, and the speaker agrees that investors may be underestimating the structural risks associated with these large listings.
He got a bob. It needs a couple of months to grow in a little bit more.
It has to. What's good for one is good for all. You want to be the stock that overperforms in your group, but you don't want to see anybody have an IPO like what we had in SpaceX.
The speaker suggests that the trade details should be reviewed, as they don't remember the specific trade. They mention that if the cost is $280 and the stock is now trading around $185, it's a one-lot position that has declined by $95. They acknowledge it as a big move but not a bad trade.
The speaker suggests selling a small amount and waiting for a rally, but acknowledges that the market is volatile and that the trade idea involves selling puts around the earnings trade.
The market has been suffering due to uncertainty around the Federal Reserve's rate decisions and the potential impact of earnings reports that may not reflect sustainable growth.
The speaker is questioning the rationale for trading Southwest, suggesting that the company's performance might not be a reliable indicator for trading decisions.
The market is experiencing a pullback, with the S&P 500 and NASDAQ down from their all-time highs. The speaker notes that while the NASDAQ has dropped significantly, some stocks like Micron have shown strong performance, and the overall market sentiment is mixed.
The speaker discusses trading futures, options, and crypto, emphasizing the importance of understanding market outlook and using micro futures for retail traders due to their lower capital requirements and higher leverage.
60% of respondents found SpaceX under $100 attractive, while 40% did not. The speaker suggests that if the stock had been trading at $180 and dropped to $100, 100% would have been buyers, indicating a strong potential for a short-term trade.
I think I'm going to say they're closing lower from here.
The speaker's strategy involves shorting the market due to its upward movement, as well as selling call spreads in the Qs and other instruments. They also mention the possibility of shorting stocks like Netflix based on historical performance.
The speaker acknowledges that their trading approach changes during earnings season, particularly in low volatility environments. They note that low volatility makes them nervous, as it reduces the opportunities for selling options like calls and puts. In contrast, high volatility environments offer more opportunities for options trading.
The speaker states that they do not adjust their trading strategy during earnings season. They explain that most earnings reports do not significantly impact the market, and only major companies with outlier results can cause market movements. Therefore, they do not change their approach based on the earnings season.
The speaker finds compensation discussions uncomfortable because not everyone perceives what they consider fair as fair. They emphasize the importance of being fair and open to discussion but also highlight the challenges of aligning perspectives.
The speaker advises that one should ask for what they deserve, as not asking can result in missed opportunities. They emphasize the importance of being reasonable and flexible in the amount requested and the timing of the request, while avoiding drawing a line in the sand.
A worker can gain more leverage by proving their worth to the employer. This involves demonstrating that they are more valuable than others, either through performance, skills, or unique contributions. The key is to focus on one's own value rather than comparing to others.
The speaker suggests that while some people may feel they are fully compensated, it is rare for individuals to get everything they want. They emphasize that expectations should be realistic and that the process often involves multiple attempts or a long time. The speaker also notes that if someone is not getting what they want, it may be due to the company's limitations or a message that the individual should look elsewhere.
Earnings trades are less risky when volatility drops because the expected move is smaller. However, they can be more risky if there is a market shock, as the risk is not adequately priced into the options.
The speaker advises that if you would not open the position today with the current information, you should adjust or cover it. If you would open it, you should hold it but re-center the strikes around the expected move. The key is to adjust the position to be outside or at the expected move to increase the statistical chance of success.
No, it never makes sense to buy the straddle. Don't you know, I mean, if you're ever going to buy a straddle, then buy it for earnings because it is a binary play if that's really what you want. But, no, we don't flip the cards over. This isn't like, 'Hey, if I don't want to sell it, then should I buy it?' That's not the same thing. Just because I don't want to sell it does not mean I should buy it.
The probability of profit on a call spread is calculated by dividing the credit received by the width of the strikes. For example, on a $5 wide spread, collecting $2 results in a 60% probability of profit, while collecting $1 results in an 80% probability. This method is an exact science and relies on straightforward math.
The speaker suggests selling naked puts as a favorite strategy for earnings, especially in low volatility environments. They also mention using ratio spreads and strangles depending on volatility levels and market conditions.
The probability of profit in a debit call spread depends on the strike prices chosen. In-the-money call spreads have a higher probability of profit, while out-of-the-money call spreads have a lower probability. The speaker explains that buying an in-the-money call spread, such as Netflix's 106s and 109s, provides a statistically high probability of profit, whereas an out-of-the-money spread would result in a negative probability of profit.
The speaker mentions taking a trip to Sardinia for five or six days, but it's noted that this doesn't count as a week-long vacation. The speaker also mentions a trip to Croatia for a week.
The difference between the ocean and the sea is primarily one of scale and depth. The ocean is generally deeper and covers a larger area, while the sea is typically shallower and more enclosed. The discussion highlights how depth can affect the practicality and safety of activities like swimming or diving.
The speaker acknowledges the question as a fun and thought-provoking one, indicating that they have a lot to say about positive drift. However, the transcript does not provide a detailed explanation or recommendation on whether to act on it.
PDT accounts, which are pattern day traders, are not being swept up by the street. The last day for firms to enforce the PDT rule is today. Most firms will start enforcing it tomorrow, but some may continue. If a trader violates the rule and does not reset, their account will be shut down. However, they can trade again with no restrictions the next day.
The current price of Netflix is 82, down from 107 before the last earnings report, representing a 30% drop.
The expected move for the stock is $26, which is a significant move given the stock's current price of $5.
The single most important thing is to always be learning, as it is considered common sense and essential for career growth.
The single most important thing to boost your career is to treat your role like a business and make everyone around you stronger. This involves taking ownership, being proactive, and creating a positive environment for your team.
The speaker acknowledges that while a significant percentage of active traders are short the market, the majority of investors are long. The public stance is influenced by the active trading community, which is a smaller portion of the overall market.
The speaker suggests that the impact of regulatory changes on market confidence will become evident during market corrections or significant movements. They note that the current regulatory environment is considered fair, but the true test will be how the markets respond to future challenges.
The rules involve adjusting positions based on implied volatility (IVR) and time to expiration. If IVR remains high and there are more than 30 days until expiration, traders should stay in the same expiration cycle and adjust their deltas. If IVR remains high but there are less than 24 days until expiration, traders should roll into the next expiration cycle and recenter their positions. If IVR drops below 30, traders should consider closing undefined risk trades as most of the premium has likely decayed. Defined risk trades can be held longer due to their reduced dependency on implied volatility.
The best way to say no to an employer is to be honest and explain that the task is not suitable for you. It is recommended to try to find a way to say yes and get the task done, then move on. A creative example is when a woman said she was having a bad hair day and did not want to come in.
The speaker notes that 47% of dog pound participants believe the S&P 500 will close higher today, despite the index being down 36. This indicates a divergence between market sentiment and actual price movements.
The transcript suggests that Trump's actions, such as his potential departure from the country, can have a significant impact on the market. The speaker mentions that the market often reacts to such news, and the speaker believes that Trump's actions can influence market sentiment.
The speaker clarifies that options profits are generally treated as ordinary income, and there are no unfavorable tax treatments with the wash sale rules when it comes to option profits. They suggest that traders should focus on their trading strategy rather than tax implications.
Exchanges wait to ensure that the stock has stabilized and is worthy of inclusion. This is based on the idea that a stock's performance over multiple earning cycles indicates its reliability and long-term value.
The speaker suggests using limit orders based on premarket trading data. They recommend adjusting pricing based on where the stock is trading premarket and using strike prices to interpolate an estimated opening price. They also advise waiting a few minutes after the opening to allow for better price discovery.
The speaker highlights the importance of consistent position sizing, diversification across multiple underlyings, and avoiding high correlation among holdings. They emphasize the need to allocate capital across different sectors and avoid overexposure to correlated assets, which can lead to significant losses during market downturns.
The speaker believes SpaceX should be in the NASDAQ 100 index, with a 60% probability of inclusion. The answer is based on the company's growth and market performance. The speaker acknowledges that the decision is not certain and that the market may have different views.
The speaker prefers a credit spread in this case, as it is a risk-one-to-make-one trade. The trade is considered a pure 50/50 shot with a 29-tick spread, risking $450 to make $550.
The speaker suggests that bull call spreads on QQQ may pay more than SPY due to the expected move in the NASDAQ. The speaker notes that everything is priced to absolute perfection when trading indexes, and that the reason for the difference in payouts is likely due to the expected move in the NASDAQ.
The speaker believes it is a buy the rumor, sell the news situation. They expect the stock to close lower than its current price, with the potential for a short-term decline. The speaker also mentions that passive funds may have to buy the stock regardless of the price, which could drive the price higher.
The speaker loves the Chicago exchanges, specifically the CBOE and CME, for their consumer-friendly approach and support for retail investors.
The historical playbook suggests that stocks entering a new major index typically experience a pre-inclusion runup followed by a sell-the-news reversal. This pattern is observed in stocks like Nvidia, which followed this arc when added to the Dow in November 2024. The options market for such stocks is noted to have sufficient liquidity, but traders should avoid entering positions on day one or two to allow the stock to find its footing.
The speaker is bullish on CL (Crude Oil) and is short puts, indicating a belief that the price will not fall significantly. The speaker acknowledges that the market may not sharply rise but believes in the continued premium collection through short puts.
The speaker confirms that Bulgaria was not in the World Cup.
The speaker believes the red card was a bad call, comparing it to a similar play by Messi that was not called. They also mention that taking back a call after the game is strange, and that the decision to give a probationary period to the player is seen as a way to maintain goodwill for hosting the World Cup.
Greeks play a moderate role in everyday trading. The speaker emphasizes that while they are important for monitoring risk and decay, they should not be overemphasized. The focus is on selecting the right strike based on delta and monitoring delta and theta on every position. Beta-weighted delta is used to optimize for decay and risk.
Greeks play a moderate role, but the speaker emphasizes that buying power reduction (BPR) is more important for managing risk. BPR helps keep gamma, theta, and other Greeks in check, and it is used as a back-of-the-envelope method to quantify risk on a trade.
The term 'everything is perfectly priced' refers to the belief that prices in the derivatives market are fair and reflect all available information. However, the speaker acknowledges that underlying assets may be mispriced due to emotional factors, suggesting that while the derivatives market is efficient, opportunities may exist in other markets.
Accurate pricing in the market is defined by high liquidity on both sides of the market, with a significant bid and offer at close prices. This indicates that the market is efficient and that prices reflect true value.
The speaker is cautious about buying Microsoft, noting that the market is long on Microsoft due to its poor performance. They suggest buying Microsoft around $365, but with a note of caution, and are not buying into a NASDAQ rally.
The speaker mentions using Excedrin as their go-to medicine for a migraine, indicating a personal preference and method of treatment.
Riding the wall of worry refers to the market's tendency to move upward despite underlying concerns. The speaker suggests that while this phenomenon is often attributed to financial media curve-fitting, there may be some truth to it. The market's behavior can be influenced by investor sentiment and the perception of risk, even if the fundamentals are stable.
Ride the wall of worry refers to the market's tendency to react to uncertainty and fear, often leading to buying opportunities during periods of high uncertainty. The speaker argues that it is real and not merely a media construct, as the market's behavior during uncertain times can be bullish. The concept is likened to 'buy the rumor, sell the news,' where the market reacts to anticipated events rather than the actual events themselves.
The speaker mentioned being flat with bonds, indicating no active position or trade in bonds.
Learning skills outside of one's comfort zone could potentially be detrimental if the environment does not support such initiatives. However, the speaker argues that it is still beneficial for personal growth and career advancement regardless of company support.
The speaker recalls a situation where a colleague left the keys in the car door after borrowing it, and the speaker responded with a humorous critique, to which the colleague replied, 'Thank you for your feedback.' This illustrates the speaker's point about the value of feedback and the importance of expressing ideas.
The speaker acknowledges that there is no clear method to determine the valuation of a business for a strategic buyer. They mention that valuations can be significantly off, sometimes by billions of dollars, and that potential buyers often emerge unexpectedly, making it difficult to gauge the right time to accept an offer.
The speaker suggests that the best way to determine the value of a business is to talk to multiple people or entities, such as potential buyers or industry experts. They also mention that valuations can be based on multiples of revenue or EBITDA, but these are not always reliable.
The speaker states that statistically, both approaches are equally effective. However, the key is consistency in the chosen strategy. The speaker argues that fading the move can be more profitable as it involves predicting future movements, but betting on the trend is simpler and more straightforward.
Fading the move involves betting against a trend, particularly when the market reaches a price extreme or a point of capitulation. Betting on the trend, on the other hand, involves following the direction of the market. The discussion highlights that fading the move is a strategy that requires timing and the ability to identify when a trend is likely to reverse.
Lump sum investing slightly outperforms dollar cost averaging in most studies, due to the compounding effect and reduced transaction costs. However, the edge is marginal and not a significant game changer.
The speaker provides a rule of thumb for delta exposure based on notional equivalent. For $100,000, a reasonable delta range is 200 deltas per every 100,000, or 20 deltas per every 10,000. The speaker notes that going beyond this range (e.g., 800 deltas for $100,000) is their absolute maximum.
Available leverage impacts delta and liquidity but does not reduce the risk of ruin. Higher leverage increases the risk of ruin. A reasonable amount of leverage is typically 2-4 times net worth, with 10-20 times being excessive.
The speaker suggests that 14x leverage is too high for a $100,000 account, implying that lower leverage is more appropriate for risk management.
Maria, the answer is that this is called put skew, and it reflects the market's adjustment for downside risk. However, the speaker advises against using skewed strangles unless one is bearish. A one-to-one strangle is more capital efficient and has historically performed better.
The speaker explains that while call credit spreads can generate higher premiums, they are priced higher due to the market's skew. The pricing reflects the risk of upside moves, which are less likely than downside moves. Therefore, the higher premium is not necessarily a better strategy but a reflection of the market's risk perception.
The Smith maneuver is a Canadian tax strategy where mortgage interest is converted into tax-deductible investment loan interest. It involves using a re-advanceable mortgage to invest in a long-term ETF, with the goal of using tax savings to pay down the mortgage principal. It is not applicable in the United States.
The speaker mentions buying IonQ at a low price and scalping it, then selling puts to hedge the position. They are short puts in IonQ, indicating a bearish outlook on the stock.
The speaker suggests an optimal ratio of one wife plus three mistresses, arguing that higher numbers lead to excessive time and energy consumption, while lower numbers lack variety. However, the speaker also expresses personal preference for one wife and zero mistresses, acknowledging that this is a subjective matter.
The biggest mistakes are either trading too big a percentage of what you have or not doing it enough. These are often interrelated, as either lack of engagement or overexposure can lead to poor outcomes.
The sweet spot for width is approximately 30% of the width of the strikes, but for the best ROI, wider strikes are preferable. This is supported by extensive research.
The speaker states that options are the clear objective choice for capital efficiency, but there are specific scenarios where trading the underlying is preferable, such as when options are illiquid, during pre/post-market hours, or when the stock price is very low. The speaker also mentions that in certain volatile market conditions, trading the underlying may be more effective.
The speaker states that the timing of pairs trades depends on the current market conditions and the notional balance between the instruments. They mention that the ratio of MES to MNQ can vary, and in the current market, a ratio of two and a half MES to one MNQ is suggested. However, the speaker also notes that the exact timing and ratio should be determined based on the specific market situation.
Dash is a puppy who is teething and biting a lot, but he is sweet and learning new things. The speaker mentions that Dash is a nuisance but not harmful, and they are not concerned about him hurting the older dog, Bolt.
The logic is to capitalize on a potential market bounce after a significant drop. By buying call spreads with varying durations, traders can benefit from the recovery while limiting risk. The speaker suggests focusing on short and long-term options to capture different market scenarios.
The choice between strangles/iron condors and short puts/calls depends on the implied volatility regime. Strangles and iron condors are preferred when implied volatility is high, while directional trades like short puts or calls are better in low volatility environments.
The platform allows users to see all trades made by the speaker and other traders, providing transparency and learning opportunities. This includes access to historical trades and the ability to use these insights across different firms.
The most powerful 1 hour in all of sports is referred to as 'Lost Dog', which is highlighted as a significant segment in the context of the show.
The speaker acknowledges that call skew is rare and suggests it may indicate market sentiment or volatility expectations. However, the exact implications are not explicitly stated, and the speaker is posing it as a question for further consideration.
The speaker acknowledges that finding new trades is a common question and suggests that it involves understanding market mechanics and identifying opportunities. They emphasize the importance of adapting to new market conditions and exploring different instruments.
The best trade the speaker made in the last 2 weeks was buying bonds, which rallied over two points and reached above 112.
The strike price for the July 10 call on SOXS is around $640.
The speaker estimates the expected move for Marvell (MRVL) to be $36.
The speaker suggests that the negatives of AI in trading are not discussed, but implies that the focus is on the positives. The speaker questions the tone-deafness of not addressing the negatives in speeches about AI.
The speaker would include AI in a commencement speech, focusing on the benefits and opportunities it presents, particularly in the context of finance and trading. However, they acknowledge that students may not want to hear about the negative aspects of AI, such as job market challenges.
The speaker suggests that traders should be cautious about earnings due to the potential for low volatility. They recommend short-term trading (1-3 days) when volatility is high and avoiding longer-term positions when volatility is low. They also suggest going out a little longer than usual if the expected move is significant.
The speaker states that they have no idea about the amount being raised, but they speculate it could be five percent or five hundred billion.
Finding new trades involves controlling the entry price and selecting the right strategy. Different market periods require different strategies, and traders should focus on what they can control, such as entry price and strategy selection. This approach helps avoid overpaying and forces the trade, which can lead to poor outcomes.
The speaker confirms they are still short both MES and ES, but acknowledges that they have too many such positions. They also mention being short Nasdaq as well.
The speaker confirms selling Amazon, Meta, Microsoft, and Netflix to buy MU, indicating a strategic shift in portfolio allocation.
The market has been in a sideways range with premium contraction, and the speaker has been taking profits fast.
It's a double-edged sword, but I think it's a little bit of overkill for the equity market at least. I'm all for predictive markets, but I don't need the S&P 499.
The speaker suggests looking at the expected move of a stock over a specific period (30-50 days), then setting a target at 25% or 50% of that expected move. They emphasize that this should be less than the expected move and serve as a target, not a hard stop.
For defined risk positions, it's recommended to roll or close the position after 21 days as it cleans up the position tab. However, if left until 14 days or less, the difference is minimal, and there's not much urgency to adjust.
Robinhood Ventures, which invests in pre-IPO deals.
The speaker suggests moving funds to accounts with more optionality and flexibility, such as margin accounts, for greater liquidity and flexibility. They emphasize the importance of having liquid funds and avoiding long-term commitments.
If the call is in the money and the stock is above the strike, the profit is already realized. If the trader wants to keep the stock, they can do nothing and the position will expire. If they want to continue the position, they can buy back the call and sell another one.
Roll calls forward to avoid assignment risk and large tax bill.
A lot better than we handle really bad losing streaks. A lot lot better.
The speaker suggests that keeping the rental property as a diversification is a valid approach, but also acknowledges that managing real estate can be burdensome. They emphasize the importance of considering the scale of the investment and the potential challenges of managing a rental property.
The answer is no, they come back. People are being opportunistic and learn to be opportunistic, so drawdowns shouldn't scare anybody.
The speaker states that Goldman Sachs does not need to split, as the stock price is high but not at all-time highs. They also mention that stock splits are not necessary for companies if they are performing well and do not need to make their stock more approachable.
The speaker explains that selling premiums and focusing on high probability trades is a strategy to develop a culture of more wins than losses for new traders, even though it doesn't guarantee profitability.
Loss aversion is a cognitive bias where investors react more strongly to losses than to equivalent gains. It often leads to emotional decisions in trading.
Loss aversion leads to holding onto losing positions in hopes of breaking even and selling winning positions too quickly, which can result in increased risk-taking and poor trading outcomes.
The speaker suggests buying options occasionally to mix things up, but emphasizes that it should be out-of-the-money options, not deep in-the-money ones. They compare buying options to buying insurance, suggesting it's a form of protection rather than a direct investment.
No, I'm disagreeing with your whole insurance argument and I've always hated this argument when it comes to option trading because I don't consider option sellers to be like insurance.
The rational investor would choose the second option (100% chance of gaining $2,000) because the expected return on that is $3,000.
Nico started trading when he was 12 years old.
The biggest story of the last two days is the rally in Bitcoin.
Bonds can rally for various reasons, including geopolitical fears, but the 10-year yield hitting its highest in 19 months during geopolitical tensions shows the textbook may not always apply. Strategic trading involves appreciating price and making decisions based on judgment of whether the price is cheap or expensive.
Skew points out the velocity, the expected velocity of the stock's movement. It represents how the market interprets velocity of risk. Call skew indicates expected upside velocity, while put skew indicates expected downside velocity.
You can buy a single stock future or sell a single stock future and sell a call or a put against it, but not at the CME. You'd have to do that on the option exchange. So, basically, you're putting up the capital. So, even though it is technically a covered call, you're putting up the capital on two different places. So it's really expensive to trade. You're not getting any capital relief.
Buying a single stock future and selling a covered call are different strategies with different capital requirements and risk profiles. The former requires putting up capital for both positions, while the latter can be synthetically replicated by selling a put with the same strike price.
The odds are 65 to 1 according to DraftKings.
The speaker and Tomaso were market makers in the late 90s during the dotcom boom. They noticed that while individual stocks were trading heavily, indexes were not. This led to the idea of building a platform called Thinker Swim to support options trading, which eventually evolved into a product by early 2020.
The 100 puts are trading around $4.
The best trader depends on the day, with Scott being a bigger shot taker and more cerebral than others.
No, the speaker attributes success to luck rather than skill.
The advice given is to focus on controllable aspects of life, such as investment decisions and spending habits, rather than worrying about uncontrollable factors like bond market changes or geopolitical events. It's suggested to invest in digital assets and consider a second job if desired, while not being overly concerned about interest rate changes or geopolitical risks.
Vinnie was 73 when the speaker had him.
The speaker does not worry about the Fed chair's speech, stating that it's unlikely to have a significant impact on the market. They mention that the Fed chair's potential statements are limited to rate decisions and inflation control, which are already anticipated.
The speaker answers no, explaining that they do not trade AAP because of its name and the speaker's personal experience with the company.
Yes, in decades.
The speaker acknowledges that the bond market's impact on tech is a mix of factors, but believes it's less significant than previously thought.
Yes, the speaker got the hoodie from Costco.
The speaker suggests using short-term instruments like BIL or ESG, and sometimes Treasury ETFs or CDs, depending on the account type and liquidity needs.
The speaker believes that CDs offer better returns than money funds and that the interest rates for CDs are more favorable than those for S&P box spreads. They also mention that the rates for S&P box spreads are typically 25 to 50 basis points above risk-free rates, and that the market is tight with limited opportunities for high returns.
The speaker expects a muted market behavior before a Friday expiration, with a potential for slight buying late in the day due to concerns about a markup. However, they note that this particular expiration has been very flat over the last 28 years, suggesting little to no significant movement.
The ideal way to earn interest on free cash is to use a treasury ETF. Alternatives include other interest-bearing vehicles offered by different platforms, but the treasury ETF is highlighted as the best option.
Yes, there is a significant benefit to rolling to the next month with 21 DTE in a perpetual S&P put selling strategy. This allows for continued exposure to the market while maintaining a reasonable time to expiration, which can help manage risk and optimize returns.
The decision should be based on the cost of capital. If financing from the Chinese manufacturer involves debt, it would involve paying interest. If it's equity financing from US-based private investors, it would involve giving up a piece of the business. The choice depends on which option offers a better deal in terms of cost and risk.
Trading crypto options is possible through listed ETFs like IBIT, FBTC, GBTC, ETHA, and BTO. The volatility has decreased from four times the S&P to two to two and a half times the S&P. The strategies are similar to trading options on stocks or commodities, with the same approach and risk management. It's important to trade only liquid options.
Stable coins offer marginal interest rate advantages over traditional money market funds and provide 24/7 transactional access. They also serve as an introduction to the digital currency ecosystem without principal risk, making them accessible for international users who face high fees from traditional banks.
The speaker explains that Bitcoin and stable coins are inversely related. While Bitcoin is seen as an investment in technology with limited supply, stable coins are designed to maintain a stable value, often pegged to fiat currencies. The speaker suggests that stable coins are more likely to see practical adoption compared to Bitcoin.
Pairing strangles based on price alignment is advantageous. The speaker suggests pairing options like a $5 call with a $5 put rather than mismatched strikes. This approach helps minimize roll risk and maintains balance in the position. Adjustments are necessary based on the underlying's movement and the trader's strategy.
The CME is launching micro futures for Cardano (ADA), Stellar, and 100-ounce silver. They are also introducing a micro ultra TBond future and new single stock futures in summer 2026. However, the speaker doubts the Cardano and Stellar futures will be significant due to low trading volume.
For traders with limited capital, directional strategies like vertical spreads (credit or debit) are recommended over complex strategies like iron condors. These strategies allow for directional bets with lower margin requirements and reduced risk, making them more suitable for beginners or those with smaller accounts.
The speaker is asking about the favorite muscle car of the listener, implying a personal preference or nostalgia related to muscle cars.
The speaker suggests selling premium through calls or puts, with a focus on small positions due to the lack of time to adjust. The strategy emphasizes making a decision based on the expected market movement for the day, with the trader typically acting as a seller rather than a buyer.
The speaker believes that Nvidia's stock is fully priced, with all the risk concentrated on the downside. They do not expect a crash but note that the stock is vulnerable to further declines.
The speaker mentioned selling futures ahead of the earnings announcement, anticipating a negative market reaction. The trade was executed as a short position on futures, with the expectation that the earnings would lead to a decline in the stock price. The speaker noted that the trade was not successful, indicating that the market reaction did not align with the initial thesis.
The donut shop in Chicago is called Downstate Donuts, which replicates the concept of Holy Donuts from Maine.
The speaker acknowledges that overnight trading sessions can be significant, as they discussed the unusually large overnight move in the markets. They note that such sessions can create unique trading opportunities due to the volatility observed.
The market is experiencing high volatility, with the Nasdaq showing sharp price declines and reversals. The VIX and futures are also showing significant movements, indicating heightened uncertainty and risk.
Trading does not get old or stale because each day presents unique market movements and opportunities. The speaker emphasizes that the markets are unpredictable and exciting, with daily variations that keep the experience fresh.
The main challenge is that individuals feel excluded from decision-making processes and lack transparency, leading to discouragement and a sense of being undervalued.
The speaker mentions that a leader who is a 'cancer' in the clubhouse is the opposite of the concept described, where the leader's speed equals the speed of the group. This implies that a leader who is ineffective or harmful to the organization can have a detrimental impact on the entire company.
The speaker guesses that Apple's stock is trading around 270 and suggests that the expected move is not explicitly stated, but the timing of the earnings is noted as being around 3:20 or 3:30 Central time.
The most important mechanic to successful trading that is often overlooked is trade size. The speaker emphasizes that maintaining control over trade size is essential for risk management and overall trading performance.
The main takeaway is that maintaining a consistent trade size is crucial for successful trading. It helps manage risk and ensures that no single trade has disproportionate impact on the overall portfolio.
The speaker is considering trading Apple's earnings but is not certain. They mention leaning towards selling puts but are cautious due to the high VIX and the need to avoid market shocks.
The speaker stresses that using liquid underlyings is crucial to avoid being 'painted into a corner' where there's no optionality, no way to hedge, and no way to adjust. Illiquid assets, such as real estate, are mentioned as non-traditional and risky, and traders should be aware of the risks involved. The speaker also notes that platforms like Lost Dog focus only on liquid underlyings to ensure traders can execute their strategies effectively.
The speaker explains that while the spot price for CBO options may not be visible during after-hours, traders can use SPY or ES futures as proxies to gauge market direction. These instruments are liquid and provide a reliable indication of market movement.
The speaker guesses the gas price to be around $5.70 to $6.16 per gallon, with a mention of Costco prices being lower at $5.90.
The speaker acknowledges that the S&P 500's drop is somewhat surprising, as it was up the previous night.
30-year bonds are trading for 10913.
The speaker suggests that if someone is getting lucky in a good market, they are effectively getting better. They emphasize evaluating progress through P&L (Profit and Loss) as the primary metric.
The speaker suggests that when everything else is working and one thing isn't, it's time to put the trade on the back burner.
Futures options are more capital efficient on entry compared to equity options, but the capital efficiency can vary depending on the specific contract and market conditions. Futures options typically require less capital due to dynamic margin requirements, but the efficiency may not hold throughout the entire trade lifecycle.
The speaker is short the 90 strike on SpaceX.
The speaker believes the answer is likely yes, as there's no reason for it to take six months to release another version.
The market is soft, with the S&P down 78, NASDAQ down $440, gold down $106, oil up $4.73, and the 10-year yield at 4.7.
Buy the 125 call and sell two of the September 145s.
Sell puts at 10, 105 volatility, 110 volatility
The short strangle has fewer contracts and a higher probability of profit, while the iron condor has more contracts and a lower probability of profit.
The speaker does not think Kevin Worsh is overly concerned about inflation. They believe his primary concern should be inflation, as it is the Fed's main responsibility.
Corporate bonds are more volatile than treasuries, with a typical 25% faster move in response to market changes. This increased volatility makes corporate bonds riskier, especially in rising interest rate environments.
The speaker prefers to stay mechanical with 40-day expirations and avoids laddering out contracts, as it complicates management. They mention using monthly expirations for consistency and simplicity.
Salana is around 76. It was like 76 and change. And it really it got into the 60s and it's been the strongest cryptocurrency.
Google is not on sale at its current price of $319. It would need to drop to $250 or lower to be considered on sale.
Defined risk trades should allocate 25 to 40% of capital, with per trade allocations ranging from 0.3% to 1.5% of available buying power. Undefined risk trades can use 3% to 10% of available buying power, with 3 to 7% being a common range. The allocation is not equal one-to-one due to differences in risk and potential gains.
The collar strategy is synthetically a long vertical call, and it can be used with a specific underlying asset like GM. The cost of implementing a collar can vary depending on the delta and time to expiration.
The video will be dropped right after the show at 10 a.m. Central time.
The speaker acknowledges that the concentration is significant and raises concerns about whether buying the index still qualifies as diversification. They suggest that if an investor is concerned about the concentration, they might consider alternatives to the index.
The speaker argues that the current concentration of the S&P 500, with nearly 40% of its value held by just 10 companies, undermines its role as a diversification tool. While this concentration has historically driven wealth creation, the speaker warns that it may eventually lead to significant risks during market downturns. The speaker suggests that the current system has worked well in a bull market, but it may not hold during a bear market, where the lack of diversification could lead to greater volatility and potential losses.
The key is to recognize when the strategy is working too well. If your stocks are getting called away frequently, it's a sign that you should consider adjusting your strategy. Close the trade and take profits, then sell an out-of-the-money put to reduce capital requirements and maintain some long delta. This improves the probability of profit from around 60-65% to 80%, while still keeping a small long delta and short premium.
A trader who talks about how much money they make is not a trader. A real trader is someone who can afford to live comfortably despite having losing trades.
The speaker acknowledges that there is a concern about weekend risk, but argues that it is not necessarily a reasonable concern. The speaker suggests that traders should consider the context of their trading strategies and the fact that zero DTE trading has created a culture where traders avoid considering weekend risks. The speaker also notes that traders who keep their trade size small are less affected by weekend risks.
The speaker does not see themselves trading a movie opening gross take, but acknowledges that some people might be interested in doing so. The speaker's son is mentioned as someone who might be interested in this type of trade.
The speaker confirms that SPY is considered an effective means of achieving diversified exposure to large-cap US stocks, with 67% of respondents agreeing.
The risk of early assignment is zero at the current time. The speaker explains that there is no risk of assignment now, but if the stock price drops below the strike price, the risk of assignment increases.
The risk of early assignment is zero if the stock does not reach a specific price level before expiration. The speaker explains that for a short position in options, the risk of assignment is only relevant if the stock price drops significantly below the strike price. For example, if the stock is short 130-140 calls with an expiration in July, the risk of assignment is zero unless the stock price falls below 125 by the end of July.
The expected move for Microsoft is down to 345, with a potential upside of $42.
The speaker suggests that selling an iron butterfly is a low-risk, high-reward strategy if the stock remains within the expected range. However, the speaker personally prefers selling strangles over iron butterflies due to better payout potential.
The speaker suggests that the current market situation, characterized by high liquidity and concentrated money flow into a few names, is the new normal. However, they acknowledge that this could change, and the market's ability to digest these changes is a key factor.
A small account with $10,000 could consider a Netflix credit spread into earnings. The strategy involves buying a credit spread, which allows for collecting premium. The risk is that the price may move beyond the expected range, invalidating the trade. The speaker suggests that the trade could tie up around $7,000, depending on the strike prices chosen.
Options flow does not significantly shape short-term price action, despite common belief. Market makers often take in premiums without causing major price movements, as they have broader risk profiles and other positions. Large orders may cause minor price changes, but these typically revert to the mean quickly.
The speaker mentioned that they will discuss it later, indicating that they are not providing a specific recommendation at the moment.
Buybacks are a significant money flow force supporting the market, with US companies authorizing over a trillion dollars in share repurchases through June 2026. This is the largest pace ever recorded at this point in the calendar year. The mechanism involves companies repurchasing their own stock when they believe it is overpriced, as opposed to buying other companies, which is often more expensive and less efficient. The practical implication is that buybacks can significantly influence stock prices and market dynamics.
Buybacks can create more demand for a stock, potentially supporting its price. However, the execution of buybacks is not guaranteed and depends on the company's ability to execute them over time.
The speaker mentions that they enjoy both buying and selling stocks, and they find it acceptable to use their buying power for stock trading despite its capital intensity. They also note that stock trading is commission-free and has tight markets, which are appealing aspects.
Yes, you can borrow money to trade stocks through margin accounts, which allow leverage of up to 50% overnight and 4 times intraday. However, this is not allowed for options or futures trading.
The phone lines are open Monday, Tuesday, Wednesday, and Thursday. The show is not aired on Friday.
The S&P is up 26 but struggling, while the Nasdaq is only up 100. The Nasdaq sold off about 75 handles off its high and rallied almost 200 handles after the close.
The bond put was sold at 121 and bought back at 115, resulting in a profit. The speaker acknowledges the success of the trade despite initial nervousness.
The 'they' refers to the collective actions and emotions of market participants, representing the cumulative flow of money and shared market behavior. It is not a single entity but the result of herd mentality and market forces.
It is possible to bring up Dog and AI on the screen, but there were technical issues during the demonstration. The feature is being tested and will be available for use in the future.
The technology is already here, and the AI is currently recommending trades. The AI's role is to recommend trades, which are then executed by humans. The technology is being rolled out, and the AI's recommendations are based on market data and analysis.
Career stalls are often due to risk avoidance, where individuals reject challenges out of fear of failure. The speaker also notes that the fear of success can be more significant than the fear of failure, leading to stagnation. Additionally, the fear of being penalized for incorrect actions or not receiving credit for success can deter individuals from taking risks.
The speaker suggests that it's often on the individual. They note that many people lack the discipline to stay focused and define their priorities, leading to career stagnation. This applies to both entrepreneurs and employees.
The speaker and another individual have a short position on Micron (MU) and are discussing the probability of MU trading at $600 by the end of June. The speaker notes that statistically, the probability is likely zero, but they are using the platform to explore the prediction.
The speaker predicts an 80% probability that Bitcoin will make a new high by the end of 2027, based on aggregated data from various sources. The prediction is part of a broader analysis that includes crypto exchanges, newsletters, and prediction marketplaces.
No, the management of winning and losing trades differs. Winning trades should be closed at 50% or 21 days to expiration to optimize profit and minimize risk, while losing trades should be managed with a consistent approach, avoiding arbitrary stop-loss levels.
The speaker explains that you should not close one wing of a strangle at a time. Instead, the strangle should be treated as a spread and closed as a spread. The speaker suggests waiting for 50% or other percentages like 25%, 30%, 35%, etc., but emphasizes that the trade should be managed as a spread.
The speaker explains that 'Cerebrus' refers to an IPO, and the statement suggests that no one has successfully entered the IPO. The speaker discusses the IPO's price setting and the challenges of shorting an IPO due to the lack of shares to borrow.
The speaker suggests that the VIX is not decreasing because there is no selling of volatility, indicating a lack of market participants willing to take on the risk of volatility. This divergence between market performance and volatility expectations may signal underlying uncertainty or anticipation of future volatility.
Yes, AMD was up by 10 or 15 dollars before it dropped.
The market crash was attributed to a single individual's actions, possibly a trade or order, which triggered a cascade of events leading to system-wide disruptions. The speaker mentions that the crash was caused by a 'kid in his mom's basement in London,' suggesting a potential market manipulation or a large trade that disrupted the market.
The speaker acknowledges the possibility of bonds crashing, citing the potential for a sharp rally in the US dollar or a change in Fed policy as key factors. The speaker also notes that the current yield levels are the highest in 19 years, indicating a potential for continued volatility. However, the speaker emphasizes that while anything is possible, the market is currently long, and the speaker is hedging against a short position.
Actively trading and investing can help your career path outside of finance, provided it is managed responsibly. The speaker suggests that it can provide a skill set advantage but warns against overexposure and potential distractions. The key is to maintain control and ensure it does not negatively impact personal life.
The speaker confirms that they do not need to be approved for futures to see quotes at that firm, but they were eventually approved for futures.
The speaker and others in the conversation are asked if they have a fear of success. The speaker responds that they do not, and others also express that they do not have such a fear.
The fear of success is the anxiety associated with achieving success, which brings increased responsibility, new expectations, and pressure. It is often linked to imposter syndrome, where individuals doubt their achievements and feel they do not deserve their success.
The speaker explains that people buy stocks during sell-offs because they believe the market will recover and continue to rise. This is often seen as 'free money' due to the potential for future gains.
The speaker suggests a 30-30-40 allocation, with 30% in trading, 30% in long-term assets, and 40% in cash and treasury equivalents. This allocation is influenced by the current state of interest rates, with higher rates leading to a greater emphasis on cash. The speaker also advocates for selective market timing and the use of capital-efficient instruments like options, futures, and futures options, while adjusting notional sizes based on buying power and risk management.
The value of the Thurman Munson rookie card is estimated to be between $20 and $100, with the speaker stating they are not selling it regardless of its value.
The speaker recommends diversifying by product and strategy, avoiding over-hedging, and reducing basis. These methods can reduce risk by about 30% and further by adjusting strategies. The speaker also emphasizes the importance of non-correlated assets such as bonds, stocks, gold, and crude oil.
The speaker is suggesting that the market is currently in a state of uncertainty, and that the Vix is a good indicator of market sentiment. The speaker is also suggesting that the market is currently in a state of consolidation, and that the Vix is a good indicator of market sentiment.
The speaker mentions that hockey accounts for roughly 4 to 6% of the total annual sports betting handle in the United States, but expresses doubt about the accuracy of this figure.
The transcript mentions that during tax time and April expiration, there are specific considerations to be aware of, such as the potential for increased market volatility and the need to manage tax-related financial obligations. The speaker also discusses the importance of being prepared for these periods, including the impact of procrastination on financial penalties.
The speaker discusses the historical correlation between tax season and market performance, noting that the S&P 500 has historically been bullish during April, which is often associated with tax season. However, the speaker also notes that this correlation is not guaranteed and may vary depending on economic conditions.
The speaker states that three or four job changes within three or four years is a red flag. This is because it suggests that the individual is continuously looking for something they think they will get, which may be unrealistic. The speaker also mentions that once or twice is acceptable, but frequent job changes indicate potential issues.
Having multiple job changes in a short period can be a red flag, especially in the professional world. It may indicate a lack of loyalty or commitment. However, lateral moves can be a positive step if they align with career goals and offer greater opportunities.
The discussion suggests that while it is important to remain open to new opportunities, it is also crucial to evaluate whether a current job aligns with one's career path and personal goals. The speaker advises that a year is a reasonable amount of time to assess a new job before deciding whether to stay or leave.
The speaker responds that work-life balance is a personal responsibility and not something that employers should dictate. They argue that individuals must figure out their own balance and that being miserable at work can affect happiness at home.
The speaker acknowledges that while fear is a natural part of market dynamics, excessive fear can lead to poor decision-making. They emphasize that traders should not let fear dictate their actions and should instead focus on the market's actual movements rather than the headlines.
Higher volatility does mean larger expected moves and higher option prices. This is because volatility reflects the expected range of price movement, and higher volatility implies a greater potential for price changes. As a result, options with higher volatility are priced higher, offering more opportunities for traders.
The speaker suggests that Bloom Energy is not a suitable stock for trading due to the untradable options and the fact that the stock has already rallied significantly. The best approach is to sell puts on a down move or buy the stock on a down move, but the options are not tradable, making it difficult to execute a strategy effectively.
Higher implied volatility does not always mean lower basis. The speaker explains that when volatility is high, it often indicates a lower stock price, which can result in a lower basis for a purchase. However, in certain markets like commodities, higher volatility can occur when prices are rising, which is the opposite of the stock market pattern. The speaker also notes that the basis is influenced by the timing of the purchase, with buying at a higher volatility period resulting in a higher basis.
Level two data and order flow do not provide significant insight into volatility direction from the speaker's perspective. They primarily show bid and ask depths, which may indicate potential price movements but not volatility itself. The speaker suggests that level two data is not a valuable tool for retail traders and that other sources may be more effective.
Shorting the market in an IRA account can be achieved through strategies such as selling call spreads, buying put spreads, or trading futures. These methods allow investors to take a short position without the need to own the underlying stock. However, it is important to ensure that the brokerage platform allows these actions and that the investor has proper approval for such trades.
The speaker acknowledges that many people look at gaps, including large ones, and that they can be filled at some point. However, the speaker states that it's not their thing, but they recognize that it's a common strategy among traders.
The speaker acknowledges that the market is up today, suggesting that being a contrarian might have been a good strategy. However, they also note that their previous prediction was incorrect, indicating that market direction can be unpredictable.
The speaker mentions that they will post all trades when the new software is launched, but they do not own their own brokerage firm. They are working on partnerships and deals.
The stock market is described as a game of tag where large-cap stocks are being bought and sold daily, with no clear pattern to predict which stocks will be bought or sold. The transcript suggests that this rotation is challenging to trade effectively.
The speaker and their counterpart do not follow inflation, SpaceX, or Iran to make market decisions. Instead, they focus on individual names and strategies, indicating a more direct approach to market analysis.
Transitioning to full-time trading requires a mix of long-term and short-term strategies, diversification, and a commitment to the strategy. It's important to understand what is needed to make a living and base capital usage around that. It's a skill that requires personal discipline and not something that can be learned from others directly.
The speaker suggests that traders should be nimble and avoid long-term positions in this environment, focusing instead on short-term strategies like a 30-40-50 day approach. The key is to take profits in a day or two if a move is made, and to buy when stocks are lower.
The expected move for the SPX trade is $330, which is the EM (expected move) mentioned in the transcript.
The term diagonal was invented by Nikki Batista, according to the speaker. However, the speaker clarifies that they and TP are the ones who popularized the term, and they do not give TP credit for inventing it.
The speaker explicitly states that the comment does not apply to the person asking the question, indicating that the praise was specific to the previous speaker.
The speaker suggests that buying the dip is not advisable as the market has already rallied almost 100 points off its lows. They believe the market is in a choppy phase with a narrow range and expect rallies to be met with selling.
The speaker argues that taxpayers should not underwrite the costs and tax benefits of AI companies, as they are effectively using taxpayer-funded infrastructure without contributing. They suggest implementing a tax on energy consumption to offset rising energy costs for consumers and to level the playing field.
The speaker mentions that a poll was conducted, and 57% of respondents said no. The speaker also notes that the CEOs of AI companies support the idea of consumption taxes, but there has been no legislation.
The speaker and their colleague focus on monitoring volatility, large-cap stock tape action, and futures markets (index, bond, gold, and crude oil) rather than news or economic indicators. They emphasize that news is not a priority in their strategy.
The speaker looks for large volume moves, price extremes, and high IVR levels. They focus on markets with significant activity and noise, which they believe indicate potential for profitable trades.
The speaker acknowledges that there is a wide range of opinions on the valuation of SpaceX, with estimates ranging from under a trillion to three trillion dollars. The speaker suggests that the valuation should be considered in the context of Elon Musk's broader vision and potential integration with Tesla.
The speaker confirms they will attend the party and mentions the need to send a text message with 'Saznos for two' as the RSVP. They also discuss the logistics of sending a check and the number of attendees.
The speaker believes there is a rotation in favor of certain stocks, such as AMD and Nvidia, while others like Meta and Amazon are underperforming. This suggests a shift in investor sentiment towards specific tech stocks.
The speaker suggests selling a covered call at the money if the trader is bullish and wants to keep the stock. If the trader is less bullish but still wants to hold the stock, selling a covered call out of the money is recommended. The reasoning is that at-the-money calls provide more premium, while out-of-the-money calls offer more room for the stock to move upward.
The expected move for Amazon over 52 days is approximately 10%, or about $26.
The speaker states that there is not much of a difference between the two, and they are being merged under the Nostradogus brand. Both tools are intended to help users build portfolios and answer questions, with the goal of consolidating functionality into one platform.
The speaker notes that despite the dollar strengthening, gold has reached all-time highs in 2025, challenging the usual inverse relationship between the dollar and gold. This suggests that factors beyond traditional economic indicators are influencing commodity prices, such as geopolitical tensions, inflation expectations, or shifts in monetary policy.
The speaker suggests that the current market environment is different from the past, and traditional relationships between assets and macroeconomic indicators may not hold. They emphasize the need to adapt to new market conditions and not rely on historical norms.
The speaker attributes the big moves in gold, silver, and crude oil to retail participation, particularly in silver futures during the January 2026 run. The surge in retail interest is highlighted as a key factor, with micro silver contracts on the CME reaching record volumes. The speaker also notes that these moves are often driven by the 'hot item of the day, week, or month' and advises caution when entering such trades.
The speaker argues that commodities, particularly gold, do not serve as safe havens. Gold's rapid price increases and subsequent corrections suggest it is more of a speculative trade than a safe haven. The speaker also questions the practicality of using gold as a medium for bartering in times of economic collapse.
The current price of gold is $4,600.
The speaker does not believe the market is primarily driven by news, despite the emotional reactions to it. They argue that even with significant news events, the market can continue to move upward, indicating that news may not be the primary factor influencing market behavior.
The speaker acknowledges that selling puts in Microsoft and Oracle is a strategy that can capture a portion of the premium, but the effectiveness depends on market conditions. The speaker suggests that the trade should be flexible and adjusted based on market movements, rather than being a binary outcome.
The speaker suggests selling puts or put spreads as suitable strategies for playing earnings, leaning bullish or omnishirectional. This approach is suitable when volatility is cheap, and the stock feels like it's trading cheap, even if it's not technically cheap.
The speaker suggests trading earnings-related stocks by selling puts on low volatility stocks that are considered rich. They also mention using short-term strangles and vertical spreads as strategies, depending on the market conditions and the stock's performance. The speaker emphasizes the importance of market conditions and the stock's participation in the market.
The speaker is uncertain about whether the S&P is seeing its highs, suggesting that the market may be done for the day and that volatility should be monitored. The speaker also mentions that the S&P is up 37 and that the market may be approaching a key level.
The speaker responds that they have called every top, and the other trader's claims are not unique. They emphasize that all traders call every move, and the market is inherently subjective. The speaker also notes that the other trader's claims are not necessarily accurate, as they may have called many tops that did not actually occur.
The speaker is uncertain about when the market will stop caring about AI, suggesting that it may change when the market rotates to other sectors or technologies, such as quantum computing or software stocks.
The speaker explains that the yen is on its multi-year low, and there is a potential for significant upward movement due to central bank actions, particularly from the Bank of Japan. The speaker also mentions that the puts are priced in such a way that the yen doesn't move much, making it a good opportunity for short puts.
Yes, the market has become a narrative space due to social media and rapid news consumption. While the underlying supply and demand dynamics remain unchanged, the stories and narratives around markets have shifted, influencing market behavior and trader psychology.
The discussion suggests that success in trading involves both inherent traits and developed skills. While some individuals may possess natural abilities, these traits are not immediately visible and often only become apparent through experience and practice. The analogy to other fields like sports and business highlights that exceptional performance often requires both natural ability and the right environment to thrive.
Keeping track of profits on a card is a method to maintain awareness of one's trading position and performance. It helps traders stay disciplined and make informed decisions based on their current status in the market.
The expected move for the stock was initially thought to be around $12, but it fluctuated, ending at $12 again. The speaker noted that the stock did not move significantly, which affected the effectiveness of the premium selling strategy.
The S&P is down 17, and the Nasdaq is down 118. The speaker notes that these are significant declines, but the market has been volatile, with the S&P fluctuating between being up and down throughout the day.
The speaker believes that volatility is likely to remain stable in the short term, with a potential contraction if the market continues to rally. However, there is a risk of a volatility spike if unexpected events cause a market pullback.
The speaker mentions having no public quantum exposure other than a private investment in a quantum startup. The speaker also mentions holding INFQ, a quantum stock, and notes that it has increased significantly.
Uber's price range has been between 105 and 68.50, with the stock currently trading around 73-74.
The speaker states that Netflix was untradable before the split, but now it is a decent trading vehicle due to increased liquidity and narrower bid-ask spreads. The applicable conditions include a market environment with increased liquidity and narrower spreads, and the practical implication is that it allows for more efficient trading.
No, shorting a stock on its first trading day is generally not possible for retail traders due to the lack of available shares to borrow. Clearing firms may attempt to locate shares, but this is not guaranteed. Retail platforms like Schwab, Fidelity, and Interactive Brokers do not permit shorting on the first day, although proprietary accounts might allow it.
The speaker identifies several career killers: inability to accept responsibility, over-promising and under-delivering, burning bridges, toxic office politics, and indecision loops. These behaviors are presented as recurring patterns that can lead to professional downfall.
A sell-off between 4:00 and 5:00 Eastern time is part of the same trading day and affects the closing price, which is used to determine the next day's trading context. After-hours moves, starting at 6:00 Eastern time, are considered part of the next trading day and thus have less immediate impact on the current day's market dynamics.
The speaker refers to his wife as 'the six' due to a golf-related joke where his friend Tom mistakenly called her a 'six' (as in a golf handicap). The wife accepted the nickname, and it became a running joke among them.
To turn the confusion from futures markets into a positive, start with micro futures and learn by doing. Experiment with futures options on less volatile instruments like 10-year notes or ES options. Reduce your position size by about a third compared to listed options to account for the additional leverage in futures. Focus on a few liquid names and avoid getting buried in a vast universe of commodities.
The ETF equivalent of a gold futures contract (GC) is 10 contracts of the ETF GLD. This equivalence helps traders understand the notional risk and contract size of futures contracts.
The speaker expects the market to be choppy with limited movement due to reduced trading activity. They also suggest that the market might behave contrary to expectations, indicating unpredictability.
The speaker discusses the alignment of CEO incentives with long-term shareholder interests versus the potential for executives to prioritize aggressive spending regardless of near-term returns. They suggest that while stock price is the primary metric, the effectiveness of this approach depends on the company and the specific targets set. They also express concerns about CEO overpayment and the lack of significant differences in performance between CEOs across companies.
No, the speaker does not like jade lizards after the move happens. They prefer high volatility.
The decision to use shorter or longer-dated options for earnings trades is based on the timing of the trade relative to earnings. Post-earnings trades typically use longer-dated options to avoid holding positions during volatile periods.
Look for symbols with good liquidity on the platform you're trading. There are multiple products with great liquidity, and you can use liquidity meters to identify them. Avoid products with bad liquidity.
Balance account growth with proper position sizing based on opportunities, not forcing trades. Wins are more important than collecting premium, and you should adjust based on market conditions and opportunities.
If the VIX is below its historical mean (17-19 range), widen the strikes and go out longer dated. If it's above that, you can afford to get a little bit richer.
They don't have Fridays.
The expected move for AMD is $40.
The speaker suggests that the VIX hasn't moved significantly, indicating that the volatility is relatively low.
When using portfolio margin, the sizing should be based on the same principles as span margin for futures and options. Typically, it's 30% to 35% less buying power compared to a regular margin account. For example, if you use $1,000 in a regular margin account, you would use $650 in a portfolio margin account.
No, the speaker doesn't worry about dark pools. They believe that for retail investors trading small quantities, the order flow is handled efficiently by off-exchange trading, and dark pools are not a concern.
The speaker suggests that box spreads are an intelligent trade, collecting a couple of points, but questions the return on SPX boxes, noting that the return is 36, which is lower than the 475 on a CD. The speaker also implies that the trade was likely made two months ago.
The speaker suggests that the trade size should be proportional to the account size, and that a trade that is too large for the account size can be risky. They also suggest that a portion of the account should be kept in dry powder for opportunities.
Sizing small and being consistent with trading strategies can help manage the psychology of losing trades.
Theta decay is not consistent and does not have to happen every day. Volatility can affect theta decay, and it can even expand against the trader if the stock doesn't move. The speaker suggests that the idea of theta decay being constant is an oversimplification, especially by charlatans on the internet.
The speaker reassures that they are fine and not worried about position glitching.
The speaker suggests that this belief might be a self-fulfilling prophecy, as traders' actions based on this belief could influence market behavior. However, it's noted that this is speculative and not definitively proven.
There is no statistical evidence to suggest that post earnings directional trends are meaningful or tradable. Post earnings trades should focus on strategies like premium selling if IVR remains high, reenter expected move strangles closest to 45 days, and avoid post earnings iron condors if IV has come down. The highest pop trade after earnings is a ratio spread to fade the direction the earnings went.
The speaker believes the merger is inevitable in the long term but not currently relevant. They are bullish on SpaceX but have been wrong on direction.
The speaker discusses the importance of understanding market dynamics and making quick, informed decisions during extreme volatility. They also mention the need to monitor market conditions and adjust strategies accordingly.
The speaker suggests trading the oil market using either the CL or MCL contracts, with a preference for CL due to its liquidity. They recommend avoiding ETFs and stocks that track oil, as they are less efficient. The speaker also mentions that they are a seller of rallies and a contrarian, suggesting that traders should consider the market's volatility and liquidity when making decisions.
AI algorithms will alter the way people do research, learn, structure trades, monitor risk, build portfolios, and overall make trading more efficient and disciplined. However, the impact on zero DTE options trades is not explicitly discussed.
Quantum computing is believed to have the potential to solve complex math problems that traditional computing methods cannot, due to its ability to process information in fundamentally different ways. However, the speaker acknowledges that this is a hypothesis and the actual capabilities of quantum computing in this regard are still under exploration.
The speaker mentions creating a simple spreadsheet to analyze options, which led to profitable trades and sparked their interest in trading. This mistake, though initially seen as naive, was a pivotal moment that led them down a path of success.
The wheel strategy is used to gain experience and take advantage of undervalued stocks. Even with increased volatility, the strategy can be effective if the trader is willing to manage the risks associated with short puts and calls.
An iron condor becomes a synthetic strangle when the strikes are wide enough that the trade is primarily for outlier protection and capital efficiency. The speaker suggests that if the strikes are more than 15 or 20 points apart, it is considered a synthetic strangle from the start. The exact point is subjective, but the speaker notes that a 25 delta trade is typically a synthetic strangle.
Eduardo responds that Tom and Scott were bearish on gold and silver during a previous period when silver had a significant run. However, he clarifies that their current positions are short premium on gold and silver, which are working well. He also notes that the positions are not specifically related to gold and silver but are part of a broader market strategy. Eduardo acknowledges that the market could move against their positions, but he believes the current strategy is profitable.
The speaker states that buying VVIX shares is not cash efficient and that VVIX is not a tradable instrument. They suggest alternatives such as selling premium in major indices like SPY, which have an inverse correlation with volatility. The speaker also advises against paying record prices for volatility, emphasizing that such strategies have rarely worked out historically.
The speaker states that oil is currently around 100, with 80 being 38% and 120 being 62%. They believe the real risk is to the downside, with a potential move into the mid to low 70s by April expiration. The speaker also mentions that the market's sentiment is heavily influenced by emotions and that the biggest risk trade is that everyone is long oil.
The best time to take profits from a strangles trade is when the trader feels it is a good number, rather than waiting for specific expiration dates or volatility levels. The trader should consider rolling the position if volatility remains high, but should not overthink the trade and should move on to the next trade if a profit is achieved.
If the market remains within a range, letting the straddle expire is a viable option. However, if the market moves significantly, rolling the position to a higher strike (e.g., 100) can help hedge against assignment and profit from time decay.
The market has experienced a rally, with some stocks showing significant movements. The VIX cash index has declined, indicating that the market is not in a crash mode. However, there is still volatility, and traders should be cautious.
The trading show is scheduled from Monday to Thursday of the week, from 9:00 to 10:00 Central Time.
Yes, the wheel strategy can be applied to futures options. The strategy involves selling a put and then selling calls against the underlying asset if the put is exercised. This can be done on any liquid market, including futures, as options are priced similarly across different markets.
Small dealers are unlikely to buy physical silver at market prices due to the inability to hedge large positions and the volatility of the market. They may offer prices significantly below market value, making it unattractive for sellers.
The speaker mentions that SLV was trading around 106ish, with a peak of 10983. This indicates the price was fluctuating around the 106-109 range.
The speaker suggests that gold (GC) and crude oil are the most consistent commodities to trade due to their liquidity and stable price behavior. These commodities are preferred over others like silver or live cattle, which are more volatile and less liquid.
The speaker and Scott disagree on the question, with the speaker arguing that it would be a form of government overreach and a bad policy, while Scott believes it could be a beneficial form of forced savings for many people.
Prediction markets are seen as useful for understanding market sentiment and probabilities in various domains like sports, politics, and markets. While the speaker does not participate in them, they acknowledge the value of observing market predictions and the accuracy of information provided by these markets, even though they are not perfect.
Prediction markets have significantly higher transaction costs compared to traditional markets like Apple. For example, trading $100,000 in Apple incurs only $8 in bid-ask spread, while prediction markets may charge $1,600 to $2,000 in fees.
The speaker explains that while there are options on futures (which are derivatives), there are no options on options themselves. This is due to the complexity of the settlement process and the lack of interest from exchanges to develop such products.
No, the software cannot model the worth of an influencer because there is no consistent data available to determine their value. The ability to monetize varies greatly depending on factors such as the type of content, audience engagement, and the specific niche.
The speaker suggests that while some stocks like Microsoft may appear cheap, they caution against classifying current declines as selloffs. They recommend waiting for a minimum 5% drop before considering buying opportunities. For stocks like Micron, they acknowledge a slight decline but do not classify it as a selloff.
The speaker believes vocational schools should be reintroduced, particularly for subjects like wood shop, machine shop, and auto shop. However, they acknowledge the challenges of changing curricula due to high costs and the need for practical skills in a rapidly evolving technological landscape.
The speaker explains that it is not typical to exercise an out-of-the-money call early for dividend purposes. The email was a general alert to all holders of options on Clorox with an upcoming dividend, regardless of whether the options were in or out of the money. The speaker clarifies that early exercise of out-of-the-money options is not a common practice, and the email was sent as a precautionary measure.
The dividend for CLX is $1.24.
The probability of a government shutdown is estimated at 65% according to prediction markets, though the speaker expresses skepticism about its significance in the current context.
The 'buy the rumor, sell the news' strategy involves buying assets based on anticipated news and selling them once the news is officially released. The transcript mentions that this strategy has become a crowded call, indicating that many traders are using it, which can lead to increased market volatility and potential risks.
The speaker suggests that the orderly absorption of the SpaceX IPO may influence the market's reaction to future IPOs like OpenAI. However, the speaker advises caution and does not provide a specific recommendation.
The SpaceX IPO's orderly performance suggests that new IPOs might be higher or more popular, but the transcript does not provide a definitive answer. The speaker speculates that new IPOs could be popular, but the discussion is more about market behavior than specific trading strategies.
The speaker mentions that price, insanity, irrationality, and stupidity are factors that can make one bearish. They also suggest that buying at current prices is not advisable, but selling is not recommended.
When a stock is added to an index, ETFs and index funds must rebalance their portfolios by buying the new stock and selling others. This process is significant for large stocks like SpaceX, which could trigger substantial rebalancing due to its market capitalization. The rebalancing forces passive funds to purchase shares, even if individual investors might not want to buy at current levels.
The systemic risks include the potential for artificial demand due to index fund rebalancing, which could create short-term price pops. However, the speaker argues that this demand is not unique to SpaceX and is a standard part of market dynamics when new stocks enter an index. The long-term impact depends on the stock's fundamentals and broader market conditions.
The speaker acknowledges the high valuation of SpaceX and the potential for a selloff if the stock trades below its IPO price. They also mention the risk of the valuation being unrealistic compared to other companies, such as Amazon and Uber, which had similar valuations at their peaks. The speaker believes the risk is significant but does not have a position in the stock.
The speaker states that they would not have liked to sell the company and keep control, as they prefer their current life and do not know what to do with themselves as a trillionaire. They also mention that it takes a different kind of person to be a trillionaire and that it has never been done before.
The speaker states that it's not even a debate and that you can't be with a brokerage platform that has limitations, whether they're futures. The speaker recommends moving to a more modern platform.
The speaker advises waiting until options are available and for the market to settle before engaging in strategic trades. They recommend using defined risk spreads instead of single options to mitigate volatility risk. The speaker also emphasizes the importance of waiting for the market to stabilize and for volatility to settle before making any strategic trades.
The speaker believes that the option markets will improve over time, as more people become aware of and open to trading new stocks like SpaceX compared to Meta. They also mention that the most liquid stocks for options over the last five years have been Nvidia and Tesla, and they consider SpaceX as the next generation of Tesla.
The transcript suggests that traders should consider buying directionally rather than selling volatility directly when trading spreads. The speaker emphasizes that the choice between buying and selling volatility depends on the trader's comfort level and the specific market conditions, such as volatility levels and skew.
The speaker states that today is the 15th.
The stock market is unchanged, with the S&P 500 literally unchanged and the Nasdaq down 40 after being up 500 on Friday.
The speaker discusses the idea that selling option premium before the weekend may offer an edge due to the lack of market activity over the weekend. However, the speaker also notes that the market can be unpredictable, and the effectiveness of such a strategy depends on various factors, including market conditions and the trader's ability to anticipate movements.
Selling option premium before the weekend does not offer a reliable edge. The outcome is random and influenced by market gaps, which are unpredictable. While it may seem like a strategy, it is not guaranteed to yield consistent results.
The takeaway is that learning from the best available people in your environment, even if they are not in your immediate field, can be highly effective. This is illustrated by the example of an emergency room where residents and medical students learn from experienced attendings, emphasizing the value of hands-on learning and mentorship.
Upskilling refers to the process of acquiring new skills or enhancing existing ones to improve professional capabilities. It is a form of targeted training and education aimed at overcoming skill gaps and staying competitive in the job market.
Arthur was interested in learning linear algebra, and he found a free course on MIT's website. He found the first two classes to be excellent, indicating a genuine interest in the subject.
The speaker and the other participant discuss the concept of financial satisfaction and the importance of the journey over the destination. They suggest that the idea of a specific monetary goal is less important than the process of growth and experience. The speaker mentions that while a million dollars was a goal in their early 20s, the focus shifted to the experience and growth rather than the final number.
Options traders should consider the type of trade (defined vs. undefined risk) when managing positions in low volatility environments. Defined risk trades like iron condors allow for more flexibility, while undefined risk trades should be closely monitored and closed within a 21-day timeframe to avoid reaching maximum loss.
The speaker owns a Lucid sedan and loves it, stating that it is virtually the same as the Tesla Model S he previously owned. He also mentions that his wife owns a Lucid Gravity SUV and loves it.
An unlucky investor is someone who consistently loses money across multiple investments or strategies. It refers to a pattern of losses rather than isolated losses.
Most people are not lucky investors because they are one-trick ponies, sticking to the same strategies and following others without experimenting with different products and strategies.
The speaker believes that investors should not follow others and should make their own decisions. They argue that following others can lead to poor outcomes, as seen in the meme stock craze and scams like Bernie Madoff's.
The Nasdaq index is currently down 10% from its previous Friday gain of 500 points, indicating a significant drop and a brutal week for short sellers.
AI trading will be competitive and easily available to small retail customers, but its role as a trade engine is uncertain. The focus is on AI's value in portfolio optimization and risk management, which are more promising areas for implementation.
The Lost Dog platform is not a trading platform, and there are no immediate plans to add trading features. While the platform has many features that resemble a trading platform, its technical features are significantly different. The speaker cannot confirm any plans for adding trading features in the near future.
Futures can be suitable for scalping, but they have higher commission costs compared to options. The cost of a futures trade includes exchange fees, which are typically higher than those for options. However, on a notional basis, the cost of trading futures is comparable to other products like stocks and options. The total cost includes both the firm's commission and exchange fees, which vary by product type.
There is no single best degree, but fields in STEM (science, technology, engineering, and mathematics) such as engineering, data science, physics, and AI are highly valued. The transcript emphasizes the importance of personal interest over potential earnings and suggests exploring a wide range of classes to find one's passion.
Yes, the CME charges all brokers the same fee. The fees are standardized, and brokers do not charge different rates for the same product. Retail traders can find detailed fee breakdowns on the CME's help section under futures products.
Employee bonuses are structured based on both individual and company performance. The company sets aside a portion of its projected profits as a bonus pool, which is then distributed based on performance metrics. The company prioritizes fairness by considering both individual contributions and overall company performance, ensuring that all teams are recognized for their roles. During the financial crisis, the company maintained bonuses despite reduced profits, emphasizing the importance of retaining talent.
The speaker views the SaaS sell-off as a normal market correction after a prolonged rally. They argue that while some companies may take hits, the overall market will normalize, and prices will return to more reasonable levels. The speaker also notes that the sell-off is part of a broader market cycle and not an indication of long-term value destruction.
The expected move butterfly is a trading strategy that involves buying and selling options at different strike prices to profit from a predicted range of price movement. It is typically used in short-term trading with options that have a short time to expiration (0 DTE or weekly). The strategy is based on the probability of the market moving within a specific range, with the odds of success proportional to the price paid.
The speaker suggests consulting with a professional who understands the tax and legal aspects of starting a trading business. This could include a trader accountant or a law firm that deals with traders. The speaker emphasizes the importance of speaking to someone who can help set up the business correctly to avoid mistakes.
The biggest vulnerability for AI is the potential for a more stringent regulatory environment. The speaker argues that while current AI companies have faced minimal regulatory hurdles, there is a high likelihood of regulatory changes affecting their operations. This is due to the increasing integration of AI into various sectors, which may prompt governments to implement oversight measures.
The speaker suggests that supporting AI regulation could help politicians get reelected, as constituents may perceive it as a way to address job displacement and social concerns. However, the speaker also notes that the extent and timing of regulation remain uncertain.
The speaker believes that regulations around social media for children are necessary, but they are not in favor of extensive social media regulation in general. They argue that the focus should be on protecting children from the negative impacts of social media while acknowledging the broader challenges of regulating AI.
The social contract refers to the implicit agreement among members of a society to regulate behaviors that pose risks to others. In the context of drunk driving and gun ownership, it means that while these actions may be legally permissible, they are socially discouraged due to the potential harm they can cause. The speaker notes that these contracts are established through societal consensus and are meant to protect the collective good.
The speaker believes the State of the Union address will have minimal impact on the market, as it is seen as a 'bitter fest' with Trump's complaints and no substantive content. The speaker suggests that the market will focus more on tech earnings and other market dynamics rather than the address.
The speaker does not have a position in Nvidia but has a position in MU, which is considered fine. The speaker is also long Netflix and short some puts on various strike prices.
The S&P 500 is down 24 points overnight, and the speaker mentions that they took a significant risk to break even by buying back S&P futures.
The speaker believes tokenization is not an overhyped trend but is building real infrastructure. However, the adoption rate has been slow, and the momentum has waned as digital assets cooled down.
The speaker does not adjust position size due to a Fed meeting but prefers to gravitate towards bond products like TLT and CBZN during such events. They believe in leveraging increased volatility and directional plays rather than reducing exposure.
The best way to manage an iron condor is to not touch it, as even if one side goes down, it can be rolled down or up. The speaker suggests rolling down the vertical on either side if needed, but generally, it's best to leave it untouched. This approach is based on the idea that iron condors are delta neutral and do not move much, so reducing the delta by half is a common practice.
The speaker suggests that if you're going through their checklist and don't have a directional bias, it's better to wait until after earnings. However, if you're looking to take advantage of the volatility spike before earnings, buying the back month and selling the front month can be a viable strategy. The speaker also recommends avoiding stocks with earnings before the trade.
The speaker and their team are using a prediction engine to analyze this question, indicating that they are actively exploring the potential impact of asset tokenization on the financial sector. The answer is not explicitly provided, but the process of evaluation is highlighted.
The speaker expected a rally of $2 for Coinbase, based on premarket movements and the expected price range.
Market movements can significantly affect existing trade positions, as seen with the short puts in gold and ZN that were priced out by the morning's market move. This highlights the need for traders to monitor market conditions and adjust their strategies accordingly.
The speaker believes crude oil prices have dropped and sold puts on crude oil (CL) for $1.71, indicating a bearish outlook. The speaker is short some puts and added to the position as crude oil prices dropped.
The speaker states that the total value of unchained real-world assets tokenized in the last year is $31 billion, which is triple the previous year's amount. However, this is considered minuscule compared to traditional markets, with the speaker noting that $31 billion is less than the amount traded in 30 seconds at the market open. The speaker also mentions that tokenized assets are currently a rounding error in the market landscape.
Tokenized adoption is in early stages with limited demand and practical examples. The market lacks secondary markets and faces high costs and regulatory hurdles. While there is potential for improving liquidity, the concept has not yet gained significant traction.
No, Friday is closed. The market is closed on Friday, and the 4th of July is a holiday, making it a three-day weekend.
The process involves converting stock holdings from one currency to another, such as converting FTSE 100 stocks from British pounds to US dollars. This conversion is necessary when trading across different markets, and it can be cumbersome due to the need for currency conversion and regulatory compliance.
Big real estate companies may not be doing this because they want to own the entire property, which involves significant capital and long-term commitment. They may also be constrained by legacy processes and slow decision-making, making it difficult to adapt to new investment strategies.
Yes, a real estate agent can consider lending back their commission to buyers to help them close a deal, as discussed in the conversation. This approach is framed as a goodwill gesture rather than a profit-driven strategy. However, there are potential legal and financial risks involved, and the agent should be cautious about using this as a money-making opportunity.
Solana is currently trading at $76, and the speaker notes that it has been significantly stronger than other cryptocurrencies recently.
Tokenization can make trading illiquid assets easier by enabling the creation of derivatives markets. This allows for the trading of options and futures on any tokenized asset, potentially increasing liquidity and accessibility for traders.
The speaker believes the market will be quiet the day before the three-day weekend, as it is not always the case, but they think it might be the beginning of the end for the current market trend.
The speaker believes the Senate is likely to pass legislation that either limits or shuts down prediction markets, particularly those that mimic sports betting. They argue that these markets are essentially sports gambling and should be regulated like traditional gambling, with states seeking to maintain revenue streams through standardized rules and exchange-based systems.
The speaker argues that requiring a certain number of years of experience is often a protective measure for companies, but it can be a barrier for fresh graduates who are capable and motivated. The speaker suggests that experience can sometimes hinder adaptability in the fast-paced world of finance, as it may lead to preconceived notions about how things should work.
The differences lie in their blockchain technology, focus areas, and applications. For example, Stella focuses on bridging digital and fiat currencies, working with firms like Circle and MoneyGram, and is focused on stablecoin payments. Each blockchain has unique technology and applications, requiring investors to do their own research to understand their potential for long-term investment.
The speaker mentions that one of his two kids actively participates in markets, with a focus on options trading. The other child is more interested in equities and has a bullish stance on certain stocks. The speaker emphasizes the importance of engagement and learning through experience.
The speaker recommends short strangles or iron condors in crude oil, given the high implied volatility and the market's range-bound nature. The strategy involves selling strangles at 70 and 150, capitalizing on the price range between 80 and 110.
The speaker discusses the trade-off between capital efficiency and probability in SPX iron condors. Wider spreads (e.g., 150 points) offer higher potential returns but require more capital and increase the risk of adverse price movements. Narrower spreads (e.g., 50 or 100 points) are more capital-efficient and reduce the risk of large losses, though they may offer lower returns. The speaker suggests that 50 points is sufficient for most traders, with 100 points being a maximum, and 150 points being too risky due to the capital required and the potential for significant losses.
The speaker explains that premium changes are driven by val (volatility), which is a key factor in options pricing. When val increases, premium expands, and when val decreases, premium contracts. The speaker also notes that the direction of val is influenced by market participants' expectations of future events, with market makers adjusting their bids and offers accordingly.
The speaker suggests reducing the amount of capital used by 30% when trading futures options. This approach helps manage risk by limiting the exposure and aligning with portfolio margin requirements. The speaker also recommends mixing futures options with other strategies and gradually scaling up as the trader becomes more comfortable with the additional leverage.
The stock mentioned was VCX, which provides access to investments in companies like SpaceX, OpenAI, and Anthropic. It is a venture fund that allows individual investors to participate in high-growth startups.
Individuals cannot earn commissions from users unless they are licensed. However, they can sell their tools or ideas on a licensing basis. Scanners are more likely to be marketed for a fee rather than on a commission basis.
The speaker states that as a retail customer, they cannot provide a specific answer to the question of what constitutes a high, low, or optimum gamma value per trade. They explain that gamma risk is built into the model for futures and is part of the buying power equation for listed assets, but they do not provide specific thresholds.
The speaker believes that starting a business is not about the economic cycle but about the business idea and execution. They argue that entrepreneurs should not worry about the economic cycle they are in and should focus on their business idea. The speaker shares personal experiences of starting businesses during economic downturns, such as the dot-com bubble crash and the 2008 financial crisis, and notes that these periods can present unique opportunities, such as lower costs for goods and services.
The speaker believes the current market environment is a good time for trading due to the high volatility and uncertainty, which create opportunities for both long and short positions.
The speaker mentioned spending the entire morning of the wedding in the lobby trading with others, indicating a focus on trading even during personal events.
No, investment firms cannot take your money from an IRA account. Customer assets are held in segregated funds, which are legally protected. The only exception is if you use margin, allowing the firm to rehypothecate your securities, but this is tightly regulated and does not involve direct access to your funds.
The speaker confirms that they will track individual career performance alongside investment portfolio performance. This is part of a broader effort to provide users with tools to monitor and optimize their career and investment outcomes over time.
The speaker suggests that small account sizes can be accommodated by using smaller contract sizes, such as micro futures or 1 oz gold contracts. It is important to choose a brokerage that offers these products and to ensure that the account size is suitable for the firm's requirements. The speaker also emphasizes the importance of trying different products to see what works best for the trader.
The speaker is uncertain but suggests that buying power requirements for futures are typically a percentage of price movement and can vary with price changes. The CME or clearing firm can raise requirements as they see fit. IV could lead to higher requirements, but DTE is unlikely to impact the model. The speaker notes that while MES can experience large moves, the requirements for MES are not expected to change significantly, and traders should not worry about it as it is rare.
As one becomes more successful, they tend to take more risk and have more wiggle room. They also recognize that with more capital, they can take a longer time frame and look at investments over extended periods, rather than short-term immediacy.
Options on the 10-year Treasury notes (ZN) are recommended as a starting point due to their accessibility and lower risk compared to options on the 2-year Treasury, which are reserved for professionals. The 10-year notes offer a great entry point for learning futures options trading with minimal risk.
A marketable limit order is a type of order that allows traders to specify a price at which they are willing to buy or sell an asset. It is used to avoid getting filled at a worse price than intended, especially in volatile markets. The speaker explains that it is different from a market order, which fills at the current market price, and emphasizes the importance of using limit orders to protect against adverse price movements.
Earning interest on idle cash without reducing options buying power is possible if the firm pays interest on the cash. Alternatively, traders can invest in products like T-bills, but they must avoid using the cash for margin or leveraged positions. It's important to note that using idle cash for options or stocks could involve borrowing from the firm, which may come with higher interest rates.
The speaker primarily sells naked options on futures, targeting a delta range of 16 to 25, with an ideal target of 22. This range is chosen for maximizing premium while minimizing risk of price breaches, and the mechanics are consistent across different instruments.
The speaker confirms that they have considered this strategy in the past, but notes that it is not commonly used today. They also mention that it is a high-risk strategy that requires a deep understanding of market dynamics.
The speaker suggests using SPY (SPDR S&P 500 ETF Trust) instead of SPX (S&P 500 Index) for trading, as SPY is cash-settled and easier to trade. The speaker highlights the difference between cash-settled and stock-settled options, noting that SPY avoids assignment risk and is more straightforward for traders.
The speaker suggests that while the environment may justify a more defensive approach, such as carrying a long ball or dialing back net delta, they caution against overreacting to macro narratives without market confirmation.
The VIX is presented as a reliable measure of fear and macro risk, with the long-term average around 18. The current level of 18.67 is just above the long-term average, indicating that the market is at a neutral level of fear. However, the speaker acknowledges that individual perceptions of fear may vary, and the market may not always confirm macro narratives.
The speaker describes the market as being in a 'no man's land' scenario, where prices are near all-time highs but not at extreme levels. The speaker also mentions that the market is confusing and that there is low volatility.
The market is described as being slightly heavy, with the NASDAQ showing weakness relative to previous performance. The speaker notes that the market has been volatile, with some stocks like MU showing weakness overnight.
The speaker poses this question as part of a discussion on market strategies, suggesting that buying the dip may no longer be a disciplined strategy due to its long-term rewards. The question is left unanswered, indicating a need for further analysis.
The speaker argues that buy the dip has become a dangerous default for younger investors who may not have experienced market crashes. However, the opposing view is that the strategy has been the best approach over the last two decades, and that the danger lies in assuming it will always work.
The speaker states that the decision to switch between being a premium seller and a premium buyer is not solely based on IVR levels but is more driven by opportunity. They mention that there is an IVR level at which they would not sell premium, but they do not buy premium even if IVR is low. The speaker emphasizes that volatility spends most of its life in a lull state, and the decision is more about opportunity than volatility.
The featured product segment on the career tab of Lost Dog provides additional information that can potentially increase the estimated number. The more information provided, the more accurate the model's projections are. This is similar to how AI or machine learning models improve with more data.
Dogged AI generates portfolios based on a methodology that includes a universe of stocks with certain liquidity and volatility characteristics. The portfolio is created based on the user's preferences for liquidity, volatility, and diversification. The speaker notes that this process is similar to how they would create their own portfolio, except that AI sometimes suggests names they are not familiar with.
The speaker states that Micro Strategies is not a short because it is trading like it is bankrupt. However, they mention that if someone wanted to short it, they could have done so from 400 down to 200 at $85.
The speaker prefers selling naked puts over naked calls in the current market environment, citing the high IVR and the skew in the options market. They note that naked calls are less favorable due to the potential for significant upside movement.
The speaker acknowledges that leaving a day job to be a full-time trader is a difficult decision and requires careful consideration. It is suggested that having a reserve of annual salaries can help mitigate the risk, but the decision should be based on personal financial stability and market conditions.
The speaker believes that forced liquidation events, such as those involving Michael Sailor, could create buying opportunities. They reference historical events like the LTCM blow-up and the 2020 market crash as examples where such liquidations led to significant rebounds. The speaker suggests buying digital assets during such events, citing the potential for substantial gains.
The speaker argues that the current market behavior is structural, driven by changes in liquidity, market structure, and investment practices since the 2008 crisis. However, there is a belief that this trend may eventually reverse as markets return to pre-2008 dynamics.
The answer is 100%. Buying the dip refers to purchasing assets during a pullback with the expectation that prices will rise again. The speaker emphasizes that this strategy involves buying during a pullback, regardless of the specific asset class.
The speaker suggests rolling the call spread up and out to August, adjusting the strike prices to 320-330, and rolling the put spread to maintain a small credit. The reasoning is that the current price is slightly below the strike price, and rolling the position to a later expiration could provide more time for the trade to work out.
Trading can be considered both a disciplined probability game and an informed guess. While it involves using mathematical tools to quantify risk and manage positions, it also requires making educated guesses based on market conditions and analysis. The key difference lies in the use of structured tools and disciplined approaches to manage risk and probability.
Trading is viewed as a discipline that involves repetition and consistency, which reduces guesswork and enhances optimization. The speaker argues that active traders today have surpassed investment advisors in methodology due to the development of muscle memory and consistent execution.
The speaker acknowledges that 10% daily swings are not expected to stop immediately, but they are more likely to occur due to increased speculation and options activity. The speaker suggests that such swings are more related to market rotation and speculation rather than fundamental or technical factors.
To start trading futures options, begin with the most liquid and least volatile products such as 6E (euro), ES (S&P 500), ZN (10-year Treasury notes), ZB (10-year Treasury bonds), CL (crude oil), and GC (gold). These products offer the deepest liquidity and best option markets, making them ideal for beginners. It is also recommended to start with simple, defined-risk strategies like vertical spreads to get comfortable with the market and technology.
The 10x rule states that futures options are generally 10 times the size of listed options, requiring more capital. This means traders should use 25 to 30% less buying power when trading futures options compared to listed options.
Trading futures options is not inherently riskier than trading stocks if using defined risk strategies and maintaining smaller position sizes. However, it is important to manage risk effectively and be aware of the nuances of futures options compared to listed options.
The speaker is short S&P futures and NASDAQ options, having covered 10% of their position in the NASDAQ options. They are also short crude oil and gold/silver premium.
The speaker states that earnings reports do not significantly affect market prices, as evidenced by the lack of reaction to poor Tesla and IBM earnings. This suggests that market movements are influenced by other factors beyond individual earnings reports.
The speaker acknowledges that there are certain financial products and stocks that traders may avoid, but the specific examples are not provided. The discussion suggests that personal preferences and risk tolerance play a role in determining which products a trader will or will not engage with.
The speaker states that they avoid trading silver and gold, referring to them as being in a 'penalty box.' They also mention avoiding illiquid stocks with large daily price movements, but acknowledge exceptions for small, speculative trades.
The speaker agrees that there can be a reason to change careers for the sake of change, but emphasizes the need for an underlying motivating factor. This could include dissatisfaction with the current job, lack of satisfaction, or a desire for a different experience.
AI is being forced on individuals as a technological advancement that is already present and will continue to shape industries. It is not a choice but a reality that individuals must adapt to.
Yes, there are plenty of reasons to change career paths for the sake of change, disruption, and innovation. Companies should change custodial leaders every 5-7-10 years to maintain adaptability and disruptiveness.
The current price of Disney is 104.29, down 52 cents.
The transcript states that 68% of viewers believe it does make sense to change a career path for the sake of change. This indicates a general agreement among viewers that such a change is justified.
The speaker advises starting small, investing in highly liquid assets, and listening to anyone found interesting. They suggest that beginners should focus on learning through free content and practical experience rather than expensive courses.
A new investor should focus on the things they can control, such as their decisions and learning process, rather than trying to predict market movements. The key is to spread capital, diversify, and prioritize learning over short-term gains.
A new investor should start by learning about the market and its mechanics, and they should listen to experienced traders or analysts who provide objective and real insights. The speaker suggests that they themselves are a reliable source of information, as they have been around the block and provide honest, unbiased advice.
The speaker states that the daughter is not a passive investor, as she actively trades and gets in and out of positions. However, she does not use derivatives as much as the speaker would prefer.
The speaker suggests that in trading, one should just start and not overthink. The advice is to 'get in there and lose money' and to 'put your helmet on' and 'just do it'.
Yes, the Nasdaq has had three or four red candles in the last 30 days, indicating minor down days.
The speaker suggests that strategy-based trades are useful when market direction is uncertain or volatile. They mention that such trades can be executed without taking a directional stance, allowing traders to profit from volatility. The speaker also notes that strategy-based trades, such as iron condors, can be used in such scenarios.
The speaker explains that strategy-based trades are preferred when the market is in a range and volatility is low, or when the market is overbought/oversold. Directional trades are considered when volatility is high and the market is at an extreme. The speaker emphasizes that the decision is based on the current market regime and volatility state, rather than a specific directional prediction.
The discussion suggests that strategy and market direction are intertwined. One participant argues that strategy-driven decisions are not necessarily based on market direction, while another emphasizes that they are directly connected due to the psychology of trading.
The yield curve trade requires around $5,000 in capital.
The speaker discusses the risks and benefits of working, partnering, or investing with friends and family. While lending money to friends is considered a complete disaster, investing or partnering with friends can be beneficial if the situation is right. The speaker shares a personal experience where they became partners with a friend, which worked well. The key is to ensure the right fit and to be clear about expectations.
Working with family members in a business setting can be challenging due to the pressure to prove oneself, the potential for nepotism, and the lack of objectivity. Family members may face additional scrutiny and must demonstrate exceptional resilience and capability to earn their place in the business.
The VIX is at all-time highs due to increased market risk and uncertainty, as indicated by the speaker's discussion of the market's current state and the potential for further declines in the VIX.
The speaker mentions looking at spooze futures, specifically ES and NQ, as the most important period. They also mention reading their watch list, which includes a variety of assets such as futures, commodities, and stocks.
The speaker discusses watching for outliers in market movements, such as stocks or indices that deviate significantly from the overall trend. They also mention monitoring index futures and looking for unusual movements in commodities like gold and crude oil. The speaker emphasizes the importance of identifying these outliers to spot potential trading opportunities.
The speaker is P&L sensitive and constantly monitors and adjusts positions based on P&L, delta, and theta. They take profits on winners and adjust losers as needed, emphasizing the importance of discipline in managing size and avoiding over-concentration in positions.
Most professionals avoid taking equity in return for advisory work, as it is generally considered a poor business practice. They prefer to be paid in cash because it is more cost-effective. However, in certain cases, such as one-off projects, equity can be considered if the individual lacks the financial means to pay in cash.
An IPO allocation is a guaranteed number of shares given to participants, while trading in the pre-market involves buying or selling shares before the official market open. The key difference is that IPO allocations are fixed and not subject to market volatility, whereas pre-market trading is subject to price fluctuations.
The number of contracts per trade varies depending on the trader's preference and risk tolerance. The average trade size in the industry is around three to four contracts for options and slightly over one contract for futures. The smallest trade size can be as low as one lot, while some traders may trade up to 10 or more lots.
The major factors influencing bond market moves include Fed policy expectations, interest rate changes, economic data, and market sentiment. The speaker notes that the bond market is currently moving in the opposite direction of what is expected from Fed policy, indicating that the market is reacting to factors beyond the Fed's immediate control.
The speaker suggests making as much money as possible and dealing with taxes later, rather than constantly being mindful of tax implications. While there are tax advantages to certain instruments like SPX options, the speaker emphasizes that focusing on trading success is more important than overthinking tax strategies. The speaker also notes that taxes are a 'high-class problem' and that paying them is a sign of success.
The speaker believes the over/under market on the Bears for next year is nine and a half, despite the team's difficulty in repeating their current performance.
Prediction markets are not necessarily a better customer experience than traditional bookmakers. While they offer more diverse markets, they typically have higher fees and wider spreads. Traditional bookmakers like DraftKings and FanDuel provide similar market coverage with lower fees, making them more attractive for traders. Prediction markets may have more limited liquidity and worse fees, especially in sports betting.
The transcript suggests that AI may not directly influence the betting market unless it can predict outcomes such as stock movements or sports events. However, AI could be used to compare market widths and fee structures to help users identify the best market for a bet.
When rolling out in time to defend a naked put, you move the strike out of the money. This reduces risk by about 30% and provides additional duration and wiggle room. The exact number of strikes moved depends on the strike width (e.g., five-point wide or one-point wide).
The speaker explains that the approach to evaluating deltas depends on the type of trade. For options, they typically look at deltas around 22-30, while for futures, deltas are not a primary focus. The key is maintaining consistency in the chosen strategy.
The speaker explains that when they invest in a company, they focus entirely on it, and when they pivot to a new project or direction, it's a natural part of their process. For investments in other businesses, they typically take a passive role, engaging with founders but not dedicating significant time or bandwidth. When building their own companies, they maintain a single-minded focus, ensuring they do not dilute their attention or lose sight of their core objectives.
The most consistent and recommended options strategy is selling naked puts. This strategy has provided 'free money' over 16-17 years since 2009 with minimal risk and consistent returns. It is highlighted as the best choice for long-term, low-risk investment.
The speaker acknowledges that setting up a cooperative is complex and varies depending on the context. They mention examples like Costco and REI, which started as cooperatives, but note that modern cooperatives are less understood. The speaker suggests consulting a business attorney and considering the advantages of a cooperative over other business structures like LLCs or C corps.
A cooperative is a business model where customers are owners, and they collectively own and manage the business. A fundraiser is a one-time event or activity aimed at raising money for a specific purpose, such as funding a ski club.
Bitcoin was mentioned to have declined by 5,000 to 90,700.
The speaker reminds viewers to sign up for the newsletter to participate in a contest before January 31st.
The speaker is questioning the relevance of news in the context of market movements, suggesting that the market continues to rise regardless of news events.
It is reasonable to use employer stock purchase programs to build a portfolio if the individual believes in the company. These programs offer a discount on stock purchases and provide a consistent investment approach. However, there is no guarantee of stock price appreciation, and individuals who do not believe in the company should consider whether they want to hold equity in it.
The market can theoretically go down 15% without a catalyst, but it's unlikely due to regulatory mechanisms like the uptick rule. However, such a drop would typically be a result of broader market conditions or systemic risks rather than a single event.
No, proof of concept is not required for early-stage investing. Investors typically look for more than just an idea, such as potential revenue or a clear business model. However, proof of concept is more relevant for later-stage investments.
The speaker discusses the current market news, focusing on the situation in Venezuela and its impact on crude oil prices. The market has largely ignored the news, with crude oil prices experiencing a normal intraday move. The speaker notes that the market does not perceive Venezuela's situation as a significant disruption.
The speaker does not provide a definitive answer but suggests that the decision depends on the trader's risk tolerance and market conditions. Tighter spreads may offer more frequent opportunities due to their lower cost, while wider spreads may offer higher potential rewards but with greater risk.
The research indicates that widening the strikes is more effective than adding more contracts. This approach reduces risk and increases the probability of success, supported by mathematical and statistical reasoning.
The speaker reported a good trading year, achieving 1.2-1.5% monthly returns. The year was characterized by a strong rally in the latter part, which surprised the speaker, but they were able to stabilize the portfolio and end with three 'birdies' (likely referring to successful trades).
The speaker suggests a combination of trading and other avenues for wealth creation. They emphasize the importance of understanding risk-taking and financial discipline, such as living below one's means and having a cash machine (a source of consistent income).
The speaker confirms that they have conducted research on post-earnings announcement drift. They explain that while some stocks may show a slight follow-through, the overall movement is largely random within 24 to 48 hours after the announcement. The speaker emphasizes that this randomness makes it an unreliable strategy for consistent returns.
The speaker acknowledges that there is a perceived January effect due to the open interest in LEAP options expiring around January. However, this is not a guaranteed trend and is more of a market perception.
The speaker suggests that the market is not reacting to the situation in Venezuela due to its relatively small impact on global markets. They also mention the potential risks of geopolitical tensions, such as those involving China and Taiwan, which could have a more significant impact on the market.
The speaker suggests that watching TikTok would be more beneficial than watching news channels like A and Newsmax, implying that TikTok provides better insights or entertainment.
The speaker states that the Venezuela situation does not remind him of the limit up situation during Desert Storm. He explains that the expectations and outcomes were different: during Desert Storm, the market was expected to open down limit but instead opened up limit, whereas the current situation is not comparable. The speaker also notes that he had significantly more risk on in 1992 than he does today.
The secret sauce to surviving the next crash is knowing when the market is about to crash. The strategy involves maintaining a diversified portfolio across different assets, strategies, and time frames, while keeping position sizes small. Allocation is crucial, and diversification helps mitigate risk.
Founders often obsess over metrics like EBITDA and free cash flow, which can be misleading. The most important metric for both founders and investors is consistent, organic growth. This growth indicates the business's ability to expand and sustain itself, rather than focusing on immediate profitability. Founders should prioritize growth over short-term financial metrics, as it reflects the company's long-term viability.
The wash sale rule does not apply to cryptocurrencies. The IRS classifies cryptocurrencies as property, not securities, and thus they are not subject to the wash sale rule. This allows traders to sell a cryptocurrency at a loss, claim the loss for tax purposes, and immediately repurchase the same cryptocurrency without a 30-day waiting period.
The speaker states that there is almost no difference between SPX and XSP in terms of movement and speed. Therefore, the choice between the two is largely irrelevant, and the focus should be on the strategy itself. The trader suggests that the key is to choose the one that allows for faster profit realization, but this is not guaranteed.
The answer suggests analyzing the person's returns. If they are making money, there's no need to convince them. If they are not, it's likely they are buying out-of-the-money options hoping for a large move, which is unlikely to be profitable. The analogy of insurance is used to explain the difference between buying and selling options, emphasizing that selling options can be more profitable than buying them.
The speaker supports the idea, stating it would be useful and beneficial. However, they acknowledge that it's unlikely to happen due to corporate resistance and the current structure of board selection.
There is no single 'market makers playbook' that can be mastered, but there are reference guides and books that provide insights into trading strategies. Recommended books include 'Liar's Poker', 'When Genius Fails', and 'Options as a Strategic Investment'. These books are more about understanding market behavior and trading psychology than providing a step-by-step playbook.
The speaker suggests selling out-of-the-money puts as a way to capitalize on increased volatility and premium capture during a market drawdown. This strategy allows for exposure to market movements without the need to own the underlying asset. The speaker emphasizes that this approach is safer than buying long shares and involves taking small, incremental steps to manage risk.
The speaker suggests that splitting an account into multiple accounts is not necessary unless it helps with organization and clarity for the trader. They argue that managing multiple accounts can be more complex and that the performance of the account is not significantly improved by splitting it. The speaker also mentions that it's not advisable to expect higher returns by splitting the account into multiple parts.
Organic growth is best measured by the number of customers or users acquired over time, with a focus on steady, consistent growth. While revenue and profitability are important, they are secondary to the core metric of increasing customer base.
The speaker suggests that the story has changed over the years and that it's not Tom who told it. The speaker implies that the story is a rumor and may not be accurate.
The speaker clarifies that the concept of a reasonable entry is not relative to an individual's account but is subjective and based on personal judgment. This implies that there is no universal standard for entry points, and each trader must define their own criteria.
The wind chill in Chicago was not mentioned as a significant factor, with the speaker indicating that it doesn't matter. The temperature was reported as 15°, with a Caribbean breeze making it feel warmer.
The speaker mentions that they say good luck almost every email, but when asked specifically about saying it to someone they actually meant to, they admit they don't say it often. They also mention that they say good luck sarcastically or in a non-serious manner.
For retail investors, SPY is the recommended choice for beta weighting. While QQQ might be used in high-frequency trading scenarios, SPY is simpler and more consistent for most retail traders. The key is to avoid overcomplicating the process and to stick with SPY for most scenarios.
The speaker believes there is risk within the AI world that could impact the entire market if issues arise, but it is not considered a systemic risk like the 2008 housing crisis. The overall market has been lifted by a handful of stocks, increasing vulnerability.
The speaker believes that the financial system came close to failing in 2008-2009 but did not fully collapse. The discussion highlights the fear and uncertainty during that period, with the bond market locking up for several days. The speaker suggests that the current market environment, particularly with the AI bubble, may be approaching a similar situation.
The current price of SMH is $70, with a price increase of 76 cents and a price decrease of 59 cents.
The unemployment rate for recent college graduates has increased from 4.6% to 5.7%, representing a 20% rise.
New graduates should not be seduced by money and should prioritize opportunities that align with their long-term goals and personal growth. Money is important but should not be the number one factor.
The speaker highlights that flexibility is crucial in career choices, as opportunities may not align with initial plans. Being open to different paths and willing to adapt can lead to unexpected but rewarding opportunities.
Pattern day trading rules restrict traders who execute four or more day trades within five business days from trading in stocks unless they maintain a minimum account balance. This has historically made scalping in stocks difficult for retail traders with small accounts. However, the introduction of commission-free trading and micro futures has mitigated some of these restrictions, allowing for more flexible trading strategies.
Yes, there are rules and guidelines for scalping stocks. These include understanding daily expected moves, aiming for a percentage of that move, and leveraging tight markets and high liquidity.
The expected move for Micron is $30.
The speaker states that there is no market condition that would make them switch from a premium seller to a call buyer. They mention that reducing position size is a possibility, but it's not a switch in strategy. They also suggest that a massive market downturn could lead to a shift, but this is considered unlikely.
The daily expected move is a real-time derivative of implied volatility and is considered more accurate for trading decisions. The average true range is a visual tool for some traders, but the speaker prefers the daily expected move. If there is an AR between the two, the daily expected move should be deferred to.
The S&P is mentioned to have opened at 57.60, with a significant increase of 50 points. The Nasdaq is noted to be slightly higher but not as impactful as the S&P.
Warsh may take actions to maintain the Fed's statutory autonomy, such as reinforcing the Fed's independence through policy decisions or communication. The exact actions are not specified, but the focus is on maintaining the Fed's independence.
The speaker suggests that if Tesla is acquired by SpaceX, long call options on Tesla would be profitable if the strike price is below the acquisition price. However, the outcome depends on the strike price and the actual deal price. If the deal fails, the options may expire worthless.
The show is planned to go on the road in the second half of the year, specifically Q3 and Q4. There are already scheduled events, but no firm dates have been set for the show's own events yet.
The speaker discusses margin requirements for short options, particularly for SpaceX, and mentions a trade involving a broken-wing butterfly strategy. The speaker also notes that the margin requirements for short options are full, with no relief.
The call is 40-50% more expensive than the put, indicating a significant call skew.
Wheel trading involves selling a put to acquire a stock and then selling calls against it. This strategy is used to generate income from both the put and call options, with the goal of profiting from the stock's price movement.
The transcript suggests that the Fed communicates extensively due to high compensation for speaking engagements, which may incentivize more communication. This is seen as a factor in the increased frequency of Fed statements and the complexity of their messaging.
In futures trading, profits are typically taken at a certain percentage of the expected move. For example, if the expected move in the S&P is 40 points, a reasonable expectation is to take profits at 25% of that move. This approach helps manage risk and capitalize on market trends effectively.
The absence of an instrument that measures upside skew, similar to the VIX, is attributed to the complexity of creating such a tool. The VIX measures fear and volatility, while an upside skew instrument would need to capture complacency or market confidence. The challenge lies in designing an index that resets monthly, which could affect its reliability. Additionally, the market's efficiency and the diversity of instruments make it difficult to create a standardized measure for upside skew.
The speaker outlines several strategies for trading FOMC reports, including fading the initial spike, waiting a day before fading the initial spike, rolling with the trend, using the CME Fed Watch Tool, and using smaller futures contracts.
The speaker states that they do not love selling front month strangles in ZB or ZN because they have not paid off in the past, although they acknowledge that this may change with the current Fed announcement. The speaker suggests that if nothing is expected to happen, selling strangles is a viable option.