Trade idea
USO selling calls
The speaker took a short position by selling calls on USO at 30 and 3040 when it hit a dark pool at 127 and 18 cents. The trade was based on the idea that dark pools could provide insights into market movements, and the speaker believed that the price action in dark pools could be used to inform trading decisions. The trade was executed with the expectation that the price would not move significantly beyond the dark pool levels.
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Strategyselling calls
AssetETF
Expirationnot specified
Time horizonnot specified
Entry / triggerUSO hit a dark pool at 127 and 18 cents
Target / exitnot specified
Invalidation / stopnot specified
SpeakerSpeaker
Risks- Market volatility
- Liquidity issues
- Inability to execute trades at desired prices
Trade idea
TLT Put-selling
The speaker is selling June 85 puts for TLT, expecting the price to remain above the strike price. The trade is based on the assumption that the price of TLT will not fall below 85, allowing the seller to keep the premium. The speaker mentions that they sold puts in bonds yesterday and are applying the same strategy here.
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StrategyPut-selling
AssetETF
ExpirationJune
Time horizonShort-term
Entry / triggerSell June 85 puts for about 90 cents
Target / exitHigher than 90 cents
Invalidation / stopIf the price of TLT drops below the strike price of 85
SpeakerSpeaker
Risks- If the price of TLT falls below 85, the seller may be obligated to buy the underlying asset at the strike price, resulting in a loss.
Trade idea
IBIT Put Buy
The speaker suggests buying July 34 puts on IBIT, which are priced near $120. The put has a pop of 67%, with an IVR of 43 and an expected move of $3.70. The trade requires $1,400 in buying power, with 10% allocated to the trade. The speaker views this as a favorable risk-reward opportunity for a long Bitcoin position.
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StrategyPut Buy
AssetETF
ExpirationJuly
Time horizonShort-term
Entry / triggerPrice near $120
Target / exitPop of 67%
Invalidation / stopPrice movement against the trade
SpeakerSpeaker
Risks- Price movement against the trade
- Volatility changes affecting the put's value
Trade idea
TLT bearish option trade
If inflation remains sticky and long-term yields stay elevated, a bearish option trade in TLT is a valid strategy. This is because TLT is inversely correlated with bond yields, and a short position in TLT would benefit from rising yields. The speaker suggests that ZB or ZN are cleaner alternatives, but TLT is still a viable option for smaller positions.
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Strategybearish option trade
AssetETF
Time horizonshort-term
Entry / triggerinflation remains sticky and long-term yields stay elevated
Invalidation / stopif inflation or yields move contrary to expectations
Speakerspeaker
Risks- market volatility
- unexpected changes in inflation or yields
Trade idea
QQQI overlay with NDX options
The QQQI ETF allows investors to borrow against their portfolio, leveraging the yield to offset loan costs. This strategy is effective in a rising market, as the yield from the portfolio offsets the interest rate cost. The overlay with NDX options provides additional leverage, but the strategy is vulnerable to market downturns, where the collateral can be liquidated. The success of this strategy depends on the market continuing to rise, and the risk is primarily market-related.
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Strategyoverlay with NDX options
AssetETF
Expirationvariable
Time horizonshort-term
Entry / triggerrising market
Target / exitmarket continues to rise
Invalidation / stopmarket decline
Speakeranonymous
Risks- market downturn
- collateral liquidation
- interest rate changes
Trade idea
QQQ straddle
The strategy involves buying straddles in the QQQ (Nasdaq-100 ETF) due to its lower implied volatility (24) compared to Nvidia (NVDA) with higher implied volatility (56). The idea is to capitalize on the volatility difference by buying the QQQ straddles and selling the NVDA straddles, weighted by volatility. This approach aims to profit from the difference in implied volatility, assuming the market behavior aligns with the volatility forecasts.
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Strategystraddle
AssetETF
Expirationmonth
Time horizonshort_term
Entry / triggerimplied_volatility_difference
Target / exitvolatility_profit
Invalidation / stopvolatility_convergence
Speakerunknown
Risks- volatility_convergence
- liquidity_constraints
- market_movement
Trade idea
SLV scalping
The speaker mentions SLV as one of their favorite stocks to trade, indicating a preference for this ETF. The strategy involves scalping, which requires quick entry and exit to capture small profits. The speaker's focus on active trading in the equity marketplace suggests that SLV is a viable candidate for scalping due to its liquidity and market activity.
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Strategyscalping
AssetETF
Time horizonShort-term
Entry / triggerActive trading in the equity marketplace
Target / exitNot explicitly stated
Invalidation / stopNot explicitly stated
SpeakerTom
Risks- Market volatility
- Liquidity risk
- Execution risk
Trade idea
TQQQ volatility trading
Trading volatility through short puts and calls in TQQQ can be more profitable than in QQQ due to higher liquidity in TQQQ. 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 strategy is suitable for short-term trading, but traders should be cautious about the liquidity of options and the potential for wider spreads.
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Strategyvolatility trading
AssetETF
Time horizonshort-term (weeks to months)
Entry / triggerwhen the underlying stock is actively traded and options are less liquid
Invalidation / stopif the underlying stock or options show significant liquidity issues or market volatility beyond expected levels
SpeakerMitch
Risks- liquidity risk in options
- market volatility
- execution risk due to lower liquidity in options
Trade idea
IBIT volatility trade
The trade involves selling a put option on the IBIT ETF, which is expected to have a 10% return over 50 days. The expected move is 450, and the trade is considered a 70% annualized return. The trade requires an initial investment of around $800, with a 80% probability of success and a 91% P50. The trade is based on the assumption that the price will remain within the expected range.
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Strategyvolatility trade
AssetETF
ExpirationAugust
Time horizon50 days
Entry / triggerIBIT trading around $36
Target / exit450
Invalidation / stopif the price moves outside the expected range
SpeakerScott
Risks- significant losses if the price moves outside the expected range
- market volatility may affect the outcome
Trade idea
SLV Put buying before a potential market crash
Buying puts on silver (SLV) before a market crash can capture significant gains if the underlying asset drops by 30%. The trade should be exited once the target is reached, and profits should be taken to avoid overexposure. This strategy requires identifying early signs of a market downturn and acting decisively to secure profits.
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StrategyPut buying before a potential market crash
AssetETF
Time horizonShort-term (days to weeks)
Entry / triggerBefore a significant market downturn
Target / exit30% drop in underlying asset
Invalidation / stopMarket reversal or failure to reach target
SpeakerScott
Risks- Market reversal
- Failure to reach target
- Volatility risk
Trade idea
SOXS Writing calls against underlying stocks to benefit from option decay
Writing calls against SOXS (a bear three times semiconductor ETF) can benefit from a bull market and option decay. The strategy involves writing calls to capitalize on the decay of the premium, which naturally decreases over time. The goal is to approach a zero basis, which indicates that the cost basis of the position is effectively eliminated. This strategy is suitable in a bull market where the underlying asset is expected to appreciate, allowing the premium to decay while the position remains profitable.
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StrategyWriting calls against underlying stocks to benefit from option decay
AssetETF
Expirationnot specified
Time horizonLong-term
Entry / triggerBull market with positive option decay
Target / exitBasis approaching zero
Invalidation / stopMarket reversal or significant volatility
SpeakerNeil
Risks- Market reversal
- Significant volatility
- Liquidity issues in the options market
Trade idea
XLU Mean Reversion
The speaker has consistently lost money on XLU over a 10-year period, with every year showing a negative P&L. This indicates a mean reversion opportunity, as the ETF has not moved significantly despite long-term trading. The strategy is to short the ETF, expecting a reversal to a more neutral or positive trend. The invalidation is if the ETF shows a sustained upward trend or significant volume increase, indicating a potential reversal.
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StrategyMean Reversion
AssetETF
Time horizonLong-term
Entry / triggerWhen the ETF is in a prolonged downtrend with no signs of reversal
Target / exitBreak even on initial investment
Invalidation / stopIf the ETF shows signs of a sustained upward trend or significant volume increase
SpeakerThe speaker
Risks- Market volatility
- Liquidity issues
- Potential for extended downtrend
Trade idea
SIL shorting silver ETF
The speaker shorted silver at 52, expecting a significant move to 112 or 113. The move was described as a rare and extreme event, with the speaker noting that it was a multi-standard deviation move. The speaker also discussed the challenges of hedging such a position, noting that gold only hedged 15-20% of the losses.
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Strategyshorting silver ETF
AssetETF
Time horizonshort-term
Entry / triggersilver price at 52
Target / exitsilver price at 112 or 113
Invalidation / stopsilver price moving against the short position
SpeakerRyan
Risks- Large potential losses if the position moves against the short
- Difficulty in hedging such a large position effectively
Trade idea
SLV strangles or iron condors
The speaker recommends short strangles or iron condors in SLV when IVR is high, as the ETF's smaller size and high volatility make it a suitable candidate for volatility-based strategies. The strategy involves rolling positions forward to Feb rather than Jan, and avoiding adding to existing positions. The rationale is that high IVR indicates potential for large price swings, making volatility-based strategies more profitable. The risks include the potential for large losses if IVR drops unexpectedly or if the market moves against the position.
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Strategystrangles or iron condors
AssetETF
ExpirationFeb
Time horizonShort-term, with rolling positions forward
Entry / triggerHigh IVR
Target / exitUncertain, depends on IVR and market movement
Invalidation / stopIf IVR drops significantly or market moves against the position
SpeakerUnknown
Risks- Large losses if IVR drops
- Market movement against the position
- Need for careful position management
Trade idea
ETHA volatility trading
The speaker has traded ETHA extensively and notes its high volatility, with the market typically 10 cents wide. They mention that trades can be filled one or two cents off mid-price. The speaker has held a position in ETHA since its inception and suggests it as a viable option for trading Ethereum.
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Strategyvolatility trading
AssetETF
Time horizonshort-term
Entry / triggerhigh volatility environment
Target / exitmid-price + 2 cents
Invalidation / stoploss of 10 cents
SpeakerScott
Risks- high volatility
- slippage
- market gaps
Trade idea
SPCX volatility trade
The speaker discusses a trade involving SPCX, where they sold a put at 145 and short calls at 260 and long calls at 265. The trade was executed with the expectation of a bullish market, and the speaker suggests that the calls could be adjusted to be closer to the money for better results. The trade was exited with a 1050 credit, and the speaker believes that the trade could be improved by adjusting the strike prices.
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Strategyvolatility trade
AssetETF
Expirationnot specified
Time horizonshort-term
Entry / triggermarket price at 150
Target / exit1050 credit
Invalidation / stopmarket price below 145 or above 265
SpeakerAnetta
Structure / legs- short put at 145
- short call at 260
- long call at 265
Risks- Market volatility could lead to losses if the price moves outside the expected range.
- The trade involves complex options strategies that require careful risk management.
Trade idea
EWY buy the dip
The KOSPI index, represented by the EWY ETF, has dropped 18% in two days due to the Iran war. This presents a potential buying opportunity. The speaker suggests buying the dip by purchasing call spreads of various durations, focusing on short and long-term options. The rationale is that the market may bounce back, and the call spreads can benefit from the recovery. The entry point is at 54.50, with options prices indicating potential for profit. The risk is the market continuing to decline or not recovering.
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Strategybuy the dip
AssetETF
ExpirationApril 14th
Time horizonshort-term
Entry / triggermarket down 18% in two days
Target / exitbounce or recovery
Invalidation / stopfurther decline or lack of recovery
SpeakerArthur
Structure / legs- call spreads of various durations
Risks- further decline
- lack of recovery
- volatility
Trade idea
SLV scalping
The speaker discusses selling SLV at 108 and 109, then scalping the position as the price dropped. This indicates a short-term scalping strategy where the trader sells at a higher price and buys back at a lower price to profit from the price decline. The thesis is based on the trader's ability to identify short-term price movements and execute trades quickly to capitalize on the price difference.
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Strategyscalping
AssetETF
Time horizonshort-term
Entry / triggerPrice above a certain level
Target / exitPrice below the entry level
Invalidation / stopPrice above the entry level
SpeakerUnknown
Risks- Price could move against the trade
- Slippage in execution
- Market volatility
Trade idea
Q's Out of the Money Call Spread
The Q's ETF has a high implied volatility rank (72%), indicating potential for significant price movements. A bearish trader can profit from a call spread by buying a call at $80 and selling a call at $85, capitalizing on the ETF's volatility. The strategy is suitable for a slightly bearish outlook, with a target of 50% of the premium. The risk is limited to the cost of the long call, and the trade should be closed if the market moves significantly higher.
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StrategyOut of the Money Call Spread
AssetETF
ExpirationNot specified
Time horizonShort-term
Entry / triggerMarket is bearish
Target / exitMax profit of 50% of the premium
Invalidation / stopMarket moves significantly higher
SpeakerSpeaker
Structure / legs- Buy a call at $80
- Sell a call at $85
Risks- Market moves higher than expected
- Volatility decreases
- Liquidity issues
Trade idea
GLD Put selling
The speaker sold puts in GLD (Gold ETF) earlier when gold was down, and now it's up $69, indicating a potential reversal. The trade idea is to capitalize on the upward movement by selling puts, expecting the price to remain above the strike price. The strategy involves leveraging the increased volatility around the Fed meeting, with the expectation that gold will continue its upward trend.
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StrategyPut selling
AssetETF
Time horizonShort-term
Entry / triggerGold price below a certain level
Target / exitPrice movement upwards
Invalidation / stopSignificant downward movement or market reversal
SpeakerScott
Risks- Market reversal
- Volatility contraction
- Liquidity issues
Trade idea
USO defined risk
A short put butterfly is a high probability trade that can be used when the markets are wide on the call spread side. This strategy is bullish and aims to collect a small premium. However, it is important to note that the trade is only profitable if the crude oil price moves higher, and the risk increases if the price moves against the trade. The trade is best executed when the market is in a late cycle, and the trader should be prepared for potential losses if the trade goes against them.
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Strategydefined risk
AssetETF
Expirationnot specified
Time horizonlate in the cycle
Entry / triggermarkets are wide on the call spread side
Target / exitcollect a few pennies
Invalidation / stopif the crude oil price moves against the trade, the risk increases significantly
SpeakerChris
Structure / legs- short put
- long put
- long put
Risks- significant risk if the crude oil price moves against the trade
- limited profit potential
Trade idea
TLT buying TLT
The speaker suggests that the bond market may be undervalued, and thus, buying TLT could be a viable strategy. The speaker also notes that the bond market is not following the Fed's agenda, indicating that there may be opportunities for long positions in bonds. The speaker's reasoning is based on the current market behavior and the expectation that bond prices may eventually stabilize or rise.
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Strategybuying TLT
AssetETF
Time horizonnot explicitly stated
Entry / triggerwhen the bond market is perceived to be undervalued relative to other assets
Target / exitnot explicitly stated
Invalidation / stopnot explicitly stated
SpeakerBrian
Risks- Market volatility
- Interest rate changes
- Economic data shifts
Q&A
What is the Smith maneuver?
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.
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Actionable takeawayThe Smith maneuver is a Canadian tax strategy that allows mortgage interest to be tax-deductible, potentially reducing the effective cost of borrowing and enabling investors to use tax savings to pay down principal.