[00:02] show. My name is Mike Butler. I'm here with Jamal Chandler and it is Tuesday, July 14th. The banks just reported earnings and we just got the CPI report down six and then I looked at the screen and now they're up 45.
[00:17] running today, folks. Things are happening. CPI is hidden. Um I need to I got such long deltas. I need to do um a super bear possibly here. Um we'll see.
[00:29] So, um, yeah, I'm trying to figure out how to structure this thing, but, uh, wow, nice little move into the CPI print here. Things are running. CPI 3 and a here. Things are running. CPI 3 and a half% versus 3.8% expected. And, uh, X
[00:43] half% versus 3.8% expected. And, uh, X food and energy 2.6% versus 2.8%. So, you know, hey, yields are yields must be fading hard here, I would assume. >> It was an incredible It was an incredible uh rip on the open. E- Mini's
[00:56] incredible uh rip on the open. E- Mini's up 35, NASDAQ up 400, Bitcoin up, 1100. up 35, NASDAQ up 400, Bitcoin up, 1100. Uh quite a move here. And the initial read was uh some of these banks were down this morning. JP Morgan, I had some
[01:09] call uh call calendar spreads. $2 debit though, so pretty cheap. Uh those are though, so pretty cheap. Uh those are down. JP Morgan's down to 326 right now. >> we will see how the banks react here. But the general market ripping higher.
[01:23] not a shout out. It's not a good thing, but IBM's getting smoked. Apparently, earnings until July 22nd, and they pre-announced and the stock's down 20%. going to affect some of the other semi-names here. Um, but yeah. Wow.
[01:39] Things are moving. >> They are moving. >> We're at 7,600 once again in the ES. We were dancing around the other day before >> yeah, things are moving around. >> Uh, but yeah,
[01:52] rundown on the schedule, join us on the there. Just throwing your trade ideas questions along the righthand side chat and uh we will get some rapid fire questions answered, trade ideas. Uh lots
[02:05] to talk about this week in these markets. markets. >> Yeah, for sure, man. Um let's see. Um so I'm looking at right now. Uh you said you got filled on a upside one, right?
[02:17] >> Yeah, Super Bowl. >> I got filled really. I I mean, unfortunately, I it was filled like a minute before the uh CPI came out. 728.50 uh is when I was filled for 10-cent
[02:30] >> But yeah, it was a >> uh 7500 7490 in the one day. 7500 7490 short put spread to finance the 7565 7580 15 point wide call spread. It's up
[02:43] 500 bucks right now. uh with this strength in the market, I think uh we'll see if we can get a little bit out of this. But yeah, quick win so far. Uh maybe I'll maybe I'll secure it and move it up. I don't know. What do you think?
[02:58] >> Um yeah, I mean uh I don't know. Maybe maybe maybe you can move it up. of this. Just if this thing fades, I'm going to be gonna be annoyed. [laughter] >> So let's try let's just try and get 550 out of this thing. Um,
[03:14] I think I need to actually route that. Yeah, I mis routed that. I got to do this for 24hour trading here. But yeah, we'll do we'll do a $500 credit today.
[03:28] >> I know. And you know, here's the thing. We are lining these up. It is interesting. The credits that we're getting in the AM are a little bit normally be I feel like maybe a dollar credit. I'm getting $2 credit right now
[03:40] credit. I'm getting $2 credit right now for the down. That just doesn't seem >> Of course, we would have to fall about >> 480. >> So, 500 buck profit.
[03:52] >> Yeah. Yeah. >> I uh Yeah, I totally forgot that that >> I uh Yeah, I totally forgot that that the uh CPI came out right at 7:30. Um but yeah, wild markets here. We had a bunch of banks report earnings. If you
[04:05] didn't see the news and insights tab yesterday on Tasty Live, you can always check that out. We've got a lot of written content coming your way uh there, but I wrote an earnings preview for JP Morgan, Goldman Sachs, Bank of
[04:17] for JP Morgan, Goldman Sachs, Bank of America, Cityroup, and Wells Fargo, and all of those reported before the market opened today. But again, I only had a position in JPM. Uh two call calendar spreads, but a total debit of 200 bucks.
[04:29] This will be a loser on the open for sure, but uh I'll I'll just buy back options that are going to be worthless and I'll just ride out these 10 days. If win. >> That's awesome, dude. I mean, that that
[04:42] um you got to love uh when you get a nice win at some point in time, >> for sure. Especially when my uh zero day Super Bowl yesterday expired 35 cents in the money completely. [laughter] >> So, not great. Not great. Uh but yeah, I
[04:58] think when we got uh when we got the E- Minis up, NASDAQ up, Dow is down, which was the opposite effect of yesterday. Uh the Dow seems to be moving in isolation the last couple of days. But let's bring on Chris Veio and see what he's got to
[05:14] say about these uh markets here with the banks down, rest of the market up. opposite day. >> It does feel like opposite day. That CPI up. Uh guys, do you know what the annualized rate of inflation is with 0%
[05:29] month- over-month inflation? >> It's zero. >> Is this like a damn CFA test? What? Don't do that to us in the morning, man. Don't do that to us in the morning, man. [laughter]
[05:43] market was anticipating, right? No one cares about the headline right now the past month or two, you got a 25% past week, what another 15% to the upside. So how how accurate is going to
[05:57] care about that actually has the energy input into it. Probably volatile. So causing a problem throughout the system, did not appear in the core. So I think the first thing that we have to look to
[06:10] today, guys, if you want to go to the SR3Z6 contract, uh rate hike has past 7 minutes. um we were leaning towards a second to 25 basis point rate hike this year. We're now back to just one. And that's probably going to be the
[06:24] most important thing about today's uh today's market that this pressure valve of potential two hikes and rocketing short-term yields. We just put a break on that trade. >> Craziness.
[06:36] >> Craziness. Yeah. I think uh I I would love to see the CME Fed watch tool uh and the the cumulative change over time. see where we're at now. Um because we've been just rising slowly but surely.
[06:53] What do you think of these uh the E- Mini and the NASDAQ kind of opposing the financials with the financials that have led us up quietly over the last couple down this morning? >> They are. I mean, if you're looking at
[07:07] Sachs, if it's uh Bank of America, if it's JP Morgan, they made a lot of money trading stocks in recent months. their uh their fix divisions, fixed income, currency and commodities have likewise done very very well. But also this was a
[07:19] very volatile period in the markets. How how often can you replicate that kind of see what we just saw through March, April, and into May, right? Um probably you're looking at these earnings numbers, would these banks expected to
[07:34] do anything big? Yesterday on the show, TP and I were talking about a potential trade in uh in city, for example, looking at the relative volatility in the banks actually do? Are these exciting things? What was it? Broadcom
[07:47] or Micron a few weeks back had a 14% plus or minus implied move. City Group plus or minus implied move. City Group was around 3% yesterday. So, um, yes, good numbers, but where do we go from here? So, short iron condor, I'm
[08:00] thinking 3 days to expiration right now. 146, 148, 136, 134. We're basically point of that. Uh I got a question for you then. If we're managing these were directionally neutral to take advantage of a market that probably gets
[08:14] expiration, how are you managing your trades here? Do you take it off come to pass or do you ride this into the sun through Friday? the sun through Friday? >> Um I would say if the markets are liquid
[08:28] and you're looking at over 50% profit, I would just rip it off. Um I think I think you might have a little bit of volatility that stays bid here, but it [clears throat] seems to be an almost exactly flat open here in city.
[08:43] Uh so you might you might actually get a bigger increase uh in the premium that you can capture right away because the neutral moves after earnings are really crushes just because the market's expecting some kind of move and you get
[08:57] literally nothing. Yeah, it just depends on the strategy, >> Yeah. I mean, this is a short iron condor. Yeah. Um I'm not really I'm not really a a uh you know, an earnings trader, so to speak, but for for some of
[09:12] volatility stocks, unless there is an enormous like almost material putting the business at risk, surprise, it's going to be difficult to move them. Um now, right? So there's not overpositioning and crowding in these
[09:26] names that could generate that type of violent girration after earnings. So uh but in recent weeks when I've dabbled a little bit in their earnings trades, the semiconductor stuff has gone mostly sideways in so far as like not working
[09:42] because the V has been so large >> late. Whereas when I'm doing it in like the boring stuff, the stuff that no one's paying attention to like the city groups, it seems to be working out a little bit better.
[09:54] at Goldman yesterday. I couldn't decide what I wanted to do. I actually tried to get in on a super bull trade um that would have started to really take effect above above um 1,100, but [clears throat] I never got it off
[10:07] because things were so wide. But um I mean it clearly they did well. Guess what? They still know how to make money. Things are going well with Goldman. So uh stocks making a nice little move here. JP Morgan on the other hand moving
[10:20] here. JP Morgan on the other hand moving a little to the downside, right? And um I'm not sure what the reason is behind it, but um it's kind of fascinating when from the rest. >> Yeah. And JP Morgan's JP Morgan's
[10:36] Uh was >> 86% higher, >> 6 billion on 2.11 billion more than analysts expected. So, like again, how earning streams when they're tethered to a macro and volatility environment that
[10:51] a macro and volatility environment that was historic? You know, you got to probably not, you know, probably not sustainable. income when it comes to banks? >> Do we? Bank of America had a pretty good
[11:04] net interest income. Uh, it was up 9% here. They are down before the opening So >> this is this is the nature of earnings people. Uh you think you can nail it on the head and it still moves in the other
[11:19] >> Um but >> that's the thing. All the analysts missed today to the downside. All the banks beat expectations handily. Most of the shares are still down, [laughter] >> right? So
[11:33] >> classic reversal. Um yeah, I think it's really interesting especially JP Morgan to see it down but still within the expected move and the expected move in JP Morgan was only like 3%. Uh just super low. So the markets the implied
[11:48] volatility was right in this case in terms of uh the realized move being less than implied uh which >> not so fast my friend. It's not open >> It's not dead yet. It's not over. >> We still have about 40 minutes till the
[12:02] seen days where they're kind of flat like this and then they reverse or go lower or maybe reverse and go higher. Who knows? Uh I guess we'll it it seems like um everything is happening right at the moment because we walk right in. We
[12:15] the market. >> We got their moves. But uh I don't know >> Gentlemen, can I can I bring you to the JP Morgan chart here because I have a morning like what do I want to go shopping for today? And as a trend
[12:30] for stocks that have pulled below their one-month moving average, but are still sitting above their 50 and their 200, suggesting that a longerterm trend is still in place, but we're merely facing a temporary setback here. Um, my scan
[12:43] this morning has 16 tickers on the list. ASML, Berkshire, Citycat, GEG, Veronova, JP Morgan, Clack, LRCX, MW, Novartis, SAND, SanDisk, STX, TSM, and WDC. JP
[12:55] Morgan's on that list. It is a nicel looking stock. If you pulled up the JP draw a straight line across at the number 320, you would see that likewise a 50-day moving average is currently sitting at 3192.
[13:08] Uh that 320 number is basically the high that you have from April 21st. a 50-day moving average, we're now in this zone where the stock's facing a an interesting place to look for long deltas for a swing back into new highs
[13:24] this is the place where the trend should hold. So my I already have a city trade looking to fade this move in JP Morgan. Looking the 315 310 short put spread right now sitting at 38 days to expiration. Um I'd like to see a little
[13:39] bit more downward drift right now because this position it is a 68% I'd like to have my short strike below my 50-day moving average. But right now it's offering worse than a 4 to1 risk-to-reward. 407 risk to make $93 and
[13:52] only generating 89 cents of theta on a daily basis. So, while I could pull because they're five points wide and get that more favorable risk-to-reward I want, I'd prefer to see if this market settles in before getting in too early
[14:06] draw down. Having just done through that through crude, by the way, for the past month and a half [laughter] and I can't believe I unloaded all with you. I'm laughing with you. >> I know. I know. I can't believe I
[14:19] last two days at a profit [laughter] considering they were all max loss 10 days ago. So, but I I don't want to like I have a little bit of that scar tissue want to be biased and emotional about things, but 315, 320, 310, 315. We'll
[14:34] my shopping list this morning. >> I actually completely agree with you. the last couple of days about banks and I was looking forward to seeing if the earnings. Even if they did everything right, I want to get short deltas in
[14:48] here. I feel like this is an area to pay attention to going forward, especially right now, but let's be honest, the seem. And I feel like at some point there's going to be some rotation in the
[15:01] consumer defensive. I want to get a little bit exposure in financials. And puts or short put spreads. >> Yeah, I think uh these markets are have been ripping higher and then kind of uh fizzing fizzling out. though this
[15:17] morning got fortunate 1 minute prior to the CPI got the Super Bowl on got the rip and then it closed it uh and we've sold off 10 points since then. So maybe maybe this is kind of a fake out day where the markets meet the banks sell
[15:32] off because right now the banks are most of them are down with the E- Minis up. Uh but going back to crude oil, it's been a crazy market. Three times in a been a crazy market. Three times in a row, I've had uh a position in here
[15:45] where I was expecting to see a profit and I saw an exttrinsic value marked loss because I had this uh 76 straddle. I moved it up from a 76 to a 78 straddle yesterday and did that for like a 40cent credit. But either way, it's been a
[15:59] moving closer to my strikes, but exttrinsic value has been expanding way more to and it's been completely offsetting my delta. So, uh, I have a offsetting my delta. So, uh, I have a $300 marked loss right now, but I have a
[16:13] $300 marked loss right now, but I have a 78 straddle with, uh, $1,000 in premium 78 straddle with, uh, $1,000 in premium collected. You look at MCL. So, it's collected. You look at MCL. So, it's crazy. It's just nuts. Crude has been
[16:26] I mean, I I'm looking at this tape here today, guys. We talked about like 3% higher. >> Yeah. has learned its lesson, so to speak. boy who cried wolf in a certain way where
[16:39] just because we have war headlines or a little bit of tit for tat doesn't mean fighting, right? >> Y years ago and now the market treats it's just like, you know, it's like the
[16:51] weather. Oh, it's sunny today and Russia, Ukraine are at war. So, implications here for what's happening. But unless we go out into an allout war, I mean, what is the incentive? I'm just a
[17:04] psychology here. In March, you could play up the out of the money calls in oil thinking this thing was going to get worse. How do you how do you justify taking an aggressive oil long delta position right now and not feel
[17:18] incentivized to fade this thing given the given the reasons why we got here? the given the reasons why we got here? >> Um I think you justify it by making it uh risk defined. And basically I'm I'm talking my book here cuz yesterday I
[17:30] just finally decided to get back in. I didn't I wasn't interested in getting into oil when it was you know back below 60s. It just seemed like it was a done trade. Matter of fact, we're really talking about it. I mean, I was trying
[17:42] to get long oil um at the beginning of last month in June as it was sliding from 90 and I was like long couple call spreads and by the time after about a few days it was clear it was this was heading lower. So, I got out you know
[17:55] for a lossish or whatever whenever it was. It wasn't a whole it wasn't that much of a loss and proceed to watch the the the crude oil futures fall to the 60s whatever. I decided to get back in just yesterday after two strong days of
[18:08] this is why I don't follow the headlines. I just pay attention to the me it could it was at least going to 80 and maybe higher. And so as a result I decided to put on a call spread yesterday in CL. I did the 70 in uh the
[18:23] July 24th expiration, just a 10day cycle, 7880 call spread. And then I also cycle, 7880 call spread. And then I also did a uh MCL spread, buying one to sell two upside. Uh buying the 80 to sell two of the 87. So um we'll see which one of
[18:39] on the second one. That's the one that if we fade, I make, you know, money on just have to cut my losses at some point if we don't get this follow-through through the 80 strike. Yeah, I mean I have my my game plan here
[18:53] for crude is uh if we you know it's a pretty clean head and shoulders pattern neckline that we had where we're bouncing around in May and then you know we'll call it 830 bucks or so. So another $2.50 from here. Short iron
[19:07] condor has got to be a ripe ripe ripe ripe ripe ripe trade. Uh I was just those are the strikes. You're going north of 100. You're going south of 67. You're still going to get like a risking three to make two kind of trade setup
[19:19] fairly elevated. So yeah, IVR is low, but if you go over into the trade tab, is still in the mid-40s. That's a lot better than some of the single stock names that we're seeing right now. Um, but in any event, the CPI today, right,
[19:32] great news for the market temporarily. We're not going to get a hike in July. Fantastic. But Worsh is speaking later today. Okay, Kevin Worsh, the new Fed semiannual testimony in front of Congress uh today and tomorrow. Starts
[19:45] 10 a.m. Eastern, 9 Central time. This is another one of those catalysts where we have to pay attention to intraday inputs for moving the yields, right? And if we saw yields, if we see yields go haywire, then chances are the equity markets are
[19:57] as well. The 10 years, the 30 years, the two years, yields all dropped this Now, as those yields have come back up in the past 30 minutes, stocks are falling off a touch. So, that to me is the whole game today. We got the CPI.
[20:10] the markets. Now the conditions are set for wars to remind everyone that they're not in a rush to hike rates, which conversely, guys, the Fed doesn't want means we're going to get more inflation and growth, and that means yields are
[20:24] what I'll be watching for this morning. Will the 2-year yield go up while wars speaks? That's all I need to know. >> Couldn't agree more. And uh I will be watching how long it takes for that uh
[20:36] beautiful head of hair to go fully gray on Worsh because it's only a matter of >> [laughter] >> Yeah, you it's probably going to happen the house unless you get it under control soon.
[20:48] >> I do [laughter] like I do like the dragonfly uh the dragonfly strategy. It's quite it's quite big brain 200 IQ play. environment? We can just hire people for this. We have goons to do these things.
[21:01] >> Dragonflies. >> We will uh see you a little bit later. And yeah, I think right now we're going to check out crude oil. Maybe throw on backwardation in here has steepened quite a bit. We had uh a nice kind of a
[21:15] signal for lack of better words yesterday when we looked at MCL. Uh we yesterday when we looked at MCL. Uh we had 74 74 74 74. It was just a flat 74 backwardation across many expirations and then the back months tapered off to
[21:28] 70. And now you're seeing that backwardation steepen in the near-term backwardation steepen in the near-term cycle. You've got 80, 79, 78, 76, 75. So war. Of course, you'll see a steeper backwardation in the near-term cycles
[21:42] relative to uh back month cycles, but I think the for us when we saw it was 74 across the board and then it slowly tapered off, it's it shows us that the market is pricing in higher prices for longer uh at least for this year. So,
[21:57] continue to trade this thing and it'll give us two-sided action uh for sure. give us two-sided action uh for sure. But the crude oil markets, I think if you were to look at uh first of all, the implied volatility increase over the
[22:11] last 5 days has been astronomical, up 33%. Uh I would just go to the 34day if you want to stay in this uh 796 contract. This contract is going to fall off in two days, so I wouldn't trade the Q. I'd just go to the U. Uh but I just
[22:26] go to the August 17th monthly. And uh the nice thing is you can get pretty far out of here uh out of the money. And if we do like a half point wide 70 cents we do like a half point wide 70 cents for 430 at 95 955 and then you go down
[22:42] I don't know 70 >> it it is a trip to see how much uh that's changed over the last couple of >> Yeah. 24 hours ago when you were looking at the term structure it was um I feel
[22:58] at the term structure it was um I feel like uh 73 in the front and maybe you like uh 73 in the front and maybe you know 72 for the next month and then were talking about how it was very different from
[23:12] 6 months ago but also still starting to see something change once again because when it was in the 60s. So, you're seeing basically what this is showing you is that when oil gets to 80, something is materially changing. Um,
[23:25] something is materially changing. Um, it's possibly about to make a stronger way that the different futures are starting to widen out, if you will. And, that more than the headlines. Look, man, I can't make heads or tails of the
[23:40] yesterday it was like the the US is going to take control of the straight. don't know anymore. I mean, I can't tell. I mean that. Seriously. And um you
[23:52] different agreement. The agreement has ceasefire is off. I can't keep track of that. But I can keep track of the the move in crude. And I know if the move gets above 80, I know all of a sudden
[24:04] about to make a strong move higher. It's hanging around here now. Um but of going to come out and we might see a release in pressure in in this in the price once again. So, I think you just got to structure your trades um
[24:19] accordingly, knowing that there could be a possible 5% move in either direction. That's why I chose to go with the trades that I did yesterday. I paid $600 in premium to potentially make 1300. If it doesn't work out well, I'm down 300.
[24:33] I'll cut it. I'll cut my losses on that. And if it if oil does pull back, then is probably making money and I could potentially close that and move on. Love it. Yeah, lots of lots of opportunity when these markets are flipping around
[24:48] like this. Um, so just got to stay stay active and stay engaged. U, but yeah, I >> can I talk about gold, too? I'm I'm really pissed about gold. I I didn't put I was really greedy yesterday. I I was gold was down below 4,000 at least in
[25:02] know, these these are real things that traders think about. Yesterday when I looked at gold, it was down below 4,000. I started looking at buying um the uh MGC contract, but it was uh the Q contract. And if you look at the
[25:16] options, the Q expires within 13 days. Now, I I really want a little longer than 13 days on this trade if I'm going to buy the future. So then I could buy the um I could have bought the uh the next month, which would have been the uh
[25:29] the V contract, right? But it wasn't below 4,000. And so the reason why that contract and do a similar trade like I did last time. buy the future contract and then sell a call spread further upside. That didn't work for me with the
[25:41] the 13-day options. I didn't want to do that. I wanted to do it further out to get more premium on say a 4200 4220 call spread, which is essentially what I did last time. I bought below 4,000 on the future and sold a 4200 4220 call spread.
[25:55] That was a better trade for me. I didn't want to do that with 13 days to go. So, where well, I was going to be patient. Well, it backfired now. back up a what it is. >> What are you going to do? You going to
[26:08] do? Yeah. I mean, I have a a GLD position that's a little bit longer term, a 380, 390 call diagonal spread. It's down a couple hundred bucks right now, but um the 380 is in September and the 390 is in August. So, I'm not too
[26:24] worried about it being so longterm and still pretty close to the price here. GLD is trading for five points higher, uh, six points higher, almost more than uh, six points higher, almost more than that, uh, pre-market here. So, we'll
[26:37] see. But yeah, I think that's the beauty of these markets. You can trade a number of different products, whether it's gold futures, micro gold, GLD, GDX, uh, and you can really fine-tune your your exposure here. Um, what do you think
[26:52] this this market in the E- Minis is going to do today? Do you think we fade mean we already are. >> We kind of have. I know. It kind of questions for us, uh please put them in the chat. We'll get to them as as soon
[27:05] any one times at any one of these times throughout the show. We definitely want to answer some of your questions. What do I think about here? I think I think I'm annoyed that I didn't get off my super bear earlier. I I didn't and I
[27:20] it wasn't lining up right and I didn't want to just completely throw it on without it making sense. That said, um I don't know. I think we got a full day in the morning like that and all of a sudden we're kind of fading. We'll see.
[27:35] now. I feel like >> should we put on a super bear? >> I want to do it here though. See, I'm Dude, I'm so like elitist now. Like I We probably should. Something around 7500. Where are we actually trading
[27:49] right now? We're trading 7535. >> My theory for the most part, my my my my style has been more like I have a lot of I have things that I think work I my book works very well if we go up to half
[28:04] a percent to a percent. So I don't mind putting on super bears and even losing that money because it completely gets the the loss of that usually gets eradicated via the other things that I'm making money on. But like I don't know.
[28:18] making money on. But like I don't know. >> I'm going to put this on uh 7575 7580 >> I'm going to put this on uh 7575 7580 and then a 74757470 long put spread. So long put spread and a short call spread for 50 cents. So
[28:30] this is a super bare uh cuz I think the rip higher we already we were already uh down before the CPI. Then the CPI comes out we rip higher 35 points and we faded from there immediately. >> And the Dow is down, banks are down. I
[28:45] think it could be an interesting scenario where we get a a complete fade, maybe back to red here. Uh but if not, if we just chop around here between 17 and 30 points, this will still be a 50-cent winner. But uh I'm going to see
[28:58] >> You know what I'm going to do? Okay, for that I'm going to do I'm going to do the short call spread of my gold trade. I'm going to go out on a a whim here. I'm going to do that short call spread thinking that as a result you're talking
[29:11] about everything fading that gold is going to fade back down below and I'll want. >> Okay, that's the hope. That's the That's the play. I like it. Well, as Jamal said, join us on the YouTube channel. Uh
[29:24] throwing your trade ideas and questions along that right hand side chat. We'll so. But yeah, we're going to take a quick 90 second break. You're watching quick 90 second break. You're watching Tasty Live.
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[32:26] show. My name is Mike. I'm here with Jamal and we are about to answer your trade ideas and questions. Check them out. Uh join us on the YouTube channel. channel. Throw them along the righthand side chat and we will check them out
[32:39] right now. But uh yeah, this morning's been wild. We got the CPI at 7:30. The markets ripped up 40 points from being down five to up 35 and we've slowly faded from there. Uh the banks are down, a lot of them are down after reporting
[32:53] earnings. A lot of them crush earnings, but sometimes it doesn't really matter. stock market's still going to rip those things lower. So, uh we'll see how the rest of the market plays out today. But crude oil is another story. Crude oil is
[33:08] up uh significantly. The backwardation is right back into those markets. Uh flat backwardation of four points across multiple expiration cycles or contract
[33:20] cycles. And now you've got the near-term at at 80. Then it goes down to 79, 78, 76, uh all the way down to the the low 70s. U but I think the interest rate 70s. U but I think the interest rate decision flip is really interesting. Uh
[33:33] I've got the CME Fed watch tool pulled up here and just looking at the the compare tab along the left side you can see the July expiration uh or the July decision I should say has been tapering off tapering off tapering
[33:47] off. The way to look at this is the lighter shade is a month ago as you get then the current. So clearly the probabilities were sliding into a rate probabilities were sliding into a rate hike of to 37540 and then this morning
[34:01] just immediately flipped on its head. We're right back to where we started a month ago. Um so it's going to be interesting to see. We're we're still pricing in a rate hike at some point, but it's not going to be in July.
[34:13] >> It would seem that way. Um it's it's and and I think some of it has to do with um just how much the landscape has changed, right? like uh it's um well a lot of the reason why that we saw interest rates go higher was because of the war and
[34:28] because of oil and because of how much that's changed and and uh then that going to end up being fine. But all of a sudden now you got this situation literally changing right as we speak. And so you're starting to wonder um if
[34:42] Are we going to continue to see these pops in oil that's going to lead to higher prices? [clears throat] Excuse me. that consumers are paying or is this and we're going to have to just kind of ignore it. It's kind of hard to tell. Um
[34:56] so I think that's that's been the the big dance that's been going on here with inflation. >> Yeah. Uh but while we let these things play out, we have been pretty active. Uh got into a Super Bowl 10-cent credit
[35:09] 15-point wide call spread right after the CPI hit. Uh that jumped up 500 bucks, closed it immediately. And that seems to be a good decision with us down 15 points from where that was. You got into a gold short call spread 4200 4225
[35:25] out in August. And then [clears throat] uh I got into a And then [clears throat] uh I got into a CL iron condor 70 69 half 95 95 half uh collected 200 bucks risking 300. So kind of a kind of a similar scenario to what
[35:39] sell an iron condor. But this is just a straight up implied volatility play. But upside than the downside here. Nine points and change to the downside. Uh
[35:51] getting a lot of call skew infused into there. So we'll see how that market plays out. >> And just got filled on a super bare here. 75757580 short call spread and to buy a 7475 7470
[36:05] put spread for a 50cent credit. So if we fade from up 19 back to flat, this will be a nice winner. I'll just take it off. So, just to illustrate what I was kind of getting at, um, if we got this graphic here, and it's, um, we also got
[36:18] some questions to get to right after this, but again, um, we see inflation, you know, popped up. This is the number this morning, 3 and a half%, but um, a lot of this has uh, it's it's it's pulled back, but it's it's because the
[36:32] month and oil was lower. Oil was$60 something dollars, right? And so you see this turn, but what is this going to look like in a month? Especially if we look like in a month? Especially if we go too high, right, on oil. What is this
[36:45] going to look like next month? Is it going to be back at four? 50-gallon drum with gas. >> I mean, I thought about it. I'm not >> Those Costco prices aren't getting any lower.
[36:57] weekend. The gas was uh that's where the games were when I was my kid was playing bit cheaper. U nevertheless, we do have a couple of questions here. Um, somebody's asking about uh, Service Now, NOW. What would what do we think about
[37:10] NOW. What would what do we think about it? I know I got thoughts, but uh, you you go first. Uh, I haven't traded this thing really Uh, I haven't traded this thing really uh, all too often, but yeah, I think
[37:23] uh, all too often, but yeah, I think regardless of the product at hand, I going on, what's on deck. We got earnings on deck July 22nd. So, uh, that eliminates any neutral strategies for me until earnings because I don't like
[37:37] a product that is going to hold on to exttrinsic value until they have an an earnings announcement. With that said, this earnings implied volatility, if you isolate the 10day for July 22nd, has a 15 point implied move. That's a big
[37:52] implied move relative to $111 stock. It's down 10 points premarket. So, uh, I would say if you're bullish on Service Now, you're getting a 10point discount, 10% discount right now, and you have the ability to construct something here
[38:07] where maybe you buy something in September, August, you sell the 3-day with the intention of rolling it, that short option from the 3-day to the Like, you could do a lot of different things, but yeah, I would just I
[38:20] you're doing a neutral iron condor for earnings, in which case I would wait till July 22nd. So for me and and like that's that's the which Mike has given you which is fantastic. For me it's a little deeper
[38:35] fantastic. For me it's a little deeper in that I am in these service names. So I have Microsoft, I have CRM, I have Palunteer, I have long Super Bowls in those and then I've also got short calls in SNO
[38:48] and um and Adobe. And so that's kind of my complex I got going on with those those situations. So again, this is one of those names in the service sector. pretty sure partly because of I IBM being down today that's gotten rocked.
[39:02] a bad day for the service names probably. That's going to suck. But calls on some of those names. So I think you got to think about it in terms of the service sector and what's going on. Um if you're going to put something I
[39:15] mean I don't know what to tell you. You gota you got to make your own bed here. I've made my own bed. I'm long some of them that I think are going to survive this bout of selling and um I got a couple of shorts on others, but um I
[39:28] of the whole group, not just the individual name right now because going to be a bad day for service. >> Yeah, just looking at Microsoft as one >> Yeah, just looking at Microsoft as one of those those uh mag seven leaders down
[39:40] 10 points premarket and it's had a pretty good run up from uh 350 all the way up to 390, but we're going to be right back at 380 and uh chopping around reason to throw on maybe the super bear or some kind of bullish hedge is
[39:53] everything is telling us that the E- Minis will probably sell off here with the banks and softs uh selling off here. >> But we're going to take a quick break. throwing in those questions in the YouTube chat. Uh we're going to bring on
[40:07] Liz just on the other side of this break.
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[42:11] show. My name is Mike. I'm here with Jamal and uh we got about 17 minutes until the equity market opens, but we've already had plenty of activity here. We got to bring on Liz Dear King and get her take on the early morning moves.
[42:25] >> Good morning, boys. Anything going on? I mean, any reports, any moves in the >> Yeah, >> it's been so fun already today. I need smiles on both your faces, but I would kick you both in the shins for shorting
[42:38] >> I did. I shorted. >> Both of you shorted gold today. Shame. [laughter] from? >> Well, actually, oh, that's from Game of >> Yes. Thank you. >> I I'm actually still long gold. I have a
[42:52] call diagonal spread, but I did short the market in general with a super bear. >> I I was watching was watching, Mike. Always watching. forgot the CPI was at 7:30. I was like, "Oh, maybe this looks like a Super Bowl.
[43:07] >> You DID THAT ON ACCIDENT." >> I did. I got filled a minute before the CPI hit and then [laughter] it jumped up 40 points. I was like, "Oh, maybe I should take this off." >> It was a fun morning. [laughter]
[43:19] smart. >> Speaking of, it's probably a good time to queue up uh a question that we got from the chat here um about uh placing S&P trades before the [laughter] open. Why would you place S&P 500x trades now
[43:33] and not during trading hours especially if prices usually are wide with and uh that's something else but oh yeah it goes on what do you what do you give you >> to answer >> you know why because you can because you
[43:48] can so I agree prices are wide but in that in the pre-market I let it come to me so I decide what I'm doing I set my price and I typically will need a movement in one direction or the other they are a little bit wide pick your
[44:01] pick your spot and put it in because you can. It's really fun to trade them [clears throat] non non in the in the pre-market hours just like Mike did right before the CPI. That was not attainable to us two months ago. We
[44:16] and SPX two months ago. You had to use the E- mini S&P futures. And I prefer the S&P because you can kind of let it sit. You can let it settle and you can let it go. That's why I like the S&P.
[44:29] But I do like trading them premarket. I have a certain trade that I place every >> Yeah. And I think uh just bringing it one one step further, I think if it's you can't trade futures or you're not approved to trade futures or you know
[44:44] whatnot. Now you can get that pre-market action with S&P uh because it's a totally different trading instrument. So >> yeah. Um and we're there's always stuff that happens pre-market like the CPI that just hit. Sometimes it's a nothing
[44:58] burger, but like that was a 40point rally in five seconds. Like it's you can have these things on and express your directional assumption or neutral assumption. Uh right now neutral is working too. So yeah, I think it's it's
[45:11] >> Well, let me ask you this too. It is a little bit illquid and I do appreciate going to say. I mean look at it's 10 cents wide. It's really not >> it's really earlier in the morning it is a little wider. I will tell you that
[45:23] frothing at the open right now. So, but earlier in the morning it is a little bit wider, but that's okay. These are It's a It's a $7,000 product. Pick your pick your price point. But you can I've noticed sometimes if you get the move
[45:37] >> Yeah. Yeah. >> Yeah. Yeah. I just I was telling I'm to me. I mean, like you said, it's a $7,000 product. This looks like part for we see during the regular trading day for S&P. Honestly, I wouldn't consider
[45:53] this wide. I I would I the only thing I would say is um is uh again I think you got to be careful of where you're trading. Don't just look at the numbers You got to pay attention to where at the money is. You got to find that
[46:08] decisions. That's that's the thing that I think is tricky that a lot of people probably aren't paying attention to quickly. and making sure that you uh trade your your ch make sure your time um that you're putting in the trade your
[46:22] trade session is market hours sorry uh 24 hours because again a lot of times we're so quick to cue stuff up I've done this I know you did it too we got to make sure that you put that 24 hours in so you got to do those trade checks real
[46:34] quick before you do the trade but other than that you you guys said it perfectly like it's a it's a proximity thing it's a time thing and it's it's to be able to on a day like this where we got banks moving. We got CPI coming in. We already
[46:47] got a nice little move. We also have another S&P 500X question while we're >> And and and Jamal, I want I want to put another another thing in here, too. This for somebody like me to be able to trade early. And I do keep an eye on where the
[47:00] traders are picking their points in the morning before the pre-market, too. I can look at that on the SIBO or you can look at volume in there. But we you got to remember too these earnings earnings season is on deck and S&P trades until 4
[47:14] PM. So keep that in mind, right? So you have the ability to have something come out. I know Apple's after 4, but these big flyers that have huge volume in these indices, let's say like uh Nvidia is going to have earnings. It's going to
[47:29] move the market, but you can have options that trade until 4:00 now. >> Yeah. And I think keep that in mind. >> I think there's a big big big deal. Yeah, it's great. And there's there's something to be said about a 20-cent
[47:42] wide bid ass spread in SPX and a 20-cent wide bid ass spread in an equity that's lower price [clears throat] equity. Like SPX, it has so much activity. Like the worried about. To Liz's point, you just got to pick your price and let it go and
[47:57] don't, it's probably because the market moved against you uh or for for you in that sense in terms of getting filled on the price you want. But yeah, the the liquidity is not an issue in SPX. It's one of the most liquid assets uh in the
[48:11] world. So, uh just keep that in mind. >> Uh we got another question. Let's cue that up. >> What are the closing differences between SPX and ES? What happens if you have a spread that is in the money and S&P at
[48:25] closing? What happens with ES? Why do you force closing of ES >> Well, what this is pretty simple. So, SPX is cash. ES is futures. They settle to futures. So if you have a single in the money option in S&P it's the cash
[48:40] whatever money you're down you look at the print in ES if you have a single in the money option that settles to futures you can be the proud owner or proud short a future so that's why I like sp cuz I like a cash settled my two I said
[48:53] lost their mind two favorite words in the English language are cash settled probably loved it >> because no Kathy Kathy Clay the the CEO ever and they posted it everywhere. >> Yeah. Yeah. No, I know. Trust me. No,
[49:08] they are. Are you kidding me? They they love that part. I mean, I spent three years there talking about cash settled stuff. That's the They love that. Of >> And actually, that's one of the reasons why, like I was telling Mike, like
[49:21] so I was looking to get off a super bear, which bear, which >> I did not [clears throat] this morning. >> Um but uh I'm sorry. But a lot of times
[49:34] it on. Like I'm not I'm not worried about it because if it's going in my probably winning on something else anyway. I've already built that in whatever the loss or the win is going to be. So, because it's cash settle, I
[49:47] manage that often. You guys manage them a lot more than I do. I I really don't most of the times if I do um because I put them on for a specific reason. Look, you, it's like a soldier that I send off to war, okay? and it's just going to
[50:01] have a it's going to be a casualty of war. I'm going to win the war. It's just know that's kind of deep, but I'm just telling you that's how I think about it. >> I like No, I like the way to look at that, Jamal. And like I said, I trade so
[50:13] when I'm with my kids or I'm teaching them about SPX, the cash settleness makes it a lot easier to let it just go. Let it go. Like you said, this is you Keep it keep lather, rinse, repeat. You keep doing it and eventually you will
[50:28] eventually the numbers work out. So that that's not a bad mentality with it. That like that with them than I do in my own account because this the bigger the size >> I know. I love that. I love that you do that. I'm the same way with it. Like I
[50:42] got a couple of different accounts and I I it's like you put on different hats as Okay. What's going on here? How am I thinking? What am I looking at? >> Yeah. I was I was joking with Glenn the other day. I was like when when do I
[50:55] Glenn, [laughter] Microsoft's at 350. Just go ahead and, you know, buy some leap options and then >> change your password, but send it to >> Yeah. [laughter] >> He can has full access to your account.
[51:09] can't stop yourself out. You can't Your heads are tied. Then you just let it go. attack, man. Or Microsoft and Palunteer position. This guy, this guy, was that have been him sending service now. He's looking at he's super interested in
[51:24] these software names. [laughter] >> Well, what about is he okay? Was he in somewhere? No, >> he's okay. Okay, good. >> I don't think he was in IBM because Mike and I have never talked about IBM.
[51:36] [laughter] >> Oh, so you guys take him down. Okay, I >> We just he sees it and he sees the opportunity. We don't It's It Look, it's just like we talk to people all the time in the chat. We don't tell you to follow
[51:49] decisions. But we can't help it if half of the stuff that we put on are talking about makes sense. We can't help that. >> Yeah. Yeah. >> Real quick, the just to really make it super clear. So SPX and the e- minis and
[52:03] the micro e- minis, they're all cash settled, but there is no underlying asset for SPX. So the zero day, the one day, the 2-day, whatever expiration financial transaction at at the expiration of your contract. But the e-
[52:17] minis and the micro e- minis there are contracts that settle to this. So yes, even though the option itself like a zero day, 1 day, two day, 3-day, these will if it's in the money, it will turn into the E- mini U6 contract, but then
[52:31] >> Yes. >> So that's the the differentiation there is everything's cash settled eventually, but S&P is immediately cash settled. the micro e- minis and the e- mini futures will settle to the contract itself and
[52:47] >> Yes. >> Which means you have to watch your cash that means and you want to be long or short that if you are long or short that >> Yes. >> Than if you were if you had a defined
[53:00] middle. >> Yeah. Yeah. And this is the main reason why we're using the options on the SPX because of that cash settlement right away. Like it doesn't settle to anything. So, it's it is what it is.
[53:12] >> Settles to cash. >> Yep. There. I mean, it there I I really do like the cash settled. Uh and you know what's crazy, too? I know I'm going Wait, do you have somebody from the um trade desk coming on later?
[53:26] >> Yes. >> Yes. Right. Okay. So, um we've I've gone had a tanker of natural gas delivered to my house. So, I'm pretty safe to say cuz I trade natural gas options so much and I've never taken delivery, so I'm safe
[53:40] here. Um, those also those options, that's why I leave those till the bitter The natural gas options, you never take the future. Yeah. And that's another that's another great point. If you're trading zero day stuff, uh, and let's
[53:55] and out of the money, in the money, out of the money. The beautiful thing of SPX is that it aligns with the brokerage firm's risk profile, too. Like if you have a ton of contracts on and you're at you're at whatever broker, if you have a
[54:11] ton of contracts on in like Tesla and you've got a hundred contracts on for move in the money or out of the money and the brokerage the brokerage risk capital to hold the shares, whether they're long or short, you can get
[54:25] stopped out before 3:00 where S&P because it's it's immediately cash settled. That's another reason why those trades can be more beneficial because you can hold that all the way through expiration. It can it can expire in
[54:39] to where in any other product you would have acquired shares. In SPX, it's still a cash sell transaction. So there's nothing to worry about in terms of settlement risk, expiration risk with SPX in terms of acquiring something else
[54:53] after the fact. >> And Mike, that is why you are you need you explain things. You're very good at articulating it. Like I said, I just [clears throat] just it just you just get the cash or you don't. But Mike, you
[55:08] very very well said. Very well said. >> Thank you. Uh we got about five four minutes exactly until the market opens the equity market. Uh eminis are trying to rebound from the recent selloff. If we look at a one minute chart and here's
[55:23] your 7:30 smash and we've tapered off ever since then. Uh, but we've been chopping around this like five point wide range ever since. Where do you think we go from here? >> Um,
[55:35] what is what? Let me see your Can I see your fancy Vic chart? Fancy Vic chart. >> Oh, by the way, I talked to the the product team. I'm We might have a little something going on there to add this, but no promises.
[55:47] >> No, you if you you have to say it you say it on air three times, it happens. [laughter] >> Yeah. Yeah, I mean we're still in a pretty steep contango here. Uh the opposite of what's happening in the the
[55:59] crude oil markets, but yeah, VIX futures still in contango and the VIX is at 16. >> at 16. Okay, given all the volatility information, my prediction for today is
[56:11] we are going to I'm giving it in spo. We're going to close up 47. We're going to go up 20 points from here. >> I hope you're right. That [laughter] >> That's definitely fair. I mean, look, we've been dancing around 7,600. We did
[56:24] it all day yesterday until we fell. Um, I think it's it's it's definitely I give me the opportunity to get on the super bear that I want, but it's >> I think what just happened. I mean, I love that you have this up. We got what?
[56:39] a little exciting and then you're like, "Whoa, whoa, whoa. We're not supposed to fade. >> Yeah. Yeah. But markets move. I mean, kind of. I I I feel like I'm all over the place with you guys today, but it's
[56:51] kind of like look at all the banks. They all all the banks outperformed all of them. Every single one you get the news, it's like we killed it. We killed it. We >> Yeah. >> It's insane. It's the market is
[57:03] wants to do. >> Yeah. And that's why I think I think whether we're up or down. uh just because it seems like we're getting a little conflicting info with the E- Minis and NASDAQ up, the banks down
[57:17] after posting good numbers. The software stocks down uh Service Now, Microsoft, like there's there's things that are pulling and pushing in opposite just results in not much. >> That's a great point. This is definitely
[57:31] going to be a day to watch the heat map to see what kind of rotation happens. make fun of you real quick. You're all over the place today. I had in my mind >> you read your kids bedtime stories just like this. Good night moon. Good night
[57:45] Don't tell me you >> I do. To my defense and I feel like I have to say this to the chat. I was born this way. Fast and loud and use my hands. And everyone my entire life told me to slow down.
[57:58] >> And once I walked down that trading floor I was like I have met my match. There wasn't anybody I couldn't beat in the speed department. And it stayed with it. >> Yeah, that's why 14 years 15 years down
[58:12] there, I was taller than them, faster than them and louder than them. So, it worked. It was the trifecta. [laughter] >> So, yeah, we got a bunch of things here. We got the IBM making a move so far um to the downside, which is going to drag
[58:24] software, and that's going to be great. We got um I mean already it's it's another one of those days. SMH is up 4%. We got software down 3%. And so if you just look at SMH and versus IGV, that's
[58:37] already. That's been the same push and pull we've seen every single day though. different. When semis are up, the software is down, vice versa. Uh the only question is whether or not uh the consumer staples, the Walmarts of the
[58:51] world will be down. My guess is they are it'll be fascinating to see if that reverses at some point today. But this is going to be the thing. I'm going to the thing that eventually when we have a day where they're both down, watch out.
[59:05] >> Watch out. >> Yeah. Um before the market, before the collectively, the three of us? What are we doing in IBM? >> Great question. >> I want to maybe sell a put in there, but
[59:20] I'm not in a rush. Let me just say [laughter] I'm not in a rush. But >> look at that drop. >> They just And again, this is a pre-announcement. They have earnings on
[59:34] Apparently, they said things aren't going to go well. I haven't had a chance said, but clearly they said things aren't going to go well in the software space cuz again, they're not the only ones that are down. A lot of the group
[59:47] >> Um, >> yeah. >> So, Microsoft is getting smoked. CRM, it's the same playbook. It's just there's a catalyst this time. CRM.
[01:00:00] I look at this. >> They were up yesterday. IBM didn't even down today anyway. [laughter] >> Yeah. earnings is going to be great for them now? They It's out. Everything is we we
[01:00:13] are going to be amazing. >> What Liz is saying is a great point. A pre-announce and they'll say all the bad stuff just to get it out the way before >> and then you know they might bounce back which Allah why I'm thinking about
[01:00:26] >> Yeah. >> Yeah. And I think I think even in the three-day put with the intention of rolling to the 10day like look at the premium here. If you had a let's just say like a two a 200 put here collect
[01:00:41] gives you another 20 points of wiggle room to the downside. But if you do get tested, you can immediately move that 3-day into the 10day into the earning cycle and pick up another dollar for that 200. Actually, well over another
[01:00:55] markets get more liquid here. >> Yeah, usually I was me. I ran front ran >> I'm [laughter] about to sell one. >> Yeah, to be much lower, but right now we're at >> I mean, we're basically at the lows that
[01:01:10] >> It's crazy. >> Yeah, we're basically right there. I >> immediately at annual lows. >> Yeah, I mean, whatever. I'm I'm probably sell it for now. >> Yeah, just come on in. The water's fine.
[01:01:25] it. It's >> I'm actually going to sell September. >> Okay. >> I like Mike's I like Mike's idea of three days, then I'm going to roll, then I'm going to roll. I either get term. I
[01:01:38] like the juicier >> further out. Give it some time to think. Understand my way here, IBM. Understand that you're supposed to be higher. I >> If you look at the net change, if if you look at the same strike, the September
[01:01:51] yesterday. It's trading for $11 now. It's up $10 on this move. So, you can't reversal here, >> I sold the 210. Like we've said uh the
[01:02:03] pure implied volatility premium, it's it's in the 3-day and you have that uh ace in your in your sleeve to be able to roll it from the 3-day to the 10day. As as always, like if we have an earnings announcement, we like to straddle the
[01:02:17] expirations by if we're doing a a debit spread like a calendar or diagonal, put something before earnings with the intention to roll into earnings. You can intention to roll into earnings. You can aggressively reduce cost basis. Uh, and
[01:02:31] >> totally. I mean, you're absolutely right. I agree. case. That's why I'm not worried about earnings, which is why I'm going for high, but >> but you're you're right, too. I mean,
[01:02:44] >> I don't know why we always I mean, I guess >> Jamal, I was just saying that. Why is >> I'm not really sure cats. >> Yeah, I know, right? I mean, it's so
[01:02:57] mean. IBM plunge 23%. It's largest intraday drop since 1987. >> Yeah. >> So, I mean, like I said, I what I did is
[01:03:09] accounts, scanned through. I was like, I've got to have some IBM in here Because I have so many positions. I was like, okay, I'm out. I didn't have one >> Yeah, [clears throat] I feel fortunate. I have I'm a clean slate here, but I
[01:03:22] think we'll I think I'll throw something on for earnings. Uh, and I, it's These all lost. >> Oh, by the way, sorry I had to do this to you. Um, SK Highix has options started today.
[01:03:38] >> Yep. Yep. >> Five shiny liquidations. >> Probably not. >> No, not at all. too bad. >> It's not good. It's not good, but it's
[01:03:51] >> Yeah, I would I would give this a couple days. I mean, you can feel it in the room. Like, SK Hinx was not even close to the same level of hype as SpaceX. Um, and they don't have weekly expirations yet. So, that's my cue. Like, if there's
[01:04:06] it. >> August is 115 ball, 143 ball in the >> This thing is a sale. It's >> still tradable for sure. But, um, wait, the front. >> Let's look at implied ball. Just Just
[01:04:19] pull up change the tab to implied ball. You can see the actual implied ball. >> have to do it wide. >> That should shake out. I mean, at some
[01:04:33] point the market [clears throat] the markets need to become tighter for me to >> Yeah, you can wait on this one. >> Catching a little bit of a bid today. Yesterday was not not good. >> No, not at all. Yeah, these things need
[01:04:47] to be I can I can wait on this one. This 100 V ain't going nowhere [laughter] at all. I mean, again, this is going to have the similar volume as a lot of so this is not changing. It would be nice to sell something in here right
[01:04:59] nice to sell something in here right now, but it is a little wide. >> mean, but honestly, give it a couple days. I mean, I what's surprising to me first time we're looking at them. I mean, I think they're just going to get
[01:05:12] even a little bit tighter probably by tomorrow. The market makers, it's a product. you have to find your footing. So, yeah, so far semis are up. Uh Micron's up. Uh and again, yesterday I I
[01:05:26] Micron's up. Uh and again, yesterday I I did want to pull the old um call SanDisk and Micron, but they were way looking to get like a 100 points wide in and SanDisk and it was like $9. I don't
[01:05:39] premium for a couple of days. Maybe if it was $600, maybe I'd be willing to, but almost $1,000 a little too much. But you just felt like they were going to bounce and sure enough they're bouncing today. SanDisk is up $120. Micron's up
[01:05:52] almost $50. I just got into an IBM trade. I bought I just got into an IBM trade. I bought the 250 call in August monthly and I sold the 3-day against it. >> Uh the total package was 600 bucks, but
[01:06:05] the same thing, same story applies. I did this in Costco earlier this year. uh the initial debit paid is not necessarily the true risk because I'm I'm going to roll it is the risk but I'm going to roll this 3-day 250 strike
[01:06:19] which is trading for.7 if I swap this and buy it back just to show you going from the 3-day to the 10day that same 250 strike is trading for $400. So >> at the very least if nothing else changes unless we sell off another 70
[01:06:33] points be which would be absolutely nuts. Um, this option is going to hold on to a couple hundred of premium. So, over the next 3 days, I'll be able to roll from 3-day to the 10day, pick up another three bucks and reduce that cost
[01:06:45] basis dramatically, and then have an earnings shot. Uh, right now, I have a pre-earning shot to the upside. But, I'll have an earnings shot to the upside So, >> I like the earning setup calendars.
[01:06:58] That's pretty cool because you do have that you do have that long built in. >> Yep. Well, Liz, we are gonna take a quick break here, but we'll see you a >> Thank you. You, too. >> You, too.
[01:07:11] >> Uh, yeah. Ein is chopping around up 12. NASDAQ up 280. The Dow and the Russell are chopping around flatish, but yeah, IBM is the big story in terms of the big mover right now. Massive move to the downside 24%. Uh, and crude oil still
[01:07:26] creeping up to the upside. Backwardation is back in this product. Uh, so we've got a little little tension in these markets, but still e- minis only 14 points really inside that expected move. We're going to take a quick 90 second
[01:07:40] break. You're watching Tasty Live. We'll see you on the other side.
[01:07:53] Taking off strategies, that's also pretty easy. What do you do with options crash course strategy series, we're going to show you how to handle to handle the losers. But most importantly, we're going to show you how
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[01:10:45] trade like a [music] trader? Tasty trade. show. Yini's caught a bid here just a little bit. Up 18. NASDAQ's up 280.
[01:11:01] The Dow ticked green. Very interesting. Uh Bitcoin and ETH catching a bit as well. But IBM down 70 points, almost 25%. Crazy gap down here. Uh they announced some pre-earning stuff. Maybe trying to
[01:11:15] soften the blow uh from a bigger move with that binary event. But we've got a very special guest on the line, Felix. How you doing this morning? guys. >> Absolutely. It's awesome, man. Hey, man.
[01:11:29] in the background? Is that like a Kandinsky or something? sorry about that. Um I I I paint it. It's very relaxing. >> So, what do you think? >> We've also got another special guest
[01:11:42] Come on, Winston. Sit [laughter] up. Sit up. Up. Up. Up. Come on. You're tired, >> Oh, no. Oh, no. You have to take my word for it. It's my golden retriever down >> It happens when we try to get socks to move up, too. Sometimes they just don't
[01:11:56] >> They don't, do they? >> What are you looking at this morning? really of the week is, and I've been watching this for some time, is it's a combination of the SpaceX bond, um AI debt generally, um the circular
[01:12:13] financing in AI, I think AB, IBM being down 20 odd% this morning, as you just mentioned, is kind of um the the the thing we were hoping wasn't going to happen this earning season, right? Um, so for me, look at SpaceX bond down
[01:12:27] almost 10% since it was issued and it's not like SK SpaceX has gone away or Elon's gone away or the rocket's gone away. And it shows you what the weeks back again yesterday. It's what Goldman Sachs put out internally
[01:12:42] yesterday that the banks are trying to yesterday that the banks are trying to offload AI related debt. And to me, that's something that worries me because every major crash we ever had, and I'm
[01:12:56] not a doom and gloomer. I'm just, you know, being realistic on risk here, was a debt problem. You know, 2008, you know, 1999, it was always a debt problem. And the bond markets typically are a little bit smarter than than us
[01:13:08] equity guys. So that's what I'm worried about. And if you then look a little deeper into the debt that these hyperscalers have been piling up, you know, the Microsofts, the Amazons, and so on, and where they've been putting
[01:13:21] that money, well, obviously into AI infrastructure, and then they're from this AI infrastructure. But how is that revenue being financed? Well, 50% of it, literally half of it, is being financed by the hyperscalers. So, it's a
[01:13:38] bit like me saying, "Hey, Mike, here is €50." Um, and then you say, "Okay, I'm you're going to give the €50 back to me because you want to use my software." And then I book €50 revenue gain and tell everybody how wonderful it is. And
[01:13:55] it isn't illegal. It's called vendor financing. But the scale of it, we have financing. But the scale of it, we have never ever seen before. And the concern is therefore well how much of this whole AI revenue is real right we had great
[01:14:10] AI revenue is real right we had great earnings in from TSM TSMC right um but isn't that money just borrowing that's being passed down
[01:14:22] >> yeah it it does seem like that Felix but at the same time you know um and and I'm you're right a lot of times it's usually bond too much bond issuance or maybe definitely argue about overleveraging and that's a combo for another time. But
[01:14:37] to this bond thing about AIS, I I was talking with Mike about this after the holiday was uh in in northern Wisconsin, which was not far from the Lake Michigan where I was, the town Shboen, and there was a huge data center, massive, so
[01:14:51] even remember the size of it. I want to say $600 billion data center. I'm not sure, but um which is probably too much, but it was it was just big. and you're seeing these these buildouts and you're seeing we we did a couple of months ago
[01:15:04] see all this passing of money between Oracle, between Nvidia and whatever. just buying time for these things to work? >> I think the technology works but you know the dot bubble was about the
[01:15:17] internet. The internet works, right? It's a brilliant thing. We had the railroad bubble a little bit longer away. The railroads worked. So it isn't about the technology not functioning. It's just about are we overleveraging
[01:15:30] and are we getting ourselves back into a position where you know something breaks capex goes a little bit down IBM hinting at something like that this morning where a little bit of the spending gets delayed or scaled down and then suddenly
[01:15:42] this you know circular house of cards doesn't look quite as wonderful as it expectations we've got up there they they're really high right like earnings have to come in perfect this season and we've had basically a market that's up
[01:15:56] how much this 18% or something and earnings are pretty much flat across the earnings are pretty much flat across the board. So, it's a small thing that could start to unwind this kind of perfection that the market's expecting. And what I
[01:16:10] see, you know, we've taught like 25,000 people or something how to manage their at all these portfolios, it's AI, it's AI, and it's AI. And it worries me much risk because a lot of this risk that I'm talking about here is already
[01:16:26] in your 401ks. It's in your pension funds. It's in your target date funds. Not because you want it to be. It just happens to be there. So people have happens to be there. So people have massive exposure to tech and AI. And I
[01:16:38] think people should look at their portfolios and maybe, you know, maybe think about buying some other stuff. >> Yeah, I think that's fair. And I I always look at it from the lens of uh
[01:16:50] capex. The bigger capex gets, the less runway you have. And to your point, like if there's a hiccup and you're spending all this money or you're borrowing money to get the uh capital to make these things happen and then there's a hiccup,
[01:17:05] now you're in a really tough spot. Like we always talk about trading small and giving yourself a lot of wiggle room to be wrong. like we have these year-long trades in micro minis and the NASDAQ futures, the micro futures where we're
[01:17:18] sized correctly to where we can we can absorb a 20 30 40% sell off and it's not going to really matter to the portfolio because we can absorb it. But if I were to lever up in the same way, it's it's no different than than borrowing to
[01:17:32] spend and you know create this facade of of income and revenue while I'm you know I'm creating debt on the other side. The more I do that, the less runway I have. So I think that's another really interesting angle and and you like the
[01:17:45] more you do that the less the less volatility you can absorb and for these companies it's a very fine line when everyone is invested in the same way. great point. Position sizing is the answer to it all. But you know you you
[01:18:00] long time and teaching people really really responsibly. Um, most people position far too large and most people, you know, have the S&P 500 in their portfolio, a NASDAQ index fund, and then they go and buy tech funds or tech
[01:18:14] futures or whatever it might be. So, they're kind of tripling their tech exposure, right? Rather than actually creating genuine diversification. You know, there there are other sectors out there, you know, whether it's insurance
[01:18:27] or, you know, whatever it might be. Pipelines have been good to us. There's actually make us money that isn't necessarily tech. And I think >> yeah, couldn't agree more. But yeah, diversification and trade size is the
[01:18:39] name of the game. Felix, appreciate your time. It was a great conversation. And I >> Keep painting. >> It could it could be an alternate day >> It could it could be an alternate day job, you know. [laughter]
[01:18:54] >> Good to meet you. >> Absolutely. We'll see you next time. E- >> Absolutely. We'll see you next time. E- Minis up 16. NASDAQ up 280. Uh it seems everything is green, interestingly enough. Crude oil's up, energyy's up, uh
[01:19:09] gold's up, silver's up, everything's up here except for Microsoft, IBM, some of the banks. So, seeing a weird divergence here. There's some strength that's kind of shrouding the weakness in the bank sector. But we're going to take a quick
[01:19:24] YouTube channel. throwing your trade ideas questions along the righthand side Well, you're watching Tasty Live. We'll see you soon.
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[01:20:41] >> All right, so I've got some good news and I've got some bad news. Let's get that bad news out of the way first. You are going to have some losing trades. Like every trade you place, despite your extreme optimism that it's going to work
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[01:22:41] the show. We've got a crazy market today. CPI hit, market ripped up 40 today. CPI hit, market ripped up 40 points. IBM open down 25%. Down 70 points right now almost. Uh we got Jamal in the house. We got E in the
[01:22:55] craziness this morning? >> Uh I didn't expect that kind of into this morning. To be honest, it's looking like it's trying to pull down the market a little bit, but CPI to come save the day. Uh what are your thoughts,
[01:23:08] pre-announced is interesting. I don't don't know if they said something specific to them or software. Yeah. Uh took it as a negative and they're all mostly down as of right now. Um so but
[01:23:24] Mike, I don't think they even had to have said anything negative. I mean software is down. That's pretty much what we've seen just about every other day. Semi's up, software down. Next day software up semi down. And so it just so
[01:23:39] happens the catalyst came along with it today. But >> Yeah. No, uh to the point that you made, the way that I kind of view a lot of the was just a scapegoat for what already was going to happen to the underlying.
[01:23:52] what they said, kind of pick that apart, but at the end of the day, it does seem however they however they were going to move anyways. But it is nice to see how information. And I think they did say something about software and logistics,
[01:24:07] actually want to read I'm I'm in the software names right now. I kind of I >> We don't we [laughter] don't most times people know we're options traders. Most times we don't really pay attention to the news. But in this case I want to
[01:24:20] know what they said because I got >> at this point including now that I've in the software space. Yeah. >> Oracle, IBM, Dell. No, I don't have >> Oracle, IBM, Dell. No, I don't have Dell. Oracle, IBM, CRM, Palunteer. Um,
[01:24:34] so I I got Snow, I got Adobe, I got I got a few now. So now I'm like I feel >> Yeah. What about you, Mike? What was your uh what was your reaction to this trading it right now? What's the deal? >> I immediately bought the dip [laughter]
[01:24:50] within seconds. Uh 8:41 a.m. 11 minutes [clears throat] later, I bought the dip. But uh yeah, Jamal and I posted a couple of trades to the follow page on Tasty August. >> Okay. sold that for 1,300 bucks. And uh
[01:25:05] that's got to be a nice winner, a small winner right now because we were down uh a little bit lower. But yeah, same story. I got a 250 calendar spread. So I bought August at the 250 strike and I sold the 3-day. So the nice thing about
[01:25:18] this setup is earnings are in July 22nd. So I knew I could sell the 3-day at move >> and reduce cost basis initially. I can in the earning cycle, get another 17 percentage points in implied volatility,
[01:25:33] plus another seven days, which results in a $300 or $400 credit. So, my initial debit of $600, I know I can reduce that by two three $400 depending on the situation. Uh, at the very least, as long as we kind of chop around here or
[01:25:48] more. But that's the trade calendar spread earnings. They issued a warning because of shift um in customer spending from software to AI hardware memory chips. So that's the
[01:26:00] software. >> Are they going to shift from that to AI? So clearly that's really why they're kind of moving around. but it's it's interesting it responded that way. I guess not for the long term.
[01:26:12] delta in there though. That's nice. I know we also got uh oil moving a little bit longer than I expected anticipated. We got another leg up. I think it was >> Last night. Yeah. You got out of the trade. No, I'm out of the I've been out
[01:26:25] took a little bit of a short position overnight. Uh put took some off into the highs just in case we made new highs overnight and I woke up, checked my I'm glad I put that stop in at break even. Um but I'm not going to be too in
[01:26:42] a hurry to short this these oil names. I remember back in 2020 2021 when it was like my first year trading with uh with Tasty uh with the oil names blew me out was going near negative. So you know how oil can operate. You know how volatile
[01:26:55] those positions can be and how quickly they can move definitely in play. Uh a risk management number one when trading these commodities like oil. Energy can >> So that's why like when you're trading oil that you have to understand the
[01:27:09] curve, the forward curve because the forward curve really tells you everything you need to know. Um we have steep backwardation again just like the war 7980 in the front >> and 70 in the back. So about a 9-point
[01:27:22] backradation at the at the most recent calm we had what like a two three point backwardation a pretty normal situation but a lot of these were had flattened out to basically almost contango. Okay. >> Uh now we have significant backradation
[01:27:36] >> Uh now we have significant backradation again. Yesterday we saw 74 74 74 74 and then it was down to the 70s. So we had a four point backwardation. So this is steepening in real time which is why implied volatility is expanding and uh
[01:27:49] when this is when this environment is here there's plenty of opportunity but fireworks with uh backwardation like this. these oil names and they wanted to check out this options chain to check if we
[01:28:01] have backwardation the larger the backwardation the more volatility you're >> Yeah 100% that's >> okay cool. Um, but like I said before, I >> okay cool. Um, but like I said before, I actually got into USO because USO is one
[01:28:14] of those products that will benefit from the backwardation. So when crude oil fat, I was like, I'm just going to get into this trade. Yeah, >> that was last week I got into this trade, the 110 130 call diagonal spread
[01:28:27] just cuz I'm like if oil prices creep up and it's because of something like this, we're also going to see backwardation get infused back into this market. Uh, and it's worked out so well. uh for now it's uh at 120 halfway between these
[01:28:39] strikes 300 bucks gain right now 50% of debit paid but this thing it was going to keep rising as long as we stay in backwardation you can see it here like we went from 70 to 100 to 150 at the height of the backwardation and we
[01:28:53] now we're up 20% from there because the backwardation's back so >> I'm US a trip too because you do got to pay attention to those holdings like right now it's saying it only has se crude uh set futures Remember like when
[01:29:07] it had August and SE. Right now it only has SE. So >> Soften a little bit. >> Yeah. Uh but if if we roll off and we back ones are at 75, like you're that's that's the recipe for
[01:29:23] >> USO rally uh or a drift higher just because of the the formation of it. off here now. Spanner, France. Spain or France. Before we go today, Spain or France, who who are we taking away, >> how we feeling, man? Number nine.
[01:29:35] >> He's going to take Well, I don't know about that yet. I'm just saying he's Messi's probably going to catch them when they play. in the last four games. Uh we got Harry Kane, Mbappe, Messi, Mike, who you
[01:29:49] >> Just for today, right? >> Yeah, just for today. Just for today, >> I'll go I'll go France. >> That's good. That's good. Hey, there's no wrong answers. It's Spain or it's France. They're both dogs. But anyways,
[01:30:04] >> Uh, yeah, yesterday we didn't have any sports at all, so it was crazy. >> Oh, well, we can talk about that in a second. I I had to have a couple things >> Well, thanks, E. Appreciate it. We'll see you on uh a little bit later, but
[01:30:18] yeah, everything's just chopping around. I don't know what's going to move the needle here, but E- Min's up 18, NASDAQ up 300. Join us on the YouTube chat. Uh we're watching uh watching these markets and we're going to keep reporting on
[01:30:31] this for the next couple of hours here. But yeah, join us there. Uh we're going to take a quick 90 second break. We'll see you on the other side of it.
[01:30:51] approved FINRA's proposal to eliminate the pattern day trader rule, also known the pattern day trader rule, also known as the PDT rule. This is a big deal for many retail traders. For more than 20 years, the PDT rule has been a major
[01:31:04] roadblock for smaller accounts that wanted to actively trade stocks or options intraday. In other words, we call it day trading. Here's how it used call it day trading. Here's how it used to work. If you made four or more day
[01:31:16] day period, your account could be flagged with a pattern day trader designation. To keep that status, your margin account had to maintain at least $25,000.
[01:31:29] amount, your account could be restricted from trading and issued a PDT related call. At Tasty Trade, they're called an equity maintenance call or an EM call. The result, retail traders with smaller accounts were effectively limited from
[01:31:45] actively participating in markets simply because they didn't have enough capital. Now that's changing. Under the approved update to FINRA rule 4210, the PDT designation is being removed. And that means you no longer have to limit the
[01:32:00] number of day trades you make in a five business day period. And you no longer have to maintain $25,000 minimum just to keep day trading in your margin account. In short, as long as your buying power stays positive, you
[01:32:14] can continue to day trade in your margin account. On our platform, we show real-time buying power so you can always see where you stand and keep your risk in check. Now, it's important to talk about timing. While this news can be
[01:32:28] exciting, these rules will not take effect overnight. The new rules will become active 45 days after FINRA publishes its regulatory notice. After that, firms that need more time to update their system will have that
[01:32:42] additional time, up to 18 months, to fully phase in those changes. So, be sure to check with your broker for their specific rollout timeline. And remember, day trading is extremely risky and not suitable for everyone. You must be
[01:32:55] trade. It's critical to manage your positions carefully and to fully understand the risk of potential loss. We'll continue to keep takes trade account holders up to date as information becomes available. So, stay
[01:33:07] tuned. There's a beast [music] in the financial world and it's not the bull. If that's you, [music] join us on Tasty Trade.
[01:33:21] Genius loves company. [music]
[01:33:41] show. We've got the flopping market here. E- mini is up 10. They were just up 20. They've been chopping around here. The the Russell is about to go here. The the Russell is about to go red. It feels like and I don't know what
[01:33:54] where we're just going to slide. Uh what do you think, Jamal? >> Um I I I think I still think we're going to throughout the day. I feel like the market is um a little bit weak here
[01:34:08] after the strong move to the upside, but I guess we'll see. >> Yeah. Uh we do have some YouTube chat questions. So again, join us in the YouTube chat. Throw in your trade ideas questions. We got one for SpaceX and we
[01:34:20] are heavily involved in SpaceX, but let's see what we got. I'd like some discussion SpaceX specifically. I have a put credit spread at 13120 I'm sitting on right now. Would you be comfortable owning SpaceX shares at 130? I'm up in
[01:34:32] the air on this one. Yeah. Um, so I personally am just because I've got this personally am just because I've got this Super Bowl on. So the 125 short put I sold for about 3K to buy the 300 call for just just a little bit less than
[01:34:45] that. You can see here, this option has gotten decimated since the IPO. This is the the nice thing about selling a put to finance the cost of a a call is that when I bought this option, it was around 2,800 bucks. I would have been down
[01:35:00] $1,000 on this thing, but because I have the short put to finance it, it's not the short put to finance it, it's not the case. Um, but a 130120 put spread, I assume you're in August. Uh, but let us let us know if you have a
[01:35:12] different options expiration. But >> yeah, I think if you sell a put spread, want to keep your risk defined and then you see that the product drops and now you're like, well, you know what? Actually, I'd rather just own the shares
[01:35:26] at 130, you could uh consider selling out of the put. If you sell out of this long put, you are going to collect a credit. That credit would then reduce credit. That credit would then reduce your short puts uh cost basis. So if you
[01:35:39] could by just selling out of the put. But if you want to keep the money, >> if you have the money to if you want to keep this on and then eventually, let's say SpaceX goes down to like 135 130 uh and the short put expires in the money
[01:35:53] and the long put expires out of the money, you will then take the shares as well. So it's just a matter of what you're trying to do here. But yeah, if there's a SpaceX selloff and you are intending to take the shares anyways,
[01:36:07] out of the 120 put, which would be at a gain, you take that credit to reduce your cost basis on the 130 and you can go from there. Uh but yeah, that's >> Yeah, I'm in the same boat. I'm short a 225 put in September um versus being
[01:36:23] 225 put in September um versus being long a call. And um every day it's gone down the other day, but it didn't really make sense yet. Um, but am I comfortable? I mean, um, you know, in a name like this, to
[01:36:38] some degree, I am. I think there's a there's obviously a high valuation here, volatile name. Look, your your biggest SpaceX, I was going to say, but Tesla. Tesla traded in a very similar fashion
[01:36:51] when it first came to market. People just didn't think it was a viable company. And he was like, "Really? Like these these uh you know these uh drive them? What all the there's all the barriers to entry?" And this is the same
[01:37:04] thinking I thought, you know, the idea of a company that was trading around space was BS in the beginning. And um use a lot of government tracks to eventually start, excuse me, a lot of
[01:37:17] government contracts to eventually start to make money. I don't know when that's to 100 and maybe I do take delivery. But um as a trader I'm I'm fine with it. And again, it's going to be a while. We we'll you you'll notice the decline. I
[01:37:31] out in September, so that's part of the reason why it's going to be a while before I would actually even come close to taking delivery on this thing. But, >> Yeah. Um, we've had we're going to have Tim Knight on in a couple minutes here,
[01:37:44] but he's been speaking about the bearish nature of uh SpaceX and the just the point where some people can get out of this the liquidation uh of the shares
[01:37:57] that they've acquired and uh that could create some selling pressure too and we're already at preipo levels. So yeah, I think we we're going to see some more I think we we're going to see some more chop here for sure, but uh like we said
[01:38:09] SpaceX at 130 or if you're converting your short put spread into an undefined risk short put, you have to be able to afford the shares. Otherwise, I would just leave it as a put spread, keep your risk defined. Uh and even if SpaceX
[01:38:23] drops in the near term, you still have the ability to have the thing reverse and you know exactly what your risk is. So, the only situation where I would completely comfortable owning 100 shares of SpaceX at 130, in which case you can
[01:38:37] get a little cost basis reduction uh by selling out of that put into this >> I know we're talking about SpaceX, but I just want to speaking of flying, can we real quick? There was the one thing that you might have missed last night that
[01:38:50] you it was a big is a big sporting event and I think people are going to be it up. I mean, this is it's pretty Do we have it? We gonna go. Yeah. Here we go.
[01:39:03] >> Yeah. Yeah. Number four pick for the Bulls who probably could have been one. amazing. >> This kid's amazing. You should have the game and they lost, but he just like took it up to another level. He started
[01:39:16] trying to take it over and win the game. >> The whole energy changed cuz some kid ended up not working out. But >> I love him, man. He's going to be great. >> Yeah. Giddy's Giddy's going to average like 15 assists a game with this team we
[01:39:30] >> It's going to be He's going to be the sleeper draft pick. >> I mean, he won't be a sleeper, but >> he's got a lot of weapons now. Be fun. >> We got one more question. Let's queue it up.
[01:39:43] >> It's in the box. >> What is backordation? >> Fantastic question. >> Um, okay. >> used to love talking about this all the time. Backwardation
[01:39:56] uh is uh in some products it's a supply and demand situation. So crude oil% uh you're going to see backwardation where the the backwardation by definition is just when the near-term contract so this two-day contract is trading at a higher
[01:40:11] price than the next contract. It's the exact exact inverse is what you'd expect if you're getting car insurance or house insurance. If you're looking at a and you're looking at a car insurance situation, the premium you pay is going
[01:40:26] one-year term versus a six-month term. Backwardation is the phenomenon where the exact opposite is true where you're looking at a six-month term for insuring your car and it's actually more expensive than a one-year term and a
[01:40:40] total cost perspective. So, that's it. It's a supply and demand situation for volatility, >> for futures in general, >> the front month is trading higher than the very next month and so on and so
[01:40:54] VIX real quick. Um, if we can or your your VIX futures thing real quick before we bring in Tim if we could bring that up real quick. This is contango. So, this is the opposite. This is when the near-term is trading lower than the
[01:41:07] months after it. And this is basically saying things are fairly calm. Like Mike just showed with oil. It's backwardation is when things are a little bit volatile. when the near-term is trading higher. So that's when we're talking
[01:41:19] about volatility. You're talking about higher volatility usually in in you're talking contango. >> Yeah. And I think it's I think it's these things. So at the height of the war when when the markets were selling
[01:41:33] off and crude oil was at 115 in the near term it was about a 15 point backwardation between the 2-day and the 34day. So right now there's a 70cent backwardation between the 2-day and the 34 day. But you've got the 2-day at 79
[01:41:46] and you've got the 300 day at 71. So this whole curve has about an 8 point backwardation. But still if you look at the 2-day or the 34 day to the end of the year, you're looking at a 56 point backwardation. So that this co this goes
[01:41:59] in line with the fact that things are heating up overseas and we're seeing that here for V futures. This is why I think it's so important to have a V future uh watch list because if we go from 1740 or 1840 and we turn this into
[01:42:13] a flat curve and then we go into backwardation volatility futures, we would have already seen a pretty big selloff in the E- minis and NASDAQ. But backwardated VIX futures is the key for a 20% 30% 40% sell off in the E- minis
[01:42:27] uh and the NASDAQ too. So until that happens, we're dabbling with, you know, here, maybe fading some other products, but the general market sentiment is that
[01:42:39] we're we're okay for now, calm for now. But if you see this flatten out or flip, are changing. >> And that's backwardation and contango. >> There you go. Mr. Tim Knight, we've got you on the line. Uh, we were just
[01:42:52] looking at SpaceX. I know you've you've had some bearish sentiment. Is that holding? Well, yeah. I mean, it it's um it is only only because not not because of the chart. The charts um too new.
[01:43:07] >> This is very little to go on. Um we haven't even had our first earnings report yet. There's like, you know, 17 bars on the chart. So, it's nothing to do with the chart. It's simply to do with two things. One, the widely known
[01:43:21] exceptionally high valuation based on any fundamentals. two, the fact that um there's like 4% float out there. None of the insiders have been permitted to sell and in chunks that starts on August 11th through December 9 and he launchs from
[01:43:37] the first full year. Not that the man needs the cash, but um yeah. So I I I the only thing I can say from a churning perspective as as little data as there is is that just as new highs tend to be get new highs, new lows tend to beget
[01:43:53] individual decisions about when they just can't take it anymore. You know, because somebody out there paid 170 for it and they've been like glaring point they're just be like screw it, you know, I'm just hope is gone. I'm just
[01:44:07] going to get out. So that kind of feeds on itself. So yeah. Um and I I I I feel compelled every time we talk about SpaceX to say that I'm very incented for the stock to be high. So this is not my bearish axe to grind. Uh but as a
[01:44:22] realist, uh I I can this could be in the double digits, you know, in the next few months. So that's it. [laughter] Um having said that, uh I've got I do have SpaceX in my little list of charts.
[01:44:36] other things to look at if we can jump in. >> All right. So, it's a funny morning because uh the CPI came out. It was It
[01:44:48] wasn't just cold, it was ice cold. It was deflationary and everything rocketed higher. It was just an instant party. That's just about gone. Uh the entirety That's just about gone. Uh the entirety of the pop on the ENQ is already gone.
[01:45:01] And 95% of the pop from the ES is is uh and by the time we say goodbye, it'll probably be completely gone. Um you can see this illustrated. [clears throat] Here's the NQ. And I've been obsessed with this range, not only the entire
[01:45:15] range, but this kind of lower half of the range because we had a nice tumble yesterday. And I was ringing my hands in yesterday afternoon show about, well, we could just like rally again and bounce between this like a ping-pong ball. And
[01:45:27] yes, it did that. But if you get down to a finer granularity here, you can see it's gone, baby. There's the pop. It's faded again. And what I want to see as
[01:45:39] the uh blood drifting from the fangs bear that I am is I want to see a failure of this line, which has been the base we've had for about a month now. bit here, a little bit there, but we've never closed below it. Uh if we do close
[01:45:52] below it, I think you're going to see a real acceleration in in selling. Um, my sort of core position remains semiconductors. And here's SMH. And this is kind of interesting, too, because you can see yesterday, oh, I say it opened
[01:46:06] strong. It actually opened down, but it was still strong for the day. So, it closed near its lows for the day. Same deal here. As of this morning, we undid all of yesterday's damage and most of Friday's damage. Well, that's gone, too.
[01:46:21] We have opened strong and we've been sinking all day long. Um, and the as far as the support there, it it's not as cut and dry as the ENQ, but something like that. Um, another thing that occurred to me yesterday is that I used to be
[01:46:37] following um, Wall Street's always looking for like the next big thing, you semiconductors, it could be the hyperscalers, it could be, you know, years ago like uh, uh, cryptoreated or pot stocks or whatever. Quantum
[01:46:52] computing was big a few months ago and I'd sort of stopped looking at them even earlier and it sort of dawned on me. I haven't looked at that world in a while. Most of them have the letter Q in their ticker but they've been having a hard
[01:47:06] time of it as well. kind of following along with the whole semiconductor and hypers scaling space and just kind of um jog people's memories. some of the items out there that do exist um which we're having a grand old time in June but have
[01:47:20] really faded away from all of that is u QBTS which is Dwave QBTS which is Dwave and there's uh cubit QBT very cool ticker symbol for this space um and here too you can see just this this
[01:47:34] too you can see just this this tremendous rally uh around miday but we've been breaking down below uh these sort of wild wild uh um ranges is here. Broadly speaking, of course, it's been
[01:47:47] down for years, but it it keeps getting it little day in the sun, but it's just it little day in the sun, but it's just not not not sticking. Here's I NQ, which not not not sticking. Here's I NQ, which is ion ink. Um, down again today. And
[01:47:59] is ion ink. Um, down again today. And then one last example, um, Regetti RGTI. said, I haven't been paying attention to that space, but um, what we've been seeing in tech in general is not spared quantum either. Uh, as far as SpaceX
[01:48:14] goes, getting a a welcome bid here. Uh, lifetime lows were yesterday. Um, I lifetime lows were yesterday. Um, I imagine as we get up to um this line here, which had been support, we're going to just it's going to be a a thick
[01:48:28] going to just it's going to be a a thick brick wall of resistance. Uh, so yeah, bounce here. Could continue, but I don't think it's got a heck of a lot of life uh left in it. Uh, and we're seeing that that bid reflected in um the whole
[01:48:42] space/satellite um realm. Anyway, a little bit of bounce going there too, even though they've just been shellacked post IPO. So, we've got as Space Mobile, we've got Rocket Lab, uh, up 4.2%. These are recovering
[01:48:56] Lab, uh, up 4.2%. These are recovering somewhat. Uh, as far as ES goes, much stronger than tech in in the in the past month or so. um relatively near um the month or so. um relatively near um the top of its channel here. But I would say
[01:49:10] if if if we're going to consider that channel to be a useful range cuz it's more prone to weakness than strength at these levels. Uh of course, everyone's talking about the real bomb this morning, which is IBM, which I'm
[01:49:26] The the chart's pretty inscrutable, actually. I mean, I I I look at IBM quite frequently and it really just did not speak to me. But it was just a a a bolt from the blue. It's trading back to
[01:49:40] the same levels it was in October 2024. So, we got almost 2 years just undone uh So, we got almost 2 years just undone uh on that. So, IBM, yep, down this is like crashing, you know, it's down, you know, 25%. This is this is not
[01:49:56] some little startup. This is a big blue. But you can see here how the important if this was 1982, the whole market would be crashing. These days, it's just like IBM. Oh yeah, IBM. Uh-huh. Nobody seems to care. Everything's still green.
[01:50:09] >> Yeah, it's wild. And uh the banks, I just look at JP Morgan shockingly has reversed its entire move. Uh opened down like eight 78 points. Now it's up nine. Uh kind of a crazy reversal there with a lot of these banks reporting pre-market.
[01:50:29] >> Uh what else? Goldman Sachs was already up 85 bucks. That's crazy. optional. I mean, I just I just put them in there as just little extras if
[01:50:44] needed. Uh I just want to touch on China real quick. Uh FXI's been rallying for a couple of weeks now, and I think it's just about done. Uh I'm short FXI. I've got a relatively loose stop on that. Um, got a little wiggle room here as you can
[01:50:59] overhead supply there. And I've got an individual short that is behaving itself individual short that is behaving itself nicely, which is by B I DU. It's down over 5% this morning. And it's got a real pretty head and shoulders uh top
[01:51:13] right there. So, obviously, if FXI resumes its weakness, it'll help this one as well. But I left I like FXI and BU on the short side. Love it. Yeah, lots lots of moving, lots of craziness today. Um, but yeah,
[01:51:28] appreciate you, Tim. We'll see you a little bit later on today. All >> Uh, but yeah, E- Minis, they sold off. They were red uh while Tim was going through his charts and now they're up 12. And this is a a crazy chart. If you
[01:51:41] look at JP Morgan opened and immediately rallied from the lows, it is up almost 20 points from the low print of the day. Uh, just absolutely wild here. And were flat in JP Morgan and we've continued to trudge higher. Maybe this
[01:51:57] is the reversal we needed uh to push this E- mini print higher because these banks opened weak and uh I think if we see some strength in the software names, Microsoft gapped down and that has picked up a little bit of a bid. Uh IBM
[01:52:12] tanking here which is really interesting uh all things considered. strong news. Even the ones that go and have earnings tomorrow. I wonder thing. H >> it's nuts. I mean, I can't believe the
[01:52:26] internet PNC. >> We've been open for an hour. The equity [clears throat] market uh has been over for less than an hour and the selloffs >> Yep. >> We got Julia on the line for a research
[01:52:39] >> hi guys. >> What say you with these banks >> with I'm not even looking at the banks. [laughter] I'm looking at IBM. I thought it. I thought you just assumed you had a research piece on banks.
[01:52:53] >> No, I got one on zero DTE which is like, you know, also I mean zero DTE are every day. But now I'm looking at IBM and like this is I actually I just tweeted about it. This is the biggest move it's ever had in a day. Um the
[01:53:09] >> which since I actually went back to 1994, so I got to change that. Um but yeah, the since then the biggest one was uh in 2000 15% and then another 15% in uh 1999. So like basically since like the dot bubble like this is crazy and
[01:53:26] it's not even this is this is why trading single company names especially undefined risk makes me nervous because they didn't even have earnings. They have earnings in like two weeks or in like a week basically and they just
[01:53:39] released like weak preliminary earnings results and now it's tanking. Like >> you got to come on here every morning and spread your nervous and anxiety on here. Okay, we already have positions in here. Don't bring that to us.
[01:53:51] yesterday or you got positions today? Those are very >> Okay. Thank god. Um but yes, this is why one of my rules is I don't love trading undefined risk in single company names because sometimes goofy things happen.
[01:54:04] >> No, it's true. It's it's just a different beast like the the E- Minis NASDAQ. uh it's just a lot easier to manipulate and manage if you have undefined risk the single name equities you get paid a little bit more sometimes
[01:54:17] a lot of it more because you get the implied volatility boost but you are at the mercy of these things that you cannot see coming uh and that's why trade size like I actually have I'm more inclined to to be trade larger in MEES
[01:54:30] inclined to to be trade larger in MEES S&P XP relative to an equity if I'm again they don't you do not have these same types of moves Not like you wake up and you're down 25%. Not going to happen
[01:54:42] have a big move at some point to five definitely add more to some of our year-long trades. Yeah. But got? >> I digress. I'm here to talk about exit
[01:54:55] timing and zero DTE iron condors. Want to talk about it? >> Let's do it. >> Cool. So, um, this piece, uh, so God was he'll put the piece together if you want to follow him over on X. And then God is
[01:55:07] the person who did the analytics from Mr. God litics over onx as well. So affects uh zero DTE. Here we're looking at iron condor. So again kind of we're although a lot of people trade directionally uh with zero DTE. An
[01:55:21] important thing here as well is that we're using um we're looking at S&P. So and butter zero DTE strategy. So we wanted to look at basically is getting out of the zero DTE position at different times of the day going to
[01:55:35] of expect it to. Do you guys I don't know how often you trade zero DTE but is where you usually don't like having the position on past? >> Um good question. Not not for me. Um
[01:55:49] just because all my positions are super small. Same story for like single name zero days because I know I'm going to put them on all the time and they can be super volatile. Uh but if I have a loser, I'm just going to leave it. If I
[01:56:03] have a winner, I'll take it off. Uh, so it depends on the timing of the market movement, but I think right now I have a good example like I've got a 75757580 after this market opened up and ripped up on the CPI report. I put that on. But
[01:56:19] I now have 40 points to the upside before I'm tested. So because my proximity is 40 points, I'm just going to leave this on and set I have my profit target already in there. So, uh, a lot of different factors, but for me,
[01:56:35] obviously different trades than iron condors, uh, but I do know from your previous research that you've done that 2 to 3 p.m. window can really kill your your expected P&L and also your win rate.
[01:56:50] >> It can it really Yeah, it it depends a little bit. So, there's a couple think you you really hit the nail on the head, which is like these are these are they're volatile positions, not necessarily trading them daily, but they
[01:57:03] necessarily trading them daily, but they should be very small positions um just volatile they are and how um you put them on more frequently. The mechanics really start to change when you're trading zero DTE just because you're,
[01:57:15] risk strategies just to control the buying power um as they kind of fluctuate throughout the day. And so, uh, management changes a little bit. Um, something that, uh, becomes like something you have to kind of think
[01:57:29] you're dealing with intraday liquidity, which is something that you don't longerdated positions. So, um, then underlying selection is another big factor, right? uh you know depending on whether you're trading an ETF or an
[01:57:43] index uh and how uh you know much of assignment risk you want to you know basically um take on it's really going to change like how you manage these exit timing. So just pulling out from the day, what do we see um from the
[01:57:57] numbers? Um and this is kind of something we wanted to talk about just cuz zod have become incredibly popular. Um and you don't have as much time to like the setup becomes really important because you don't necessarily have the
[01:58:10] liquidity or really the time to be able to get out of the position um as easily as you want. So there's not as many levers as you can pull with the zero DTE trading. Um but here we wanted to look at like yeah just exit timing kind of
[01:58:23] treating at like you know our 21 DTE kind of equivalent. Is there sort of like an exit time that um balances risk and reward when it comes to zero DTE. >> Yeah. Yeah. Absolutely. >> Cool. All right. Let's take a look at
[01:58:36] the study. So we did um 20 Delta SPX iron condors 30 minutes after the open. Um and then the wings are $20 wide. So we wanted to capture like you know a good amount of like tail potential tail. Um, so, uh, and that being said, we also
[01:58:50] took winners off at a 25% profit target. And if a if that target was not hit, we kept the trade on basically until 11:00 a.m. noon, 1:00 p.m., 2 p.m., and 3 p.m. The u median and average P&Ls, we like to take a look at both because median
[01:59:04] like the typical experience would look like. And then average is what you know when we sort of like take the tail into account. So there's usually a pretty big us sort of different things. And what we can kind of see is that when we're
[01:59:18] what we like to use a little bit more here, is that between 11:00 a.m. and 3 p.m., you're actually on, you know, just typically not collecting that much more by having the trade on for a longer period of time. So, the upside becomes
[01:59:34] more limited the longer you have the trade on. And um just kind of looking um a good amount of that is actually collected at 11:00 a.m. um or even at 12:00 p.m. Um does that kind of align with what you guys were expecting?
[01:59:48] if you're selling an iron condor, you're You can only make what you've collected. So the more profit you see on the table, the more risk you take going forward and the less profit you can get going
[02:00:03] forward as well. So, if you're at 50% profit by 11:00 a.m. and you're holding it from 11:00 a.m. to 2:00 p.m., you're not going to get much more than that until it literally like starts to expire worthless until those options get zero
[02:00:16] bid, I think, is what we're seeing here, >> right? And then interesting kind of like difference between the median and the average just shows you how much that that's like really the big difference between average and median. one is a
[02:00:30] sort of like tail occurrences. But because uh these are small positions frequently that tail and controlling position sizes and just trying to get as many small profits as possible becomes very important especially as you trade
[02:00:45] you know shorter and shorter durations. >> How many occurrences like did you have in this if you just off hand >> this is going back to I think this is a this is going back to like 2023. You're looking at daily going back to 2023.
[02:00:59] >> Yeah, >> a good number of occurrences. Again, meant to represent how people actually trade, although a lot of people do trade their, you know, zero DTES kind of every day. Um, but we're trying to get as many
[02:01:12] occurrences as possible and look look at like aggregate statistics to kind of give some kind of snapshot of what a typical trader would experience. Sometimes you put on a zero day and you just have bad luck. Sometimes you can
[02:01:24] not revisit it. It there's a lot of variability in how people approach look at a you know a aggregate statistics for that. >> Sweet. Love it. >> Cool. All right. Now the punchlines.
[02:01:38] Let's go to the next slide. So here um we're sort of looking at our C bar. So our tail risk. This is basically our C bar. We're looking at what do the losses for the strategy look like in the worst 5% of cases. Um, you when we look at it
[02:01:51] pretty close to your buying power. And what you can see is that we noticed that the median P&Ls didn't change like a ton between like 11:00 a.m. and 3 p.m., but your tail risk does increase significantly. Um, and this is part of
[02:02:05] earlier throughout the day is something that a lot of traders do because even though those tails don't hit very often, when they do hit, they're enough to substantially. and they can be large enough where it kind of doesn't uh in a
[02:02:20] lot of ways make sense given the amount of credit you can collect by having the position on for a longer period of time. There's just not as much upside statistically. >> Yeah. And we we're seeing it in real
[02:02:32] time. We saw uh S&P down five, then the CPI hit. I should say the E- mini futures down five, CPI hit. We rip up 40 points. Then we went back to flat, ticked to red, now we're up 20. So like these markets are still
[02:02:47] moving even though even if the net the net range is flat uh by the end of the day like you still have the volatility that can turn into momentous moves in either direction. So uh the more time you have the more tail risk you have for
[02:03:02] >> Right? So, and then when we go to the next slide, when we look at kind of cumulative, and again, this is not, you know, not everyone's going to be trading looking at our daily occurrences and sort of adding them up and take a look
[02:03:14] at what we look at, we can see that that 3pm while it does gain the most because the day that you hold the position and the more theta decay the position gets. Um, it is by far the most like volatile signal. And that volatility, you know,
[02:03:27] controlling that becomes very important when you're trading small kind of like volatile positions every day. kind of becomes the priority versus income generation just because bleeding, you know, over time, especially, you know,
[02:03:39] example, or there's run of the market or you make a directional assumption that turns out to be wrong, like controlling that position size and really trying to get as many small consistent profits as possible and controlling that overall
[02:03:51] volatility becomes very important. Um, and then when we're looking at, you know, basically the sooner you take the trade off throughout the day, the more uh stable the kind of signal becomes. And so that 11 p.m. we can see it's
[02:04:03] time that's been tested, but much less volatility than leaving it on throughout the day. Um, so yeah, >> love it. Yeah, I think that blip at the in the very beginning of that chart that April between April and July, you can
[02:04:17] April between April and July, you can see that red big steep red downturn. And that's where you can re you can run into issues if you're not sized correctly. uh expiration because you're trying to get that max profit over a num a large
[02:04:30] sized correctly because as you can see in the very beginning that red bar is that were you're managing at a time based exit. with how I think like things tend to get a little bit crazier towards the end of
[02:04:45] move you just never can tell how it's going to turn out. putting these positions on right at the for obviously intraday especially. We're seeing that right now. And Mike you
[02:04:58] that you know if you just start if you had started trading right at the weren't sized correctly just from bad luck even though like long-term these positions turned out to be profitable like that you know those losses if
[02:05:12] just kind of take you off the strategy completely. So that's part of why yeah controlling those tails as unlikely as they are and just controlling overall volatility and trying to make P&Ls as stable as possible with you know you
[02:05:25] know profitable on average positions uh that kind of becomes really key. >> Yeah. >> Cool. Okay. So um later access improve on average because there's more time for the you know the value of the position
[02:05:40] especially when we looked at tail risk um sort of in this study. So um when you hold zod and condors later into the concession like into the session actually raises win rate and median profit but it also leads to larger tail
[02:05:54] risks and um or larger tail losses and sort of deeper draw downs. And again when you're trading like small positions every day it's really those like small position sizes and small wins over time that really make a difference. So um
[02:06:08] giving you know taking we also used a small profit target here of like 25%. to actually emphasize because that sort of reinstates, you know, uh, getting as choosing exits, you really base it on risk tolerance. But again, be bearing in
[02:06:23] mind that you really want to scale your risk tolerance with the volatility and the profitability and the probability of profit of the position. And with zero DTE positions, they can just be very volatile, right? And so sizing that
[02:06:35] profit targets and just again trying to be consistent, I think is the theme >> Yeah. I mean, it it really makes sense when you think about it. A lot of times we talk about 50% profit on uh the the great selling window of 45 days to 21
[02:06:48] days. So, you would want to make that smaller 25% in that situation for Julia. As a matter of fact, we have a question queued up. I honestly it's a it. [laughter] >> Hey, do you guys recommend any beginner
[02:07:04] >> I don't know. I don't I think mine's so? I [laughter] would say so definitely better better I mean first of all it's [clears throat] to Natenberg which is considered the bible of options trading
[02:07:17] but your book is probably a lot more digestible than Natenberg I would say so coming in as well I was dealing with like the quant bibles which were very dense and very theoretical and very focused on models and I feel like I'd
[02:07:31] knowing how to put on a trade and that was this is a you know [clears throat] a lot of statistics we're using a lot of back tests but the idea is that you know know how to kind of put on a trade. So in that sense it's beginner friendly.
[02:07:44] that you need to know like just to get started is kind of in there. So you guys want to check it out. [laughter] the New York Times bestseller list? Like >> I was on the Amazon bestseller list.
[02:07:59] >> I don't know for like three weeks I think which is pretty good. >> That's pretty damn good. It was actually like two of those weeks were before we >> two of those weeks were before the book was even released. So that's
[02:08:14] >> little hype. I think we're still ranked like decently high even though it came out a couple years ago. So uh you guys can do the second edition. Um and you and I'll take a backseat on that one. How about that?
[02:08:27] this. Life is a call option. I want to write it. >> Life is a call option. And that's all it is. >> life is a call. >> Chris Speakio is talking about his roots
[02:08:40] black swan event." [laughter] >> That's all it is. Chris, tell you if that's like a long or short call. That's a You got to read to see. >> That's right. You got to read to see. Julia, appreciate you. Uh yeah, great
[02:08:54] research segment. Size always always matters. And uh yeah, if you're holding to expiration, just you realize you're signing up for more volatility at the guys. Peace. >> Adios. Peace.
[02:09:06] >> Uh, yeah. Ein have caught a bid here. I am absolutely kicking myself for not closing these three-day uh shorts on JP Morgan on the open. Morgan on the open. >> Um, that would have been a massive
[02:09:20] But, >> I just closed the spreads a bit ago. Um, and then I, um, I actually got in a super bear now >> in SPX. Yep.
[02:09:33] >> Cool. Well, we have another guest on the line, Mr. Dr. Jim. >> man? What's going on? How we doing, gentlemen? How we doing this morning? >> I would say we're thriving. >> Uh, we are. Yeah, sure. I mean, CPI is
[02:09:48] saw? >> Yeah. Negative.4% >> Yeah, it went down from last time, >> oddly enough. That's only because oil was down, but oil's going back up. So, >> you know what we need? We need a CPI
[02:10:03] print on the day. That's what we got. Zero day options. Why don't we just have where inflation is right now today at this moment. >> Oh, you want you want daily CPI numbers? So you So you think you think the
[02:10:16] government's going to be efficient enough to give us daily real time data? it. [laughter] >> Yeah, >> Month ago, we know we know it was lower than a month. We know a month ago was
[02:10:29] heading back up and that's been the whole driver, right? >> Yeah. Yeah. Uh it's still surprising though and you know I mean that stuff is so man I I have a lot of issues with all those numbers you know in my opinion
[02:10:43] it's all made up. It's all imaginary. It's all fictitious cuz the connect like Like I don't want to get on the soap box too far because we got to get to the piece but man they take so many things out of CPI guys. Can we even trust the
[02:10:56] >> No. Cuz when I leave the house, it cost me $300. So where's that? >> Where's that? That's not a 3% That's not a 3% inflation. That's [clears throat] a >> Crazy. >> That's what I'm saying. That's what I'm
[02:11:09] segment cuz Laura is pushing us pretty hard this morning. So let's go. A short man. She's on it, man. Short premium boosters. Okay, so let's go. All right, gentlemen. So, in my opinion, right, I don't know that you can beat the
[02:11:26] shortput strategy as the go-to strategy. We've talked about that a this a little know, guys. Mike, I know you love diagonals. That may not be your number one, but I know you love diagonals, Jamal. I know you love calendars, but
[02:11:39] guys, the short put, just the simple short put, I don't know, man. I think we one. >> Yeah, I would agree. >> I I would agree. I used to say, so my retirement plan has changed a little
[02:11:51] bit. I used to say my retirement plan is to accumulate uh a couple million dollars and just sell puts in S&P and never never worry a day in my life. That has changed slightly, but I think now the the
[02:12:07] booster in my mind is the short put plus the short call, but never letting the shifting it higher, shifting it higher and just manipulating it. So, I get that call premium. But the same idea, it's just like a short put, especially in
[02:12:20] something like S&P or NDX. Uh it is a very high probability conservative environments or at least you're you're outperforming the market in the case of the buy and hold where they're taking full static risk and you take dynamic
[02:12:36] short put, too. >> That's exactly right. I think that gets about short puts and they think about risk and they think about whatever. It's like man I mean by definition I mean if you ma if you match for notional
[02:12:49] obviously as option traders because we're using the leverage we're using the buying power efficiency but if you match for size and match for notional the short put is way less risky than the shares themselves because you have to
[02:13:02] That's exactly right. So it's very interesting you brought up the short call as being the booster. What I'm going to propose here this morning is the shortput actually has boosters inherently already in the system. So
[02:13:16] are playing the positive drift. You're playing the market higher, but you also have positive data and you also have inherent in the strategy, which of course this is going to be the case for
[02:13:29] all short premium strategies, but the short put is uniquely special because you do benefit from a market that wants to go higher over time. So the short put is always positive theta. I've got time working for me. The short put is always
[02:13:42] negative Vega. So volatility does contract like it's doing this morning. got that positive delta. So in the event that the market does rally, I sell a put after a sell off or I sell a put at any time and the market goes up. I'm going
[02:13:57] to get paid on all three of these. I'm going to get paid on Delta. I'm going to get paid on Theta. And I'm going to get paid on Vega. Now, of course, and I don't know who said this, but man, it's a catchy jingle. For every gimme,
[02:14:10] there's a gotcha. [laughter] So, the gotcha here is if it goes down, then you're gonna get hit. Like, then you're going to get hit on the delta effect and effect. So, you obviously need to be aware of what you're doing. You need to
[02:14:22] make sure your size is in check. But the reason why I love the short put so much going to talk about that here in just one second. But hold on one minute, one second. But hold on one minute, Laura. The short put by itself just as a
[02:14:35] standalone strategy already has these built-in mechanisms that can make it just a really powerful strategy. Agreed. Yeah. The the synergy is apparent in the the Greeks with the short put construct in the sense that if
[02:14:51] the market sells off, you're getting an increase in implied volatility which right when you get in, you have positive theta that decays the extrinsic value. market rallies, you're going to benefit from that delta. And with
[02:15:05] upside, your implied volatility will likely decrease as well, which is where you get that negative Vega kicker. And it's a very synergistic trade. Uh sell-off, >> but it also works on the other on the
[02:15:20] you get a sell-off, all these things kind of work against you. But at the same time, it doesn't matter at the end of the day if you have a long-term trade or if your option is still out of the money because all of that uh all of that
[02:15:33] exttrinsic value increase based on you know your theta reading or your Vega reading or implied volatility change is extrinsic value based. what's amazing so Laura go to the next slide now. So, what's amazing is we can
[02:15:47] standalone strategy, but we can take advantage of it in a number of ways you mentioned, Mike. It's like, all right, I want to get that call premium and I'm just going to be very prudent with my adjustment on the call side. I'm
[02:16:00] vigilant and I'm going to move it around as needed so it never goes in the money. That's a great strategy. You can also do ratio spreads, which is a, you know, of the short put because now, you know, you're building in this long put
[02:16:13] vertical. You can do a standard one by two. You can do a one by30 and kind of, short puts. You could do a 2 by30 and have more exposure to the downside with the long put vertical. There's a number of ways that you can kind of adjust uh
[02:16:26] uh you can customize the put ratio spread, but it's a similar type of idea because the short put is going to be the driver. You could do a J lizard, right? You can sell a put and then sell a call spread. Again, the short put is the
[02:16:39] driver. And then lastly, for a defined risk version, you can just do a short put spread. Very different than a short put, but still the same general spirit where the short put is going to be the driver. So here's four actual strategies
[02:16:53] where in my view, it is the short put that is the driving mechanism of all four. But these are all slightly different. Maybe you want to be a little some call premium working for you too. Maybe you want to widen out your break
[02:17:06] know, this gives people a few things to think about where they want to tap into don't want to do it with just a standalone short put. >> Yeah. No, that's that's 100% correct with these and and these are all
[02:17:20] fantastic. They're they're these are largely selling positions. I think you are all selling and collecting positions, but you got to add in almost the the Mikey patented trade when you add in the the super bare trade. uh I'm
[02:17:34] will, where you're selling a put spread to finance buying a call spread if you might run up. So again, I know these are all collecting, but one that um sort of try to uses some upside convexity. It's
[02:17:48] >> No, I love it. I love it. And you could do the and the great thing about the Super Bowl, I mean, it would be an absolute I mean, it would be a number five starter here. Like it's like a it's a Connelly early, right? It's maybe a
[02:18:00] Payton toy. It's not necessarily a Garren Crochet. It's not necessarily a Ranger Suarez, right? But it would be number five on the slide, I think. Yeah. So, but no, that's 100% right because the great thing about the Super Bowl is
[02:18:12] it undefined risk if you want to take a little bit more risk and collect even more on the short put. And so, Mike, what you normally do it with the short go-to? >> Yeah, if I'm doing it in like SPX, it's
[02:18:24] a short put spread to buy a call spread. Sometimes the short put spread is more the call spread further out of the money. But the same kind of setup can be done undefined risk. I have one in SpaceX where I sold a 125 strike short
[02:18:37] put and I bought a 300 strike call a year and a half away from now. So just creating a really asymmetric upside if this thing does what people think it's going to do. I want to capture all that upside uh profit potential on the long
[02:18:50] call especially because we talked about how the short put is is synergized with that the S&P market or S&P market where on the way down you get more premium more implied volatility uh contraction potential. Same thing with SpaceX. If
[02:19:04] week, you're going to get an IV infused into there. So, I want to own that call, but I don't want to pay for it just yet. I want to finance it with a short put.
[02:19:17] All right, let's get them a few takeaways. Let's get them on to the next piece. So, positive theta and time decay are what we bank on over time as option our profitability that we can position ourselves to take advantage of in our
[02:19:31] portfolios just as we do with the volatility contraction and the positive drift in the shortput strategy, which again, it could be a standalone shortput or it could actually come in a number of different varieties as we talked about.
[02:19:44] >> Love it. Love it. Love it. >> Yeah, it's uh it's it's crazy market here. We got E- Minis up 15, NASDAQ up 200. Dr. Jim, thank you very much for your research piece and wholeheartedly
[02:19:57] agree. There's a million ways to involve a shortput contract in your strategy, the correct size. >> Yep. Love it. bit later. Uh all right, guys. >> E- minis up for 14. the Dow has just
[02:20:15] ticked red, interestingly enough. Uh so yeah, I think these rallies are really off. They keep getting hammered. Uh but yeah, the banks have reversed completely, which is really wild to see. Uh and yeah, this this trade was a
[02:20:30] worthless and now they've they've rallied all the way back. This net trade is almost a $200 winner. So a full 100% return on debit paid. I'm just going to between the strikes now. I've got two calendar spreads at 340, 350 with two
[02:20:45] shorts against it and all of this exttrinsic value goes to zero by Friday. So, I'm gonna let this thing run and it'll just keep uh increasing in value if we stay between these strikes or near them. So, we'll see what happens. But,
[02:20:58] break. You're watching Tasty Live. We'll see you on the other side.
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[02:23:09] increase your return, decrease your risk, or quite possibly both. Sure, you've heard of the Greeks, you know, your Deltas, your thetas, your Vegas, your Deltas, your thetas, your Vegas, your Charms, your Vamas, etc. And you're
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[02:25:08] the show. This is Futures and Focus, sponsored by the CME Group. I am joined the CM Group. How you doing? >> Great. Thanks for having me back. >> Of course. As always, we will anytime anytime you want to come on.
[02:25:22] Tasty. today. And, uh, I was just telling you before the show, we got a position on in crude, the big contract and iron condor there just plain as this IV increase.
[02:25:35] I've got a straddle uh right at the money right now in the micro crude little bit. The sizing difference, but what do you make of this backwardation markets? >> Perfect. Yeah, I mean I think you know
[02:25:47] your viewers probably won't believe us, but we had this segment planned before [laughter] the re the recent events over there. So I mean obviously a timely a timely timely time uh to talk about crude oil and you know I obviously a lot
[02:26:02] of the movements being driven by the geopolitical situation. You know I don't that but but clearly it's moving the markets and and a good time to talk about your positions when we get there. >> For sure.
[02:26:15] >> Dive in. >> Yeah. So we've got you know we actually There's actually a mini that, you know, we'll we'll kind of focus on what we might call the standard size and the micro today. Um, know that there
[02:26:28] actually is a size in between that's 500 barrels, but we'll focus on these two. The standard size, which is 1,000 barrels of crude. So, with these, I mean, what is crude at now? Is it 8090? >> Uh, 78 currently.
[02:26:40] going to give you the exact price. 78 >> Perfect. So, $78,000 worth of crude, right? if you're going to if you're contract, especially when you get the moves and the volatility like like we've
[02:26:53] seen over the last several days. So, that's the standard size. Um, and then of course the micro is onetenth of that. So, 100 barrels, which again, we talk individual traders, a lot more manageable size, you know, at $7,800
[02:27:07] rather than $78,000 uh worth of crude. So other than that, you know, it's pretty similar um with one, I guess, big um big difference in that the big crude is physically delivered, right? So if you're coming up
[02:27:20] these retail shows and people say, "I don't trade futures cuz I don't want a yard, right?" And and obviously that's not going to happen, but you know, the big is physically delivered. So you know, a firm like Tacy, your risk
[02:27:34] management is to make sure that nobody has a position going in getting close to aware of if you're in if you're in that the bigger contract expiration >> whereas MCL is uh
[02:27:47] >> cash settled right so which means if you hold that till expiration we move the position goes away so a little bit less to think about if if that's what you're >> Yeah for sure. I think for me the the big difference is strategy. So I trade
[02:28:01] the crude oil the the main contract but it's all defined risk. But with MCL I can buy the static future. I can do a covered call type situation. I can do a straddle. So, uh because my account size is smaller, I can do more more flexible
[02:28:15] >> Exactly. And when you say that you trade it with risk defined, that means you're trading with options, right? So, you're not outright long futures deltas where there is there is no such thing really as defined risk, right? So, and that's
[02:28:27] think we're going to talk about a little bit that we do have options on both of these so that you can do those defined risk trades. Uh again when it gets >> Yeah, >> it's important anytime but particularly
[02:28:41] like it has recently. >> Absolutely. And I know we just had what how does you know because I know people are always asking questions about how margin changes when when volatile you want to speak to that real quick?
[02:28:54] system and it's not that important. It's called span but span basically looks at looks at a lot of different things but that's that's those are a couple of the main ones. So when V does move like this, you can expect sometimes that that
[02:29:08] the margin might increase uh with these increases um in uh in volatility. And I right now. Um I want to say >> yeah, it's like $800 right now as I'm >> uh on the on the small one. Yeah. So yeah, so the big one be about 8,000. Um
[02:29:23] slide was created, you know, might have gone up a little bit, but that is increase. Yep. >> Um in the market. [clears throat] >> Yeah. And that that span is is beneficial to the retail trader in the
[02:29:37] sense that it takes a more of a real time risk approach. The risk is still risk like if you're selling a put you your risk is you know 70 grand or whatever it is but the real time span margin just gives you that extra
[02:29:50] flexibility where you know that this number can eb and flow but you get the put up as much capital. >> Totally. and and you know and I've I've the better part of a decade you know and I know that so you guys look at that as
[02:30:05] a proxy for the risk in a trade not not like you said it's not an absolute number or anything like that but you know on a relative basis what's the margin versus another product and it is a good way to look at it
[02:30:17] know we call it the capital efficient nature of futures where you know even at 8,000 that's you know less than or about 10% uh versus you like a 50% margin that
[02:30:29] you'd have in the securities, you know, reggg t if in the securities world. >> These are some of the Yeah, I think we've actually gone over most of this saying, right? So, there's obviously there's different ways to get exposure
[02:30:42] to to energy, the energy sector as well as oil, but you know, one of the the phrases we use a lot is if you truly want exposure to crude, there's nothing right? [laughter] and and that's literally what you're trading with the
[02:30:56] future. Um so you know that's you know when you compare it to the ETF or oil stocks you know you can get exposure to crude by you know an energy company. Um but it's not going to have that onetoone relationship with the price of crude
[02:31:09] going to have. >> It's true. I mean, you know, oil stocks, if something happens with the company per se, you know, any then anything you to oil that can affect the company and
[02:31:22] trading at the moment. So, >> right, like you get long Exon because whatever. >> There's a lot of factors that could go into the price of that stock. So, it's not not as much of a pure play, I guess,
[02:31:34] >> Yeah. >> Um, yeah. Some of the things that that the third one on there is what we're seeing now and and is a big one with crude that that geopolitical risk and particularly in the Middle East. Um, but
[02:31:49] gone through some changes lately. Um, one thing to point out too is it's not enough to an OPEC meeting, but we actually have a tool on the website called the OPEC watch tool. Um, and it kind of acts like the Fed watch tool
[02:32:03] does. It uses it uses crude options. >> You guys in your watch tools? Well, you know, you know, we've got >> I'm not mad at it. I love it. [laughter] >> Uh but yeah, uses like the option pricing to kind of try to predict what
[02:32:15] OPEC is going to do at its next meeting. So, it's worth watching if you're >> Awesome. Cool. >> Um yeah, some of the use cases obviously, you know, I don't know that too many retail or individual traders
[02:32:27] but um certainly at an institutional level that's, you know, if you're an airline, um obviously a use case for that. Um, but trading a view, trading around events, the capital efficiency that we talked about. Uh, with the
[02:32:40] micro, you can scale into and out of positions. So, I think those are all fairly self-explanatory uh, use cases. >> Yeah, I think it's always interesting when you have uh a farmer that's a corn farmer, they can use futures to hedge
[02:32:52] in corn, you can short the contract relative to what you expect your output it's interesting. >> Or if you drive Uber or Lift, you >> Yeah. Yeah, [laughter] it's true. like if that is and you're not an electric
[02:33:06] car in oil. >> But yeah, I mean that goes back 200 exactly that was the farmers and you know and the cool thing there is you could see a farmer you know hedging but also they're pretty expert on what's
[02:33:20] happening in the grains markets and things like that. So they can also you know trade advantageously based on you know their knowledge of of that market playing it both ways. >> Yeah 100%.
[02:33:37] much? Yeah. You know what? Yeah, it's good. Let's go. I was going to say let's >> Well, let's talk about instead of going over that, you know, and I and I think you pointed out options on the onset, but if you want to talk a little bit
[02:33:49] about what you guys have done recently uh with the VA. I think that's >> with the crude options. >> Oh, yeah. Yeah. No, we have. And and going to talk about a little bit more of that. at you and I 101 a little bit
[02:34:03] about some trades, but uh like Mike has mentioned his trades more recently. Um advantage of this move that we got coming up in crude and it seems like the landscape is changing and once again we're trying to see I won't say the
[02:34:15] works. >> Yeah, I think uh I got into a crude iron condor in the the main contract this morning just playing into that wide range uh to be successful there. That was in the 34day but then I also have uh
[02:34:29] was in the 34day but then I also have uh an MCL straddle. So, this is at the uh this a number of times. Started with a short put at 76, added a short call, rolled it from the 178 to the 49 day. So, I went from a $3 credit all the way
[02:34:44] So, I went from a $3 credit all the way up to a $13 credit now uh at the 78 strike, and just yesterday moved it from 76 to 78. So, you you have full uh flexibility in terms of the options expirations, the strikes you can choose.
[02:34:57] But yeah, the backwardradation here that we're seeing in these contracts is telling that the things are happening overseas, things are heating up and that more opportunity because these options are more expensive now relatively.
[02:35:11] take advantage of these moves in fall and skew too, right? I mean the calls least initially I don't know what they're doing today but and just trying right? >> Yeah. So let's let's hit them with some
[02:35:24] some takeaways here. >> Yeah. So again, one benchmark, two sizes is crude. We, you know, WTI crude oil, West Texas Intermediate crude, you know, consider the, you know, benchmark crude price, you know, globally. Um, and then
[02:35:36] both the CL and the MCL give you exposure to that. So obviously 1,000 barrels versus 100 and kind of just depends on your capital and and risk risk appetite really which one of those um you know you're you you'd be might be
[02:35:50] interested in. Uh supply and demand. Uh again even that you know we talk about geopolitical risk but that's you know supply risk right when when we have these you know kinds of things happen that's a risk to the supply and you know
[02:36:02] obviously the economic theory is supply goes down price goes up we're seeing uh recently um and then the options is is really important I'm glad that you you've brought that up a couple times the fact that there are options on both
[02:36:14] of these uh where you can define your risk in these you know in these in these products especially again uh when it gets so volatile Craig and I are about to do uh real soon that's going to be up on our Tasty Live
[02:36:27] YouTube page uh where we dive into some trades that we did using both of these both of these uh uh trading vehicles. >> Cool. Well, thank you Craig. Appreciate >> Great to have you as always. Uh yeah, EM is catching a bid here up 35. NASDAQ's
[02:36:41] up 360. We got Chris and Liz coming up on the other side of this. Uh so join us you're trading crude oil. My name is Mike. You can find me on trader Mikey B on Twitter, Jamal at Jamal Chandler as well. But stay tuned. You're watching
[02:36:56] Tasty Live. We'll see you on the other side of this break.
[02:37:09] every second that I work. And if I don't clear 145,000 by the end of the day, I'm >> Okay. [laughter] >> It's a cute dress. Where'd you get it? Oh, thank you. H&M >> $23 10% off sale.
[02:37:23] >> Probably not worth more than $4. No, that's too bad. Got to be aware of these >> Well, not everything has value. >> Everything has value. >> Go ahead and go for it. >> Okay. U caution.
[02:37:36] >> Feebleness. >> That's a sad one. $12. >> All right. >> What about us? >> Yeah. Do we have a price? >> Yeah. Two cents. We [snorts] should have
[02:37:49] >> Two cents? >> Yeah, we could have made a lot of money [laughter] >> Two cents. street. >> Exactly. I think that's more on you than
[02:38:02] it is on me. Lord knows I'm trying. Hey, you know everywhere. Take you for instance. Look at you. You're a young buck. What are you like 37? >> I'm joking. [laughter] How old are you?
[02:38:15] >> I'm 26. with your genetic makeup, you know, you're not putting on too much >> I think you could sell those little lady eggs of yours and make quite a profit online. But I wouldn't wait too long. Next month, those would go down big
[02:38:27] time, especially if they keep eating the way you're eating. I got to take off. H, >> Are you serious? >> Yeah. Hey, look. Can you get the check on this? I left my wallet in the car. I don't like to carry around bulky things.
[02:38:41] don't like to carry around bulky things. It slows me down.
[02:39:03] I'm Chris Veio. She's Liz Deer King. Liz, it's one of those days where I feel >> That's what I said. I was like, you got a skip in your step. You do one of those on your way. taking your kids to school. >> It there was a point last week where
[02:39:17] between the uh the roots and my oil positions, I felt like I was really on >> but we've since turned the corner on both the oil positions, Liz, I was able to Well, the roots hold on. >> Did you light your house on fire yet?
[02:39:32] in they are receding and they are dying. So, that's the good news. though, >> they're receding. Like I feel like it's of slinking back. >> Yeah, they are. It's like watch like
[02:39:47] better though is uh >> crude here which has had a miraculous turnaround today. Already now down 23%. I think that's the appropriate place to start here, Liz, because we just had Craig and Mike and Jamal talking about
[02:40:00] the crude futures. Big turnaround today, up over 80. But when it got to 80, I got out. I was at two days to expiration in a bit bunch of different positions yesterday. We got through my short 78 strike today. I was not looking that
[02:40:14] gift horse in the mouth considering how this market has been just moved so quickly by what's going on in social media. So much gamma risk. No thank you. Out. Save by the bell. >> It's so funny. You said uh you you had
[02:40:28] >> Yeah. >> So you held out till the bitter end. >> Yeah. No, I held from the decline from like 85 down to 68 and then just said, You're right. >> Sometimes you have the rules and you got
[02:40:42] it's not always 45 in, 21 out. >> No, but when you're at max loss, you lose that. You have nothing else. >> I love that. Exactly. Yeah. You're going off the cliff anyway. Why not do it? >> Correct. That's I mean, if it's
[02:40:55] left to lose, that's the only time it's an easy decision. >> So, I feel like this is I feel like this is a good starting point and a lesson because for myself, I am actually feeling like an emotional relief right
[02:41:07] now. And that usually puts me in a bad spot trading just knowing how I operate. already have some crew positions that are lingering that are a little bit I'm going to stick with those for now. But I'm not eager to jump back. And when
[02:41:21] I have a trade that puts me through this much stress, I want to like take a beat going to still do things in other parts of the market. But crude, I think that we need to say goodbye for a little while so my tender heart can rest these
[02:41:35] >> Well, it almost like crude oil. I'm just I'm just extrapolating here, but I don't you're a very logical you're a logical macroeconomist where this was these moves were based on I'm not saying nothing but something
[02:41:50] that is not in not in control or controllable or upcoming news events or some type of supply demand. So these moves have been nonsensical in your macro macroeconomic brain. Right. and and right and so like this is one of
[02:42:04] view the world uh your the way that you it's worth. My way of viewing the world is wrong frequently. Um but if you make you have to make adjustments to your process then so clearly I was missing a
[02:42:17] beat. I got in too early. I want to just reexamine my process for like maybe a week or so. >> Look how logical you are. I like it. I'm completely illogical. So I would be like now. How about now? Now how about now?
[02:42:29] jump back into just jump right back into the fire. So, pulling my best impression of Bill Murray and Cattyshack right now in my free time non-professional life. So,
[02:42:42] are. This is all true. All true. >> Um, Liz, we before we hop over to that at the end of the session for at least end of the Mike and Jamal session push higher here in the market as oil prices had come off. We're close to
[02:42:57] 7,600. The CPI report this morning was basically as good as it got. Uh no inflation in the core month over month. Perfect. I mean literally given the context of where we are kills the rate hike odds for July relief valve. Do you
[02:43:11] that CP has come to pass. Bonds have rebounded. Oil's off. Is do you have a topline index futures before we move over to >> Not in the top I mean topline index futures. No I did I did have a close
[02:43:23] happen. I'm saying spoos are going to end up 47. Where are we right now? go a little bit more. And Wars is now talking. I'm just checking the chat on that's been like a little bit of a catalyst to pop that little pop right as
[02:43:38] show. >> See, if I talk Worsh, it's too stereotypical. So I avoid it and let [clears throat] you be the macro person. >> I will let you know when is on PBS. How about that? [laughter]
[02:43:51] should get into confirm and send here because we only have about 10 minutes. morning as we usually stick to those four questions. As always, research four questions. As always, research attastylive.com. researchtastylive.com.
[02:44:03] can also put them in the chat on YouTube. Like and subscribe. Hey, first question here, Liz. The banks just kicked off earning season with a second straight quarter of 20% profit growth and the stocks barely reacted. I think
[02:44:17] highs. Um, when great numbers get shrugged off like that, what is the about expectations going into the rest of the earning season? Liz, uh, can I you mentioned something yesterday? >> Reframe.
[02:44:31] exciting start for the earning season. Do you extrapolate anything that the banks tell you about what's happening with tech, AI, any of the names that we markets? >> No. To to be honest with you, I mean,
[02:44:44] I'm I'm so so so basic, Chris. I'm such a basic person when I look at this. So, I know that they are the un un the boring start to the kickoff to earnings season, but what I like to see and and to your point JP Morgan is at all time
[02:44:57] originally all these banks, every single one of them, you'd see the headline and we killed it, we killed it." Everyone was down 2%. Every single one of them across the board. So, it just reiterates the fact that sometimes earning seasons
[02:45:09] good news is good news and bad news is good news. And sometimes it sometimes it of where I look at from it. I don't I don't I'm not looking any um surface value on this. I'm just saying how the market is digesting it um means that
[02:45:22] this could be a little bit more bumpy of an earnings ride saying that even if we enough. >> So that that's kind of what I'm looking at. Sometimes you'll go into them where there's just irrational exuberance all
[02:45:34] over and whatever we say the mark it's just going to skyrocket and I don't feel into this earning season. >> And in fairness, uh the market has turned around since this question was submitted here. Um, you know, we we put
[02:45:46] out a trade idea this morning when the the pre-market, right after the earnings came out. I do this little scan. We talk about it yesterday. I like finding dips market, it's finding stocks that are below their one-mon moving average but
[02:45:58] above their 50. This morning, JP Morgan met that criteria because >> Oh, >> which is a bummer because it would have we've been able to take it off by now because it would have exceeded 50%
[02:46:12] Hope hopefully some of the folks were able to get filled. If you were on the morning show, it was the uh August 21st 3:15 310 put spread when the market opens. Uh it just didn't work for me, but that would have worked out nicely.
[02:46:24] home because I was listening now, what is it that you that you were scanning the list? Because I remember you saying JP Morgan's on the list, but I don't know what the list entails. >> Sure. So, every day I do a little bit of
[02:46:36] a technical scan. Um, it's looking for a stock that's below its one-month chart, but still above its 50, >> which is to say that it's experienced a short-term setback within a broader uptrend. And the broader uptrend is
[02:46:48] should start to think about layering in and buying dips in a controlled fashion. >> every morning. >> Every morning. And then how do you feel that this has worked? >> I mean, on paper, it's worked out
[02:47:03] perfect, [laughter] but I didn't get filled. So hopefully out this morning. Yeah. But it was, you know, it was risking four to make one at So >> Chris, my what my favorite thing that
[02:47:16] you do is you actually have some technical analysis behind why you're lay layering a high probability trade on top of it and that's when I think things >> Right. And that's I this is how I personally found success using
[02:47:29] >> to figure out the most cost-effective way to express my I want to stay along Liz, we only have a few minutes left here and we could talk forever, so we need to keep this train going. Second question here. Why would you place S&P
[02:47:41] markets are this wide instead of waiting for regular hours? Is there ever an edge to getting in early or are you just paying the spread? question live this morning and I I love it. Like like I said, I'm a huge fan of
[02:47:55] being able to trade the S&P. I think post market given earnings season is think about what's happening here is the market is closed. These options are still open meaning that you're going to get some big dogs. Let's say Nvidia has
[02:48:09] earnings which they're on deck, right? Nvidia releases earnings at 3:15. You and they're a big portion of them. So you can set yourself up and still get out of get out of things. So I think the after hours are pretty important. I also
[02:48:22] morning. I like waking up in the morning and looking at my SPX. It does take a little bit of more options knowledge because it isn't as clear-cut um where a little bit of math or understand how options how options work. That brown bar
[02:48:36] isn't isn't the brown bar that it that it that it normally is pre-market. But I I know this I like options. I think they are a little bit wider in the morning, but I let it come to me. I'll put an order in for my normal downside broken
[02:48:49] I let it come to me. A lot of times I'll need a little bit of a down move to get understand that. >> Yeah. I mean, any thin market, right? If spreads are going to be a little bit wider. The chain is not going to be as
[02:49:03] >> but that's for anything. It's not just for S&P. >> No. And so, right, whatever you would do in those kind of conditions for anything >> Well, I don't know. I mean, I know the futures options can be the futures
[02:49:16] anything else that you can trade options in. Like you with [clears throat] IBM down this I'm just using IBM. So IBM opened, you know, down 20% this morning. until the open. >> Nope.
[02:49:29] >> I I think it will be fascinating when all that stuff starts to open up earlier and earlier because it's there, right? Down he happens swift and people want to do things in it. >> Yeah. And then they're forced to chase.
[02:49:41] >> Yeah. Right. And so then you get that continuation down 26% right now. this I was with someone doing for a trading trends interview at the end of May where they had just got long near 220 and like it had run up 100 bucks in
[02:49:54] the five days from their trade on. And so curious to talk to that guy again. >> Although he did we did the interview from his castle in France. I think he's all I think he's all right. [laughter] I think he's all right. Liz, third
[02:50:08] question here. Uh this feels like a good run for me. >> This is equity market equity equity options technically expire at market close on Friday, but I've heard the actual exercise decline is later that
[02:50:20] evening. How much time is there really between the options stop trading and a move after the bell still get me >> So I think the NASDAQ rules still state that the trading can continue. I think
[02:50:33] it's 5:30 p.m. Eastern time, Liz, right on expiration day to make a final uh exercise decision. So there is that that is true. Um you can stick around after is true. Um you can stick around after hours so to speak. Uh I think Liz the
[02:50:47] going into that expiration window the OC standard process is that if a position is at least one penny in the money it automatically gets exercised. So you do you got to consider the clock. A move after the bell can matter. Uh
[02:50:59] particularly if it's going to be in something that's NASDAQ related and you don't want to get caught on the wrong side of it. So yeah, 5:30 p.m. you got getting assigned stock that you thought you were clean and free of that.
[02:51:13] >> Yes. And those are technically the answer is yes, Chris. Like you're 100% to be worried about it. Right. So there's >> Yes. That's what I'm saying. So technically I don't want somebody to be
[02:51:25] even when the market's closed, I could get exercised or assigned." There's people have got I've gotten and it's and it's a wheel really sometimes when there's no if the extrinsic value is still in there. So I've gotten I've
[02:51:37] gotten exercised ear early and it's it's to my benefit but it's it's just a giant wheel. Like I don't want those those that the weeds to deter people from >> Oh no. We don't let the weeds stop us from doing anything around here as as
[02:51:51] we've come to learn. [laughter] >> Sorry. Too too too soon. >> It's a little a little close to home, right? I mean, listen, my the general I'm not willing to risk assignment, I close the position before the bell.
[02:52:04] >> That's it. Because a a company makes an announcement after hours and the stock you wake up on Monday morning, you're like, "Wait a second. Why am I long 200 shares of Tesla?" >> That doesn't make it did. Oh. Oh, okay.
[02:52:17] >> Yes. No, I No, that's a that's a that's a valid point. I just don't want people to get too deterred by that. It can it happen? Technically, yes. But I believe it's after hours, it's not the automatic one penny. So, I want people to be very
[02:52:31] >> Sure. Yeah. >> Uh, know the rules, no one want to break >> Liz, final question here. Uh, yeah, I think this is a good one for me, too. If neutral [laughter] if delta neutral profits mostly come
[02:52:46] come from time decay, does that mean the strategy only works in low volatility neutral and still profit when volatility spikes? spikes? >> Yes. Uh time decay works right if stable
[02:53:00] volatility even a spike in volatility uh can be absorbed if you have your strikes that's really the ultimate consideration where you're setting your strikes on directionally neutral trade will determine whether or not you have the uh
[02:53:13] shock absorber in the event that there's a big V swing. So, I you don't get paid as much of course in low V, but you have to be willing to give a little bit more slack because things can accelerate. So, um
[02:53:25] um yeah, I just mean go smaller, go wider. spikes. It's it's a detriment to you when you're neutral and then volatility high volume environments and hope for a decay or a decline in volatility.
[02:53:39] the mismatch between implied V and realized V at the end of the day. So on. The IVs can stay high, but if the market gives you low realized V, that's fine. If the the low expected V and low realized V, fine. Even if expected V
[02:53:53] doesn't exceed your short strikes, you're fine. So that's why that's why I augment these views because if I can see like there's a big options level. Oh, times as much open interest in that strike than any other strike nearby. Oh,
[02:54:07] several tested several times over the past four months. Maybe it's support. two perspectives. >> I like it. I like it. Speaking of open it up and you always have all the information. Um, I'm going to go to the
[02:54:22] >> If you don't mind because we have a minute left. >> And where do you think where do you think the most SPX 0DTE volume has traded today? Give me a strike. And I'll say calls. I'm not going to make you get
[02:54:35] >> 7600. No. Right where we're trading right now. >> Right where we're trading right now. 65 >> 75. It's the biggest volume. >> Biggest volume on the board right now.
[02:54:49] >> Isn't that crazy? And it we're so calls over puts today. So I kind of look I I there there's clearly I'm sure better ways to do this. Which is trading more? calls are trading than more puts and today is a for is a clear calls over
[02:55:04] that's a great point here. But you have a market right now with you know pretty surprised between wars speaking and the CPI report and the bank earnings only at
[02:55:17] 636,000 contracts traded right now >> all over the world. We all calm. Is close? >> There's one that I think we care about.
[02:55:29] not. >> No, I don't think there is. I think the next big one is Netflix, right? >> ASML has got to be up there. That's >> Oh, that is that's a big one then. Yes, ASML.
[02:55:42] >> And just taking a look at the options chain here. $132, $178. So, we're move through the end of the week, which is obviously bigger than JP Morgan, have to get Yeah,
[02:55:54] $1,700 product, so it's going to be a bigger move than those. >> Yes. And the funny thing about ASML is that it fits my criteria for my scan this morning. A bunch of these uh stocks that so I need to get on this and look
[02:56:07] at here in a second. >> Would you preempt it or do you have to your criteria? >> No, I I'll I'll take the trade here. Um >> Pop it in. What we do? >> What can we work with here? This goes
[02:56:20] >> What can we work with here? This goes like 20 40 bucks wide. This is a big not where I want to be right now. Below, 1700. That's for a third of the way to the strikes with this this big of a contract? The
[02:56:35] your shortest thing you can do is 20 $20 wide. That's that's wide. >> Yeah. Can we go a little bit below there Can we go a little bit below there though? 1680. Uh yeah, let's race chip.
[02:56:47] This is a big trade, but it fits the criteria. Liz, you got to fan. >> I'm gonna jump in with you. I'm gonna go to the 1700 level, though. Okay, below the 50-day. Let's see if it holds.
[02:57:00] >> Liz, here's an idea. The companies that are making all these semic these memory supply, they need to build uh more factories, right? Who makes the machines that go into those factories? ASML. >> Oh, there you go. Good plug. [laughter]
[02:57:16] been concocted for for lesser reasons. So, hopefully it works. Hey, Liz, that for confirm and send. Send us your trade ideas at researchtastylive.com. them in the YouTube chat at any point in time. Make sure you like and subscribe.
[02:57:32] However, uh Gus and Errol, they're coming over to man the ship and take us into the afternoon session. Thanks for sticking around. You're watching Tasty Live. >> Happy trading, everybody.
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[03:02:03] back to Risk and Reward. Today's Tuesday. Uh we got a lot a little bit of are waking up again. Uh they're kind of peeling off of uh the previous highs but we've got a lot of volatility in the
[03:02:16] what you're trading, how you're managing your positions here. Uh the market Oh, and before we get into it, Brother Gus, how we doing today? I was I was >> No, you're good. >> Yeah. How we doing?
[03:02:28] uh yeah, we got got bank earnings kicking off earning season kind of keep us uh very entertained for the next few weeks here as as everything starts to go off. Uh yeah, we'll we'll get into the mag seven. Obviously, a lot of lot of
[03:02:40] big market makers happening in that one. So, uh you know, it was and then the interesting. It was like it looked like JP Morgan was going to open down and and I couldn't figure out why it was going to open down. It didn't it didn't
[03:02:52] really good. They had a tiny miss on like commodities trading. Um, but yeah, really wasn't uh wasn't a bad earnings call at all. I mean, look at look how yeah, it was it was set to open lower, did open lower, immediately ripped
[03:03:06] higher. Uh, strange confusion going on with with some of the banking names this morning to me. Um, but everything seems to have, you know, settled where where >> Yeah, Jamie Diamond seems to be a happy man this morning considering some of the
[03:03:18] knew and understood what was going to be be reported anyways, but I guess a good today. I know IBM sold off a little bit today. I'm not sure if that's still reversing. So, I guess we could touch base there as well. Uh, but yeah, Baker
[03:03:31] earnings shaking things up a little bit in this in this market environment. Um, go ahead just dive straight into the TC platform. Uh, check out what's been sitting a little bit low right now. Um, and it's kind of funny. We have the
[03:03:43] NASDAQ market pulled up right here. Uh, and it's it's an interesting spot, right, Gus? Because I mean, NASDAQ is trading its high around 31,000. We put trading its high around 31,000. We put in a low around 28,460 on NASDAQ and now
[03:03:55] we're kind of just funneling into this range right now. So, uh we haven't had whether we're going to get another all-time high or if we're going to sell off and make new lows. Again, I'm not one for, you know, chart patterns, I
[03:04:09] guess you could say, for the most part, but uh we can kind of see this funnel, right? These these ranges are getting smaller and smaller and smaller as each day goes by. So, uh, you might think we might get a break in, uh, in either
[03:04:21] going to be. Um, and with that being said, going into the portfolio, we don't little bit with the oil market yesterday. Uh, oil gapped up and continued to run towards its highs. We had some levels marked off on that. Uh,
[03:04:34] so we were getting some short contracts on there. We were short three contracts. Uh, whenever we sold off into one of the lows, we decided to take two of the bed as well. So then we put in a stop loss at the highs just in case oil makes
[03:04:48] another high. Uh and we wake up this morning and oil started to be a runaway already a little bit trying to pull back here now, but the oil is definitely in play. It's it's difficult to figure out um I guess the long-term direction of
[03:05:03] the oil options are in backwardation right now as well. We can check that out on the options chain. Uh but again, Mike just really pressing in on how we're going to be experiencing a little bit more volatility in this market. Um, but
[03:05:15] downside. So, we'll see how long it takes to get there. Oil can just be such Gus. I remember my first year trading oil. I think it was 2021 maybe with Tasty and I think that was when oil went to like zero. Negative. Negative.
[03:05:30] but it's one of those things it can get really hot in the kitchen really be number one here. >> Um, but where does oil rank on your list it kind of just like a byproduct that I'll keep an eye on just uh kind of see
[03:05:44] a product you like? I kind of stayed away for it quite some time. >> Yeah, I I think we're very much into the um you know I don't we're very much into now. >> I don't I don't like it just here in the
[03:05:59] middle off these levels. I don't like trading oil in general. As I've said general because it's it's so Yeah, I mean it's just it's a news asset. like it is it is a purely news-driven thing and treating the news is not a strength
[03:06:13] of mine. It never has been um or or trying to predict the news or to predict macroeconomic events, geopolitical things that that we're right now. It's just it's never something that I love to get involved
[03:06:26] with and particularly now coming off the bottom just kind of sitting here in no that we've put in. That's the thing, too, is I I would love to sit here and I just said, oh, we're sitting in no man's land. This range, I don't know
[03:06:40] which way it's going to go. Support, resistance, yada yada yada. None of that like to trade it in the first place is literally none of that matters. What what matters is supply and demand and the geopolitical situation and how that
[03:06:52] is influencing that supply and demand. And that's just not something that I want to keep up with 24/7. It's like a whole separate job. I can keep up with what's going on in entire sectors with with good fundamentals and earnings
[03:07:05] calls and PE ratios and all of these things to, you know, help try to uh make some sense out of what's happening. And then oil just it always to me has just felt like this this foreign thing. It feels I mean oil like it's it's so
[03:07:17] alone in this belief or not, but oil just feels like forex to me. Like it different that I just do not know how to handle. So, I tend to stay pretty hands well coming off of these lows. I still have the shorts on that I tried to put
[03:07:31] thing. I don't know why do I even have them? Why why did I try to trade oil in shorts continue to burn me. Still have like 180 days left the shortest on those on, but that will remain my only exposure. I'm not looking to to dive
[03:07:44] >> No. Yeah. I mean, whenever we come to a resolution and to the point that you made, it's so headline driven uh and it's such a volatile product. So your contracts. I mean, we started trading at around 80 in just like 4
[03:07:57] days, 5 days. So, I mean, we could be right back down to those lows. And I downside, but to the point that you made, it's it's it's very headline driven. It's going to depend on a lot of these resolutions that we could uh maybe
[03:08:09] get from a geopolitical perspective. Um, you get random tweets, you get random randomly tweet something about Iran, like randomly, and it'll it'll move the entire oil market. So, with that being said, it's a super sensitive product.
[03:08:22] mentioned, does the chat trade MNQ or MEES? I'm curious uh if you guys want to drop in the chat, do you prefer MEES or with Mike and Jamal, they think it's funny that I quote the market in NASDAQ
[03:08:36] terms because I understand, you know, S&P 500 is usually like the default. So, bit of a shift or is it just kind of a generational thing or depends on the 500 person. >> Yeah, I thought you were going to say
[03:08:49] Russell. No, no. I I like to No. I I generally like to classify things in in generally like to classify things in in S&P terms or ES or MEES terms. Um but I NASDAQ terms, especially in this day and age where it feels like the NASDAQ is or
[03:09:02] you know, tech companies are are what's driving the market, which obviously is NASDAQ. What's going on everybody else in chat? Ranch, Christopher, good to see all of you. Big deal. Already mentioned um happy to have you all here. Ranch
[03:09:16] in USO for the August 21st expiration 103 108. What do you think? Is it a favorable trade?" Feel there's good time. Speaking of oil. Yeah. Um I I I like it. I I I like it. USO, what was it 119 when I just looked? Um I I think I
[03:09:32] there. And I agree with this thesis that you provided later. Oh, I actually was I was [laughter] I was assigning that word to it, but I see you said my is going to be over in a month. The way things have been going. I I I agree. And
[03:09:45] it's not even like Yeah. It's just It's not going to be totally over by any stretch of the imagination. I It's just We're just in this weird like this weird thing. We're we're we're dragging it out. Point is I agree with you, Ranch. I
[03:09:59] I'm not surprised if we're still dealing with this at the end of the year. Like just >> it's an abusive relationship. It feels like it's never going to end. And yeah, I I don't know. If I were to trade oil
[03:10:11] right now, long would be my bias, but I'm not I'm not gonna get involved. involved a little bit at the bottom of that move and then scaled out of the long delta, but now it feels like oil has gotten away a little bit a little
[03:10:23] to get long again. So, I'm going to be patient on it. I'm hoping for some type of turnaround, but maybe we get a 130 USO, 140 US before we do that. I have no idea. That being said, I have no position on an oil right now. Uh would
[03:10:36] but got to wait for the dust to settle a little bit more. So, with that being said, I guess I would rather be a little bit long than short at the moment, but a finger. So, we'll keep an eye on it.
[03:10:48] managing it. Uh, but we will continue to, uh, keep up with it. SpaceX trying to turn around a little bit here. This has been one of the most disappointing post IPO moves I think I've ever seen. I'm not a big IPO trader, but um based
[03:11:03] off of what we're seeing in SpaceX relative to the hype that we got prior to the IPO, I don't know if it's panning out too well. I know SpaceX trading at 142 right now. Hit a low of 137 just yesterday. Um trading below the IPO
[03:11:16] lackluster in there. It's up a little bit on the day. We have an out of the in about 38 days left till expiration. Uh don't have too much weight on this ride, see what happens over the next 40 days, and you know, we'll manage. Um,
[03:11:30] and outside of that, we tried to trade a little bit of QQQ. Uh, it was a break on the market. And if I can bring up this order chains here, uh, you can kind of see we we bought the contract at 325. Um, and then we ended up selling the
[03:11:43] contract back at 325. The the market reversed off of the lows. We're up 100 something bucks on the position, put the stop loss at break even, and that market next like 10 minutes. So, it's an extremely volatile market that we're in
[03:11:56] type of decisions in terms of managing your positions whenever you have some directional move on any given position. But with my portfolio, oil, QQQ, SpaceX, more on into the portfolio. Uh we'll quickly check out to see how IBM was
[03:12:11] kind of been top of your mind here, Gus. >> Yeah, SpaceX SpaceX is an interesting >> Well, I mean, >> let me pull that. >> It's just funny. It's It's what I said the whole time, right? SpaceX as it
[03:12:25] stands right now currently sitting at a $1.874 trillion valuation. >> Yeah. 1 1.8 1.87. >> Yeah. So 1 1.9 1.8 trillion. We're we're range. Uh for reference, almost exact same size as Broadcom right now. Uh you
[03:12:41] decimal place. Well, in the trillions to to differentiate between them and size as Broadcom as it stands right now. But I just think it's so fascinating because it's it's what I said the entire time with SpaceX. You have you're
[03:12:57] talking about a nearly $2 trillion valuation at IPO. All of the greatest financial minds in the world can't wait to get their hands on this and help of this company and get the IPO right. And those greatest minds in the world
[03:13:11] say $135 a share is the price. >> Then the market says $150 a share should know, we fly up and I mean, we were over 200 there in the third day. Uh 225 was
[03:13:23] was when we put the the very top in uh 22564. Then suddenly you blink and two weeks later yesterday we we test we 13678 is the low yesterday. So we we very much test that 135 level. And it's just what
[03:13:38] with with these with with smaller companies that are that are going public, you can sometimes get these these parabolic runs off IPO and it can be somewhat believable. If a if a hundred billion dollar company, even
[03:13:51] for an IPO. We get lost talking about how gargantuan this this IPO was. The billion. So if you have a company that that IPOs at, you know, say $5 billion,
[03:14:03] I don't think it's unreasonable for that company to run into say 15 billion post IPO and it might even be able to hold those levels. You can sustain incredibly high forward PE ratios when your valuation is, you know, sub sub10
[03:14:16] can see you sustaining those things. because we saw Palunteer do it forever. But Palanteer did come apart eventually, obviously. But when you're talking about obviously. But when you're talking about a $1.75 trillion IPO, how much wiggle
[03:14:31] how many hundreds of billions of dollars? Can you really expect that to about. If we saw 10% growth off IPO, that's $175 billion out of out of air. billions of dollars can we expect to feasibly add and and hold on to with
[03:14:47] think it's interesting to to see the way that this has panned out and that we really did test that original original 135 price and and we are hovering around what 5% above that level right now. Almost there.
[03:15:00] >> Um, so yeah, at the end of the day, it's just I I I said a bunch of times, you know, do we really expect the greatest financial minds in the world to be 100% it's this great growth prospect? It >> is an anomaly, right? Anomaly IPO.
[03:15:14] large. It's not your your your not even a $20 billion Saudi Ramco or SKH Heinix, it's a $2 trillion IPO. So, if it were to 2x, we're talking about SpaceX suddenly being the second biggest
[03:15:28] when last time you guys have checked, but I don't have anything from SpaceX in SpaceX computer every single day. We're talking about them competing with these, you know, daily products that Americans,
[03:15:42] the whole world has and has to reby every three years with your Microsofts, your NVIDIA, your Apples. So, obviously, I I think that they can justify the that they might take over the entire world. I'm not surprised if they're the
[03:15:54] first company to 10 trillion at some point, but it's just really it's a tall ask for there to be too too much growth off that IPO and for all of these people >> It is. I mean and it's a good take and it does seem that in hindsight now
[03:16:06] towards that 135 that you were mentioning there that after the IPO everything above 150 everybody was used as exit liquidity. It almost does seem anybody that was buying the hype above 150 um you know and and we knew there
[03:16:21] were some of those parameters where after a stock exceeded a certain a able to exit some of their shares that they had uh retrieved on IPO. So anyways good take. Uh, I think it was just definitely overhyped. I was a little bit
[03:16:36] surprised to, uh, see it just completely die like this. I think the volatility these, but we'll keep an eye on it. Uh, got a little bit more time on the It's going to be interesting to see how
[03:16:48] we respond around 135. Uh, but we'll see whenever we do get there get there. >> What else is Christopher just Yeah. Put puts this in a very good term. SpaceX is priced into the market. The company loses money hand over fist. And yeah,
[03:17:01] valuation. And yes, I agree. The speculation, all of the inflation, all of that is is priced in. And I and I just say again, you know, we're we're talking about the the the greatest minds from JP Morgan that are working on this.
[03:17:15] these things? Like they're they're not going to ever be that far off. So, uh, anyway, yes. To to quit beating a dead horse, IBM, you mentioned. Yeah. >> IBM. Holy cow. Uh, first of all, first first and foremost, we start.
[03:17:29] >> Yes. First and foremost, I'm getting long IBM. That's that that's that's what to. I'll lead with the headline, I'm going to get long IBM off these levels. I I think that this is obscenely low for IBM. And the last time I got IBM, which
[03:17:43] we got we got plenty of time. I'm not too concerned at this point. But last time I bought IBM, hilariously, was at 215, like this exact price. And it quickly ran straight up to to 300 after that. Uh we've obviously sank back down
[03:17:56] now. Um they took this tumble. They issued a warning for their second quarter earnings saying that the AI boom is squeezing their software budget. Uh and it it really compressed these shares obviously. Um I wanted to I have too
[03:18:10] many tabs open. Uh yes. Uh they gave a profit warning ahead of their earnings infrastructure results and slow response to shifting market conditions. So they basically said we're going to miss guys. Change these estimates. This is this is
[03:18:24] >> I'm going to push a shove here. Yeah. So, even then though, I mean, and even if this 25% move is justified, I'm just always happy to take a shot on a company
[03:18:36] that's too big to fail in the AI space off a 25% down day. It It feels like a >> 26. Give it a couple extra seconds. >> There you go. There you go. 26. You're right. I saw I saw and and I This is, you know, I I I joke about the guy a
[03:18:49] lot, but I saw Jim Kramer coined a term today. Uh was that Pavlavian trades. Okay. It's a trade where as soon as soon as you see the signal, it's an automatic dog's eating food. Okay. It's like, yes, as as soon as you as soon as you see
[03:19:03] that you see and as soon as you see it, you're taking the trade, brain dead. And this is a Pavlavian trade to me. as as soon as I see a company a top 50 largest company in the world well entrenched into the AI space the the first movers
[03:19:17] on AI back in the day need I remind you uh take a 25% hit like this come down this is very attractive good support at there's there was a bounce at 220 in the past as well there's been a few bounces
[03:19:30] there actually um we're we're below historical supports we're talking about world with a firm grip on the AI space and here's the interesting part. What if there's a good chance that that happens, too. What if IBM it really only comes in
[03:19:46] 20% lower than everybody thought and all of a sudden we have to make a 5% move almost like the earnings just happened. This is that this is a post earnings overreaction and and take the opposite direction. Uh and it's almost like the
[03:19:59] warning that they just issued. So, I feel like I'm just going to be first could the earnings really be this much worse? Could Could the earnings really be so bad that we moved down further off these levels? I see that as unlikely.
[03:20:13] So, I'm happy to to take a shot and and double down on my IBM longs at this >> No, I mean, I like it. I know it looks like today alone has more volume traded than I think like the last two to three years than IBM has seen. And I'm not
[03:20:25] going to lie, uh IBM was never an attractive stock to trade. Uh just from about the volatility and options, but just from a price standpoint, the ranges the last year, it seems like that's a different story. Uh, but it's kind of
[03:20:37] crazy to see such a massive gap down. I know just a few weeks back we had seen a about 330. That was a pretty crazy run for something like IBM. And then to see a gap down like this, a continued selloff uh is also pretty crazy, but
[03:20:50] we'll see how it pans out postr run. I like it. Yeah, the uh the initial run in IBM was hilarious. I I told one of uh another employee at this company who does not appear on the show or social media or anything, but uh asked like
[03:21:03] what came over to our side of the office one time and was like, "Hey, what what be a what might be a good buy right now?" Um and Mike was like, "Oh, I think Mike's Mike's been a Microsoft bull for a little while. And I was like, "I
[03:21:16] really like IBM." And this was this was the last time it was at 215. Uh this would have been in May, like early May. Um and I was like, "Oh, I I really like IBM." So, she bought it and then literally a week later it was it was at
[03:21:29] 270 and she was like, "Oh my gosh, what do you like next?" And I was like, "I am prediction ever again. Sell this when it hits 300 and that's it. We're we're done. I'm leaving on this high note. There is no way I could ever relive up
[03:21:43] to this expectation." Um, but yeah, I I I'm expecting a a similar not not as quick as we saw from May into June, but a a similarly quick return to the highs. this is an overreaction. Yeah. No, I like that. You're telling me humans get
[03:21:57] [laughter] sometimes. No, it's certainly reflected in the stock price. So, that's move like that and then it shoots up to 300 in like 3 days, 4 days. Insane. is top of mind in the portfolio? What do you got your eye on?
[03:22:12] >> Uh, just got Phil on IBM. I I went for the I went for a 245 250 short put vertical. Uh, that is uh 94D October 16th cycle. I'll get this posted as as soon as I'm uh off my soap box here. Um yeah, SanDisk making a nice little
[03:22:26] recovery for me today. Kind of quietly. >> Um but taking a taking a move back in the ninth. >> Little little 5enter want wanting to give it back today. We'll see if it can manage to hold on. Um but yeah, happy to
[03:22:38] move in the in the right direction for me and hopefully we can get some continuation there. The memory names always so fascinating. Can a can a show run like this. I mean,
[03:22:50] >> criminal to not talk about these names. Um, again, I'm curious to see if these if the top is put in. We'll see if we can rally to another high. I think the still there, but it is funny when you zoom out over here. I mean, good lord.
[03:23:04] Uh, this chart is starting to look pretty steep over here. Um, a nice necessary. Um, it's looking like right now volatility has been coming in a look at the NASDAQ market. looking like we're trying to sell off a little bit
[03:23:17] more here again. Today's been such a choppy day in the market. Uh if you're a scalper, we definitely have the ranges in there. Uh but on a CPI day, things waters. So, we'll keep an eye on it. Uh we were looking to get short another
[03:23:30] be patient. Um but that's all that's catching my eye so far today. Um as we look into this watch list over here, let's go ahead and check out uh Spurs check out some of these names that we were tracking as they were at their
[03:23:44] their highs a little bit here. I know INTC was one of the most popular names story, kind of a gap up today. Uh selling selling back off now trading at around 106. Let's go to a higher time frame. See,
[03:23:58] But yeah, now these memory names, it's like the same same story, just a behavior, but essentially the same type of movement that we can see on some of these names. Uh getting back into the watch list here. What else do we got?
[03:24:11] Let's see. What else do we We got Dell. Uh Dell's been pretty exciting. Let's skip to that one real quick. Uh Apple making another all-time high yesterday. Uh looking like we have a pretty fat wick at the top of
[03:24:25] this move. So, giving back most of its gain into the close. Uh and then gapping >> I just found I just found a great Apple position in my portfolio. highs, I could have swore I was like I could have swore Gus got long. I was
[03:24:39] than me. I'm just discovering this. When you said Apple, it like jumped off the Apple? This is going to expire from max profit. Giant winner." >> I vividly remember not putting on the long trade. I was like, "Did I not put
[03:24:51] I think Gus pulled the trigger on it." And then Apple hit a new alltime high position right now. Are you closing it out? >> Yeah, I'm going to go ahead and take profits. Yeah, I put this on uh when?
[03:25:04] June June 25th. So, yeah, like 20 days ago. Yeah. two two three weeks ago. >> I I have no I have no recollection of this. That's hilarious. I Yeah, I haven't done one ounce of management to this, but yeah, it's a 285 290 uh bull
[03:25:17] put spread uh that expires in 10 days. >> Doing nothing [laughter] move. >> Yeah. Let's see. Put this on uh for what 30 305 credit and I've gotten 290 out of it. Yes, I will say thank you. >> There we go. I love it. Nice move in
[03:25:30] Yeah. >> Back to an alltime high. hit I saw yesterday Apple hit 4.7 like their their first time hitting 4.7 trillion market cap. So another you know
[03:25:44] I mean dare I say small milestone but you know it's not a it's not a nice trillion for the first time. But yeah with the with the new alltime highs put in yesterday. It was their first time over 4.7 trillion. It has been a nice uh
[03:25:56] at 625. >> No, it has been most definitely. I think lot of these other big names that we look at. Uh, >> oh my gosh, I did bottom tick it. That's hilarious. This is just another one. We
[03:26:08] lot all the time. I'm like, "Oh, I'll give this a little bit of time. I If days, it is what it is." And then I just drill the bottom somehow. But yeah, the lows the the lows of these these local lows came through on on June 25th when I
[03:26:21] >> I love it. I was about to say, is it almost time to start getting involved in absolutely hit over the last week and a half. Uh, I'm going to be patient on it, It's tempting. >> That is That is tempting.
[03:26:35] a quick look at volatility here. >> Yeah, man. Screw it. I'll do the bonds position is really nice, too, because uh that was when volatility was a little bit more elevated uh on the overall market and then also the options itself
[03:26:49] on Apple. So, uh volatility absolutely getting crushed with vol trading at 1660 at a high of 23. You never know how good you have it until you don't have it But with that being said, we'll see what other volatility we get into the market.
[03:27:02] I I feel like the CPI release actually the CPI release was pretty interesting. I know we tried to trade back towards the data highs on the overall market and then we're continuing to sell off here. So, uh it's a pretty choppy ranging
[03:27:14] >> Um >> all right, the long bonds have entered >> MG went 31D. >> We got some long bonds in there. I love >> Looking for looking for over 85 uh 31D August 14th. So, it literally exact. I
[03:27:29] trade I did pretty much uh to to a te even including let's see TLT. Yeah, the even including let's see TLT. Yeah, the last one I did was 519 expiring July 17th. So, that was a little bit longer. That was like a more like a 55 DTE. Uh
[03:27:43] this one is is a 31 DTE, but is literally the exact same thing around the 85 strike again. So, I'm just going to Am I a bond trader now? Every time bonds drop below 85, I just bet on them and go back above 85. Is it Is it this
[03:27:55] one for one though, [laughter] so >> yeah, >> Yeah, I'm batting a thousand. Maybe I shouldn't do it. Maybe that's >> Um, a few just acknowledge a few more chats here before we uh before we give
[03:28:08] Apple, I hit 50% right away. I should have done that one. Nice. Apple Apple remember putting this on. We did we put I put that on at the SIBO with you and I was talking about how Apple was my first options trade. That makes it come back.
[03:28:21] That Apple Apple got me addicted. Uh, G& opened an iron condor on yesterday on SPX, 7,500 bottom, 7,600 top. Did the same la the same thing last week. Play been saying forever. This feels like we're re-entering a consolidation phase
[03:28:33] towards what we saw, you know, like what we saw towards the end of last year. I I now. Big fan. >> Um, I was going to say go iron condor on think VA is coming. That's a that's a good way to think about it as well. The
[03:28:46] inclined. That logic is definitely airtight. Uh, I just have a very bullish bias. I I I feel volatility is coming, but I feel it will be uh I I just think there's no way that earnest call could make things any worse. I I think there I
[03:28:59] think we have to have that priced in if not more than priced in. So I I'm content just getting long because I have that bias. But you're absolutely right. is coming but have no directional bias, Iron Condor is a great way to express
[03:29:11] >> Absolutely. I know >> Errol helmet cam POV on the MNQs. >> He says he wants you to wear a GoPro while you trade the MNQs. [laughter]
[03:29:25] with just a helmet on with a big old GoPro. Uh anyways, that's hilarious. that up one of these days. Uh but I know we got a quick comment as we wrap up here about gold. Uh not too sure about gold. I'm not trading it right now.
[03:29:37] at the high of its range. But what I did right here was I took the volume profile, fixed range volume profile. I put it from its highs all the way down to that swing low. You kind of see right here about 70% of the trading activity.
[03:29:49] one standard deviation range right here. You can see the market is spending most to break outside of this range, I could imagine we could have a little bit more of a directional market to the upside. Uh, and then an an opposing viewpoint to
[03:30:02] the downside. But, the market is spending 70% of its time between 277 and about 266. So, about uh about $11 range there. Can I do some math? $1 right from gold and silver. I know gold and silver hasn't been as much in play for
[03:30:17] little bit more at the beginning of the year. Um, but where it's at, I think trading within a range. Uh, but with that being said, we are running out of >> No. No. >> Spain or France? I got to ask you, Spain
[03:30:30] >> Oh, France. I I I actually bet a uh France over England exact today like in see things going here. Got four to one on that. Yeah, >> Yeah, that's uh but yeah, I think France France seems like the clear best team to
[03:30:44] defense is is is something, but I got two 2-1 France. It's my prediction. Are you choosing Spain or France? Let us know how you're managing your positions. hang out with us today. Be sure to stay tuned for more amazing content coming up
[03:30:58] next, and we'll catch you guys next time. Peace.
[03:31:13] best ways you can help us are by liking the video or subscribing to the channel. Either one of those guys would really help us out a ton. So, how do you trade a runaway bull market? If you're watching this video when it was released
[03:31:26] in June of 2026, it's like, man, this is the market that we are in right now. couple of downdrafts and what have you, but man, it has been incredibly strong to the upside. Well, the truth is our biggest risk as a premium seller is
[03:31:42] away from us. Whether it be to the upside or the downside. So whether you're trading a runaway bull market or a runaway bare market, everything we're going to talk about today for the next, you know, two or three or 27 minutes
[03:31:55] applies to both of those guys. So let's dive right in. Let's go to let's go through three things that you can do to help protect yourself against a runaway bull market or a runaway bare market. All right. So, daytoday I'm going to say
[03:32:09] you may or may not agree with me. The markets are pretty random and pretty about asset pricing, you start think about what's controlling asset price brownie in motion, you've got the efficient markets hypothesis, you got
[03:32:23] positive drift, you got your volatility shocks, you got all these different pointing to all right, there's a great degree, a high degree of randomness and unpredictability. So, a lot of the time the market's just kind of wiggling. It's
[03:32:38] just kind of waggling. It's just kind of moving around a little bit on either side. And that really helps us as premium sellers. And even if volatility it makes the premiums on the options that much richer. Still, it's very rare
[03:32:52] that we get caught in a runaway move that just has no signs of slowing down. But that does happen. you get that one-sided move where it's just wiggling and no waggling or it's just zigging and no zaggling. And so what do you do in
[03:33:07] that scenario? Here are three things that you can do before you ever put the trade on. The first thing is your position size. The second thing is your capital allocation. And the third thing is going to be your strategy selection.
[03:33:21] Because remember what price does daytoday, it's out of our control. So we need to focus on what we can control. We need to control the controllable. And in my opinion, position size, capital allocation, and strategy selection are
[03:33:33] all within our control. And all of these things happen before the trade is even live. So number one, first and foremost, is going to be position size, right? Everybody wants to talk about, Jim, how
[03:33:46] do I hedge against a big move against me? How do I hedge against a big drop or a big pop or whatever? And my answer is always the same. It has to begin with position size. This is the most kind of organic way that you can hedge against
[03:33:59] things that move against you by controlling that position size on order entry. You want to be small enough such that it frees you up to do whatever you want to do later on. Like if you want to later on and add on additional hedges,
[03:34:13] kind of lean into the position size and let the position kind of, you know, meander off into the distance, you can do that too. But if you are too big on entry, it really just kind of handcuffs you in terms of the different things
[03:34:25] that are available to you and at your disposal. So position sizing is number money premium sellers, right? We're selling 30 delta, we're selling 40 delta, whatever. But once that position spills over to now where it's in the
[03:34:40] money, now the deltas begin to grow. So now they're not 40, they're 50. Now they're not 50, they're 60. Right? You've got a naked position on those deltas are starting to grow. So, what was a very small kind of innocent
[03:34:52] position at 25 or 35 deltas is now all of a sudden 75 deltas and it's going to feel a lot bigger than it was at order entry. And so, if you don't size on entry so that you're okay when the position does go in the money, I think
[03:35:06] you're doing yourself a huge disservice and it is going to show up at times when you probably really don't want it to show up. So that's why when it comes to position size, generally speaking, define risk, 1 to 3%. That's a great
[03:35:20] reference point, 1 to 3%. If you have a larger account, so let's say you're at 100,000 or more, you could probably even be below the lower end of that range. If you have a smaller account, so let's say maybe 10 or 12,000 or or less, then you
[03:35:32] might be actually above the upper end of that range. You may have to go to 4% or 5% or 6%. But 1 to 3% for defined risk is a great reference point. for undefined risk, three to 7%. In terms of your buying power allocation, again, you
[03:35:45] below the lower end of that range. You have less capital, you may have to kind of creep up to maybe 8% or 9% or 10%. I probably wouldn't go above 10% because, again, you want to be small enough on such that you can go ahead and manage
[03:35:59] the position objectively and do all the things that you want to do and think with a level-headed, you know, mind all throughout the process and not get emotionally charged up. So the second thing capital allocation right now cedus
[03:36:13] for all my Latin groupies that might be watching the show here today but you allocation when it comes to how much capital we're using obviously we're going to prefer less capital relative to more capital we would love to get where
[03:36:27] we're trying to go using less capital rather than more capital. I mean that goes without saying. I mean that's a given. But there are times when we might where we're trying to go. So, we might need to tick up when it comes to capital
[03:36:40] allocation. Just be careful that if you're concerned about guarding against a big move against you, whether it's to the upside or the downside, both would apply. You're always going to be better off if you have less capital deployed.
[03:36:53] And so, that's why generally speaking, we like to live somewhere between 25 to certainly times and places where you'll be, you know, above the upper end of places when you'll be below the lower end of that range. But if you are really
[03:37:07] and protect against a runaway bull market or bare market for that matter, I would live on the lower end of that range, maybe be around 25 to 35%. And then thirdly, the strategies that you select. So obviously, if you go define
[03:37:22] iron condors and diagonals and built-in mechanisms into the actual strategies that are going to protect you against runaway moves against you. they have kind of outlier risk mitigation
[03:37:35] built into the structure of the strategy because they are defined risk by nature. protect against the outlier moves against you. You have the gimme of the
[03:37:47] protection against that runaway move, but of course we know it's been said let me know if you know who said it. Put it in the comments below this video because it is a catchy catchy jingle. Very gimme there's a gotcha. So what's
[03:38:01] the gotcha? Well, one of the gosses with defined risk, in fact, I can actually think of two. Number one, you don't have the unfiltered exposure to the Greeks. the pure positive data. You're not going to get the pure negative Vegas. That's
[03:38:14] trying to do in terms of your Greek exposure. But then, number two, they're strategies are much more difficult to adjust if things do go against you and to maneuver a little bit. You kind of
[03:38:28] guys a little bit. much much harder to do with a vertical spread or iron condor or even a butterfly when it comes to the adjustments relative to undefined risk undefined risk strategy, a great strategy, which is my favorite strategy,
[03:38:43] is the out of the money short put. Right? Again, specifically if we're in a times you're like, man, I kind of want to participate in
[03:39:08] show. My name is Mike Butler. I'm here with Jamal Chandler, and it is Tuesday, July 14th. The banks just reported earnings, and we just got the CPI report down six and then I looked at the screen and now they're up 45.
[03:39:23] running today, folks. Things are happening. CPI is hidden. Um I need to I got such long deltas. I need to do um a super bear possibly here. Um we'll see.
[03:39:35] So, um yeah, I'm trying to figure out how to structure this thing, but uh wow, nice little move into the CPI print here. Things are running. CPI 3 and a here. Things are running. CPI 3 and a half% versus 3.8% expected. And uh X
[03:39:49] half% versus 3.8% expected. And uh X food and energy 2.6% versus 2.8%. So, you know, hey, yields are yields must be fading hard here, I would assume. And >> It was an incredible it was an incredible uh rip on the open. Humin's
[03:40:02] incredible uh rip on the open. Humin's up 35, NASDAQ up 400, Bitcoin up, 1100. up 35, NASDAQ up 400, Bitcoin up, 1100. Uh quite a move here. And the initial read was uh some of these banks were down this morning. JP Morgan, I had some
[03:40:15] call uh call calendar spreads. $2 debit though, so pretty cheap. Uh those are though, so pretty cheap. Uh those are down. JP Morgan's down to 326 right now. >> we will see how the banks react here, but the general market ripping higher.
[03:40:29] not a shout out, it's not a good thing, but IBM's getting smoked. Apparently, earnings until July 22nd and they pre-announced and stocks down 20%. going to affect some of the other semi names here. Um, but yeah, wow, things
[03:40:46] are moving. >> They are moving. We're at 7,600 once again in the ES. We were dancing around the other day before we ended up tanking around. >> Uh, but yeah, got it. Before Jamal gives
[03:40:59] us on the YouTube channel. We're streaming live there. Just throwing your trade ideas questions along the right hand side chat and uh we will get some rapid fire questions answered, trade ideas. Uh, lots to talk about this week
[03:41:13] in these markets. >> Yeah, for sure, man. Um, let's see. Um, so I'm looking at right now, uh, you said you got filled on a upside one, >> Yeah, Super Bowl. >> I got filled. Really? I I mean,
[03:41:27] unfortunately, I it was filled like a minute before the, uh, CPI came out. 728.50 uh, is when I was filled for 10-cent credit. Yeah. >> But yeah, it was a >> uh 7500 7490 in the one day. 7500 7490
[03:41:43] short put spread to finance the 7565 7580 15 point wide call spread. It's up 500 bucks right now. Uh with this strength in the market, >> I think uh we'll see if we can get a little bit out of this. But yeah, quick
[03:41:57] win so far. Uh maybe I'll maybe I'll secure it and move it up. I don't know. What do you think? >> Um yeah, I mean uh I don't know. Maybe >> Yeah, I think I might just get get out of this. Just if this thing fades, I'm
[03:42:12] >> Are you going to be annoyed? [laughter] >> So, let's try let's just try and get 550 out of this thing. Um I think I need to actually route that. Yeah, I misouted that. Got to do this for 24hour
[03:42:27] trading here. But yeah, we'll do we'll do a $500 credit that >> uh and yeah, up. It is interesting. The credits that
[03:42:40] different. Like I'm lining up that would normally be I feel like maybe a dollar credit. I'm getting $2 credit right now for the downside. That just doesn't seem >> Of course, we would have to fall >> about 50 handles from here for
[03:42:55] >> So 500 buck profit. >> Nice. >> Yeah. Yeah. >> I uh Yeah, I totally forgot that that >> I uh Yeah, I totally forgot that that the uh CPI came out right at 7:30. Um,
[03:43:07] but yeah, wild markets here. We had a bunch of banks report earnings. If you didn't see the news and insights tab yesterday on Tasty Live, you can always check that out. We've got a lot of written content coming your way uh
[03:43:19] there. But I wrote an earnings preview for JP Morgan, Goldman Sachs, Bank of for JP Morgan, Goldman Sachs, Bank of America, Cityroup, and Wells Fargo, and opened today. But again, I only had a position in JPM. Uh, two call calendar
[03:43:33] spreads, but a total debit of 200 bucks. This will be a loser on the open for sure, but uh I'll I'll just buy back these three uh three-day short options just ride out these 10 days. If we get a reversal, it could be a nice win.
[03:43:46] >> That's awesome, dude. I mean, that that um you got to love uh when you get a nice win at some point in time. >> For sure. Especially when my uh zero day Super Bowl yesterday expired 35 cents in money completely. [laughter]
[03:43:59] money completely. [laughter] >> So, not great. Not great. Uh but yeah, I think when we got uh when we got the E- Minis up, NASDAQ up, Dow is down, which was the opposite effect of yesterday. Uh the Dow seems to be moving in isolation
[03:44:15] the last couple of days. But let's bring on Chris Veio and see what he's got to say about these uh markets here with the banks down, rest of the market up. opposite day. >> It does feel like opposite day. That CPI
[03:44:30] up. Uh guys, do you know what the annualized rate of inflation is with 0% month-over-month inflation? >> It's zero. >> Is this like a damn CFA test with that? Don't do that to us in the morning, man.
[03:44:45] [gasps] >> Okay, but 0% month overmonth core market was anticipating, right? No one cares about the headline right now the past month or two, you got a 25%
[03:44:58] past week, what another 15% to the upside. So how how accurate is going to care about that actually has the energy input into it? Probably volatile. So causing a problem throughout the system, then it's going to appear in the core
[03:45:13] the first thing that we have to look to today, guys, if you want to go to the SR3Z6 contract, uh rate hike has effectively come off the board in the past 7 minutes. um we were leaning towards a second to 25 basis point rate
[03:45:25] hike this year. We're now back to just one. And that's probably going to be the most important thing about today's uh today's market that this pressure valve of potential two hikes and rocketing short-term yields. We just put a break
[03:45:38] on that trade. >> Craziness. >> Yeah. I think uh I I would love to see the CME Fed Watch tool uh and the the cumulative
[03:45:51] change over time. see where we're at now. Um because we've been just rising slowly but surely. What do you think of these uh the E- Mini and the NASDAQ kind of opposing the financials with the financials that have
[03:46:05] led us up quietly over the last couple of months and and a lot of these are down this morning. >> They are. I mean, if you're looking at Sachs, if it's uh Bank of America, if it's JP Morgan, they made a lot of money
[03:46:17] trading stocks in recent months. their uh their fixed divisions, fixed income, currency and commodities have likewise done very very well. But also this was a very volatile period in the markets. How how often can you replicate that kind of
[03:46:29] see what we just saw through March, April, and into May, right? Um probably you're looking at these earnings numbers, were these banks expected to do and I were talking about a potential
[03:46:44] trade in uh in City, for example, looking at the relative volatility in the banks actually do? Are these exciting things? What was it? Broadcom or Micron a few weeks back had a 14% plus or minus implied move. Cityroup was
[03:46:58] plus or minus implied move. Cityroup was around 3% yesterday. So, um yes, good numbers, but where do we go from here? So, short iron condor, I'm thinking 3 days to expiration right now. 146, 148, 136, 134. We're basically
[03:47:10] going to be pinned right at the center point of that. Uh I got a question for trades, Mike, and we did things that were directionally neutral to take pinned and you're at 3 days to expiration, how are you managing your
[03:47:23] immediately now that the earnings have come to pass or do you ride this into the sun through Friday? >> Um I would say if the markets are liquid and you're looking at over 50% profit, I would just rip it off. Um
[03:47:39] I think I think you might have a little bit of volatility that stays bid here, but it seems to be [clears throat] an almost exactly flat open here in city. Uh so you might you might actually get a bigger increase uh in the premium that
[03:47:54] you can capture right away because the neutral moves after earnings are really crushes just because the market's expecting some kind of move and you get literally nothing. Yeah, it just depends on the strategy,
[03:48:07] >> Yeah. I mean, this is a short iron condor. Yeah. Um I'm not really I'm not really a a uh you know, an earnings trader, so to speak. But for for some of volatility stocks, unless there is an enormous like almost material putting
[03:48:23] the business at risk, surprise, it's going to be difficult to move them. Um now, right? So there's not overpositioning and crowding in these names that could generate that type of violent girration after earnings. So uh
[03:48:37] but in recent weeks when I've dabbled a little bit in their earnings trades, the semiconductor stuff has gone mostly sideways in so far as like not working because the V has been so large >> late. Whereas when I'm
[03:48:52] doing it in like the boring stuff, the stuff that no one's paying attention to like the city groups, it seems to be working out a little bit better. at Goldman yesterday. I couldn't decide what I wanted to do. I actually tried to
[03:49:04] get in on a super bull trade um that would have started to really take effect would have started to really take effect above a above um 1,100, but I never got it off because things were so wide. But um I mean it clearly they did well.
[03:49:18] money. Things are going well with Goldman. So uh stocks making a nice hand moving a little to the downside, right? And um I haven't seen exactly
[03:49:31] what they said. I'm not sure what the reason is behind it, but um it's kind of fascinating when you see one a little bit delineating from the rest. >> JP Morgan's JP Morgan's trading. I mean, that was that was it. It was
[03:49:44] >> 86% higher, >> 6 billion on 2.11 billion more than analysts expected. So like again, how how how repeatable are some of these earning streams when they're tethered to a macro and volatility environment that
[03:49:57] a macro and volatility environment that was historic? You know, you got to probably not, you know, probably not sustainable. income when it comes to banks? >> Do we? Bank of America had a pretty good
[03:50:10] net interest income. Uh it was up 9%. Here they are down before the opening bell. So [laughter] >> this is this is the nature of earnings people. Uh you think you can nail it on the head and it still moves in the other
[03:50:24] >> Um but >> that's the thing. All the analysts missed today to the downside. All the banks beat expectations handily. Most of the shares are still down. [laughter] >> So
[03:50:39] >> classic reversal. Um, yeah, I think it's really interesting, especially JP Morgan to see it down, but still within the expected move. And the expected move in JP Morgan was only like 3%. Uh, just super low. So, the markets, the implied
[03:50:54] volatility was right in this case in terms of uh the realized move being less than implied. Uh, >> well, not so fast, my friend. It's not >> Not dead yet. It's not over. >> We still have about 40 minutes till the
[03:51:08] seen days where they're kind of flat like this and then they reverse or go lower or maybe reverse and go higher. Who knows? Uh I guess we'll it it seems like um everything is happening right at the moment because we walk right in. We
[03:51:21] the market. >> We got their moves, but uh I don't know >> Gentlemen, can I can I bring you to the JP Morgan chart here because I have a morning like what do I want to go shopping for today? And as a trend
[03:51:36] for stocks that have pulled below their one-month moving average, but are still sitting above their 50 and their 200, suggesting that a longerterm trend is still in place, but we're merely facing a temporary setback here. Um, my scan
[03:51:49] this morning has 16 tickers on the list. ASML, Birkshire, Citycat, GEG, Veronova, JP Morgan, Clack, LRCX, MW, Novartis, SAND, Sandisk, STX, TSM, and WDC. JP
[03:52:01] Morgan's on that list. It is a nicel looking stock. If you pulled up the JP draw a straight line across at the number 320, you would see that likewise a 50-day moving average is currently sitting at 3192.
[03:52:14] Uh that 320 number is basically the high that you have from April 21st. So coupled with a former swing high and a 50-day moving average, we're now in little bit of a pullback. This is to me an interesting place to look for long
[03:52:27] deltas for a swing back into new highs because if the trend is going to hold, this is the place where the trend should hold. So my I already have a city trade looking to fade this move in JP Morgan. Looking the 315 310 short put spread
[03:52:41] right now sitting at 38 days to expiration. Um I'd like to see a little bit more downward drift right now because this position it is a 68% I'd like to have my short strike below my 50-day moving average. But right now
[03:52:54] it's offering worse than a 4 to1 risk-to-reward. 407 risk to make $93 and only generating 89 cents of theta on a daily basis. So, while I could pull because they're five points wide and get that f more favorable risk-to-reward I
[03:53:08] want, I'd prefer to see if this market settles in before getting in too early draw down having just done through that through crude by the way for the past month and a half. [laughter] And I can't believe I unloaded all
[03:53:21] with you. I'm laughing with you. >> I know. I know. I can't believe I last two days at a profit [laughter] considering they were all max loss 10 days ago. So, but I I don't want to like I have a little bit of that scar tissue
[03:53:34] want to be biased and emotional about things. But 315, 320, 310, 315, we'll my shopping list this morning. >> I actually completely agree with you. the last couple of days about banks and I was looking forward to seeing if the
[03:53:49] earnings. Even if they did everything right, I want to get short deltas in here. I feel like this is an area to pay attention to going forward especially look CPI seem to have saved the day right now but let's be honest the trend
[03:54:02] feel like at some point there's going to already got a little bit of consumer defensive I want to get a little bit want to do it is either short puts or short put spreads
[03:54:15] >> yeah I think uh these markets are have been ripping higher and then kind of uh been ripping higher and then kind of uh fizzing fizzling out so this morning got fortunate 1 minute prior to the CPI, got the Super Bowl on, got the rip, and then
[03:54:29] it closed it. Uh, and we've sold off 10 points since then. So, maybe maybe this is kind of a fake out day where the markets meet the banks sell off because right now the banks are most of them are down with the E- Minis up. Uh, but going
[03:54:44] back to crude oil, it's been a crazy market. Three times in a row, I've had market. Three times in a row, I've had uh a position in here where I was exttrinsic value marked loss because I had this 76 straddle. I moved it up from
[03:54:58] a 76 to a 78 straddle yesterday and did that for like a 40cent credit. But either way, it's been a scenario where the market's been up moving closer to my strikes, but exttrinsic value has been expanding way more to and it's been
[03:55:12] completely offsetting my delta. So, uh, I have a $300 marked loss right now, but I have a $300 marked loss right now, but I have a 78 straddle with, uh, $1,000 in I have a 78 straddle with, uh, $1,000 in premium collected. You look at MCL. So,
[03:55:27] premium collected. You look at MCL. So, it's crazy. Just nuts. Crude has been crud has been an absolute monster. But, I mean, I I'm looking at this tape here reinstituting the blockade and yeah, it's like 3% higher.
[03:55:39] >> I don't know. It feels like the market has learned its lesson, so to speak. boy who cried wolf in a certain way where just because we have war headlines or a it's going to be the end of the world. I mean, how Russia, Ukraine, they're still
[03:55:51] >> That was seemed to be a problem a few years ago and now the market treats it's weather. Oh, it's sunny today and Russia, Ukraine are at war. So, implications here for what's happening. But
[03:56:06] unless we go out into an all-out war, I mean, what is the incentive? I'm just a psychology here. In March, you could play up the out of the money calls in oil thinking this thing was going to get worse. How do you how do you justify
[03:56:19] taking an aggressive oil long delta position right now and not feel incentivized to fade this thing given the given the reasons why we got here? the given the reasons why we got here? >> Um I think you justify it by making it
[03:56:32] uh risk defined. And basically I'm I'm talking my book here cuz yesterday I just finally decided to get back in. I didn't I wasn't interested in getting into oil when it was you know back below 60s. It just seemed like it was a done
[03:56:44] trade. Matter of fact, we're really talking about it. I mean, I was trying to get long oil um at the beginning of last month in June as it was sliding from 90 and I was like long couple call spreads and by the time after about a
[03:56:57] few days, it was clear it was this was heading lower. So, I got out, you know, for a lossish or whatever, whenever it was, it wasn't a whole it wasn't that much of a loss and proceed to watch the the the crude oil futures fall to the
[03:57:10] 60s, whatever. I decided to get back in just yesterday after two strong days of this is why I don't follow the headlines. I just pay attention to the me it could it was at least going to 80 and maybe higher. And so as a result I
[03:57:25] decided to put on a call spread yesterday in CL. I did the 70 in uh the July 24th expiration, just a 10-day cycle, 7880 call spread. And then I also cycle, 7880 call spread. And then I also did a uh MCL spread, buying one to sell
[03:57:39] two upside. Uh buying the 80 to sell two of the 87. So um we'll see which one of on the second one. That's the one that if we fade, I make, you know, money on just have to cut my losses at some point if we don't get this follow through
[03:57:55] through the 80 strike. Yeah, I mean I have my my game plan here for crude is uh if we you know it's a pretty clean head and shoulders pattern neckline that we had where we're bouncing around in May and then you know
[03:58:08] we'll call it 830 bucks or so. So another $2.50 from here. Short iron condor has got to be a ripe ripe ripe ripe ripe ripe trade. Uh I was just those are the strikes you're going north of 100. You're going south of 67. You're
[03:58:21] still going to get like a risking three to make two kind of trade setup right elevated. So, yeah, IVR is low, but if you go over into the trade tab, you're in the mid-40s. That's a lot better than some of the single stock names that
[03:58:33] we're seeing right now. Um, but in any event, the CPI today, right, great news for the market temporarily. We're not going to get a hike in July. Fantastic. But Worsh is speaking later today. Okay. Kevin Worsh, the new Fed chair, he's
[03:58:47] giving two days of semiannual testimony in front of Congress uh today and Central time. This is another one of those catalysts where we have to pay attention to intraday inputs for moving the yields, right? And if we saw yields,
[03:59:00] chances are the equity markets are as well. The 10 years, the 30 years, the morning. Stocks got some breathing room. Now, as those yields have come back up in the past 30 minutes, stocks are falling off a touch. So, that to me is
[03:59:14] the whole game today. We got the CPI. It's as good as it could have been for the markets. Now the conditions are set for war to remind everyone that they're not in a rush to hike rates, which conversely, guys, the Fed doesn't want
[03:59:26] means we're going to get more inflation and growth, and that means yields are what I'll be watching for this morning. Will the two-year yield go up while wars speaks? That's all I need to know.
[03:59:38] >> Couldn't agree more. And uh I will be watching how long it takes for that uh beautiful head of hair to go fully gray on Worsh because it's only a matter of >> [laughter] >> Yeah, you it's probably going to happen
[03:59:50] the house unless you get it under control soon. >> I do like I do like [laughter] the dragonfly uh the dragonfly strategy. It's it's quite it's quite big brain 200 IQ play.
[04:00:02] environment? We can just hire people for this. We have goons to do these things. >> Dragonflies. >> We will uh see you a little bit later. And yeah, I think right now we're going to check out crude oil. Maybe throw on
[04:00:15] backwardation here has steepened quite a bit. We had uh a nice kind of a signal for lack of better words yesterday when we looked at MCL. Uh we had 74 74 74 74.
[04:00:28] It was just a flat 74 backwardation across many expirations and then the back months tapered off to 70. And now you're seeing that backwardation steepen in the near-term cycle. You've got 80, 79, 78, 76, 75. So this is what we saw
[04:00:44] you'll see a steeper backwardation in the near-term cycles relative to uh back month cycles, but I think the for us when we saw it was 74 across the board and then it slowly tapered off, it's it shows us that the market is pricing in
[04:00:59] higher prices for longer uh at least for this year. So, until that changes, I think we'll we'll continue to trade this thing and it'll give us two-sided action thing and it'll give us two-sided action uh for sure. But the crude oil markets,
[04:01:12] I think if you were to look at uh first of all, the implied volatility increase over the last 5 days has been astronomical, up 33%. Uh I would just go astronomical, up 33%. Uh I would just go to the 34day if you want to stay in this
[04:01:25] uh 796 contract. This contract is going to fall off in two days, so I wouldn't trade the Q. I'd just go to the U uh but I just go to the August 17th monthly. And uh the nice thing is you can get pretty far out of here uh out of the
[04:01:39] money. And if we do like a half point wide 70 cents for 430 at 95 955 and then you go down to I don't know 70
[04:01:51] >> 70ish that >> it it is a trip to see how much uh that's changed over the last couple of day. I mean literally 24 hours. Yeah. 24 hours ago when you were looking at the term structure it was um I feel like uh
[04:02:06] term structure it was um I feel like uh 73 in the front and maybe you know 72 for the next month and then again we saw how it was in the 60s. We were talking about how it was very different from
[04:02:18] 6 months ago but also still starting to see something change once again because when it was in the 60s. So, you're seeing basically what this is showing you is that when oil gets to 80, something is materially changing. Um,
[04:02:31] something is materially changing. Um, it's possibly about to make a stronger way that the different futures are starting to widen out, if you will. And, that more than the headlines. Look, man, I can't make heads or tails of the
[04:02:46] yesterday it was like the the US is going to take control of the strait. Is that a good thing or not? I really don't know anymore. I mean, I can't tell. I there's a new blockade, there's a different agreement. The agreement has
[04:03:01] ceasefire is off. I can't keep track of that, but I can keep track of the the move in crude. And I know if the move gets above 80, I know all of a sudden a strong move higher. It's hanging around here now. Um but of course, you
[04:03:15] out, we might see a release in pressure in in this in the price once again. So, I think you just got to structure your trades. um accordingly knowing that there could be a possible 5% move in either direction I think really is the
[04:03:30] with the trades that I did yesterday. I paid $600 in premium to potentially make 1300. If it doesn't work out well, I'm down 300. I'll cut it. I'll cut my losses on that. And if it if oil does
[04:03:43] that I put on is probably making money and I could potentially close that and move on. >> Love it. Yeah. lots of lots of opportunity when these markets are flipping around like this. Um, so just
[04:03:56] engaged. Uh, but yeah, I think pissed about gold. I I didn't put I was really greedy yesterday. I I was gold was down below 4,000 at least in the front contract. And here's, you know,
[04:04:10] think about. Yesterday when I looked at gold, it was down below 4,000. I started looking at buying um the uh MGC contract, but it was uh the Q contract. And if you look at the options, the Q expires within 13 days. Now, I I really
[04:04:26] this trade if I'm going to buy the future. So then I could buy the um I which would have been the uh the V contract, right? But it wasn't below matters is because I wanted to buy the contract and do a similar trade like I
[04:04:42] and then sell a call spread further upside. That didn't work for me with the the 13-day options. I didn't want to do that. I wanted to do it further out to get more premium on say a 4200 4220 call spread, which is essentially what I did
[04:04:56] last time. I bought below 4,000 on the future and sold a 4200 4220 call spread. That was a better trade for me. I didn't want to do that with 13 days to go. So, where well, I was going to be patient. Well, it backfired. Now, it's back
[04:05:10] it is what it is. >> What are you going to do? You going to do? Yeah. I mean, I have a a GLD position that's a little bit longer term, a 380, 390 call diagonal spread. It's down a couple hundred bucks right
[04:05:24] now, but um the 380 is in September and the 390 is in August. So, I'm not too worried about it being so longterm and still pretty close to the price here. GLD is trading for five points higher, uh six points higher, almost more than
[04:05:39] that. uh free market here. So, we'll see. But yeah, I think that's the beauty of these markets. You can trade a number of different products, whether it's gold futures, micro gold, GLD, GDX, uh and
[04:05:54] you can really fine-tune your your exposure here. Um what do you think this this market in the E- Minis is going to do today? Do you think we fade from that >> We kind of have. I know it kind of sucks. By the way, uh if you guys got
[04:06:08] the chat. We'll get to them as as soon as we possibly can at some point. Um in any one times at any one of these times throughout the show, we definitely want to answer some of your questions. What do I think about here? I think I think
[04:06:22] I'm annoyed that I didn't get off my super bear earlier. I I didn't and I it wasn't lining up right and I didn't want to just completely throw it on without it making sense. That said, um I don't know. I think we got a full day
[04:06:35] in the morning like that and all of a sudden we're kind of fading. We'll see. I feel like we're going to fade more now. I feel like >> I want to do it here though. See, I'm
[04:06:48] [laughter] I We probably should something around 7500. Where are we actually trading right now? We're trading >> Yeah, something like that. My theory for the most part, my my my my style has
[04:07:03] been more like I have a lot of I have things that I think work I my book works very well if we go up to half a percent to a percent. So I don't mind putting on super bears and even losing that money because it completely gets the the loss
[04:07:17] of that usually gets eradicated via the other things that I'm making money on. >> I don't know. I'm going to put this on uh 7575 7580 and then a 74757470
[04:07:32] long put spread. So long put spread and a short call spread for 50 cents. So this is a super bare uh cuz I think the rip higher we already we were already uh down before the CPI. Then the CPI comes out we rip higher 35 points and we faded
[04:07:47] from there immediately >> and the Dow is down, banks are down. I think it could be an interesting scenario where we get a a complete fade, maybe back to red here. Uh but if not, if we just chop around here between 17
[04:08:00] and 30 points, this will still be a 50cent winner. But uh I'm going to see >> You know what I'm going to do? Okay, for that I'm going to do I'm going to do the short call spread of my gold trade. I'm going to go out on a a whim here. I'm
[04:08:13] going to do that short call spread thinking that as a result you're talking about everything fading that gold is going to fade back down below and I'll want. >> Okay, that's the hope. That's the That's
[04:08:26] >> I like it. Well, as Jamal said, join us on the YouTube channel. Uh we're trade ideas and questions along that right hand side chat. We'll get to them in the next 10 minutes or so. But yeah, we're going to take a quick 90 second
[04:08:39] we're going to take a quick 90 second break. You're watching Tasty Lab.
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[04:10:32] increase your return, decrease your risk, or quite possibly both. Sure, you've heard of the Greeks, you know, your deltas, your thetas, your Vegas, your deltas, your thetas, your Vegas, your charms, your vamas, etc. And you're
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[04:11:01] the gimmies and gotchas, one Greek at a time. We'll see you there.
[04:11:32] show. My name is Mike. I'm here with Jamal and we are about to answer your trade ideas and questions. Check them out. Uh join us on the YouTube channel. channel. Throw them along the right hand side chat and we will check them out
[04:11:45] right now. But uh yeah, this morning's been wild. We got the CPI at 7:30. The markets ripped up 40 points from being down five to up 35 and we've slowly faded from there. Uh the banks are down. A lot of them are down after reporting
[04:11:59] earnings. A lot of them crush earnings, but sometimes it doesn't really matter. stock market's still going to rip those things lower. So, uh we'll see how the rest of the market plays out today. But crude oil is another story. Crude oil is
[04:12:14] up uh significantly. the backwardation is right back into those markets. Uh flat backquidation of four points across multiple expiration cycles or contract
[04:12:26] cycles and now you've got the near-term at at 80 and it goes down to 79 78 76 uh all the way down to the the low 70s. U but I think the interest rate decision flip is really interesting. Uh I've got the CME Fedatch tool pulled up here and
[04:12:42] just looking at the the compare tab along the left side you can see the July expiration uh or the July decision I should say has off. The way to look at this is the lighter shade is a month ago as you get
[04:12:57] then the current. So clearly the probabilities were sliding into a rate probabilities were sliding into a rate hike of to 37540 and then this morning just immediately flipped on its head. We're right back to where we started a
[04:13:11] month ago. Um so it's going to be interesting to see. We're we're still pricing in a rate hike at some point, but it's not going to be in July. >> It would seem that way. Um it's it's and and I think some of it has to do with um
[04:13:24] just how much the landscape has changed, right? like uh it's um well a lot of the reason why that we saw interest rates go higher was because of the war and because of oil and because of how much that's changed and and uh then that
[04:13:39] going to end up being fine. But all of a sudden now you got this situation literally changing right as we speak. And so you're starting to wonder um if Are we going to continue to see these pops in oil that's going to lead to
[04:13:53] higher prices? [clears throat] Excuse me. that consumers are paying or is this and we're going to have to just kind of ignore it. It's kind of hard to tell. Um so I think that's that's been the the big dance that's been going on here with
[04:14:06] inflation. >> Yeah. Uh but while we let these things play out, we have been pretty active. Uh got into a Super Bowl 10-cent credit 15-point wide call spread right after the CPI hit. uh that jumped up 500
[04:14:21] bucks. Closed it immediately and that seemed to be a good decision with us down 15 points from where that was. You got into a gold short call spread 4200 4225 out in August and then [clears throat] uh I got into a
[04:14:35] and then [clears throat] uh I got into a CL iron condor 7069 half 95 95 half uh collected 200 bucks risking 300. So, kind of a kind of a similar scenario to what I normally do in SPX if I'm going to sell an iron condor, but this is just
[04:14:48] a straight up implied volatility play, but we I've got plenty more room to the upside than the downside here. Nine points and change to the downside. Uh, getting a lot of call skew infused into there. So, we'll see how that market
[04:15:01] plays out. And just got filled on a super bare here. 75757580 super bare here. 75757580 short call spread to buy a 74757470 put spread for a 50-cent credit. So, if we fade from up 19 back to flat, this
[04:15:15] off. >> So, just to illustrate what I was kind of getting at, um, if we got this graphic here, and it's, um, we also got some questions to get to right after this, but again, um, we see inflation,
[04:15:28] you know, popped up. This is the number this morning, 3 and a half%, but um, a lot of this has, uh, it's it's it's pulled back, but it's it's because the month, and oil was lower. Oh, it was 60 something dollars, right? And so you see
[04:15:43] this turn, but what is this going to look like in a month? Especially if we look like in a month? Especially if we go too high, right, on oil. What is this going to look like next month? Is it going to be back at four?
[04:15:55] 50-gallon drum with gas. >> I mean, I thought about it. I'm not going to lie. [laughter] >> Costco prices aren't getting any lower. weekend. The gas was uh that's where the games were when I was my kid was playing
[04:16:07] bit cheaper. Uh, nevertheless, we do have a couple of questions here. Um, somebody's asking about uh, Service Now, NOW. What would what do we think about it? I know I got thoughts, but uh, you
[04:16:20] you go first. Uh, I haven't traded this thing really Uh, I haven't traded this thing really uh, all too often, but yeah, I think uh, all too often, but yeah, I think regardless of the product at hand, I
[04:16:33] going on, what's on deck. We got earnings on deck July 22nd. So, uh, that eliminates any neutral strategies for me until earnings because I don't like a product that is going to hold on to exttrinsic value until they have an an
[04:16:49] earnings announcement. With that said, this earnings implied volatility, if you isolate the 10day for July 22nd, has a 15 point implied move. That's a big implied move relative to $111 stock. It's down 10 points premarket. So, uh, I
[04:17:04] would say if you're bullish on Service Now, you're getting a 10point discount, 10% discount right now, and you have the ability to construct something here where maybe you buy something in September, August, you sell the 3-day
[04:17:17] with the intention of rolling it, that short option from the 3-day to the Like, you could do a lot of different things, but yeah, I would just I you're doing a neutral iron condor for earnings, in which case I would wait
[04:17:30] till July 22nd. So for me and and like that's that's the which Mike has given you which is fantastic. For me it's a little deeper fantastic. For me it's a little deeper in that I am in these service names. So
[04:17:45] I have Microsoft, I have CRM, I have Palunteer, I have long Super Bowls in those and then I've also got short calls in SNO and um and Adobe. And so that's kind of my complex I got going on with those
[04:17:59] those situations. So again, this is one of those names in the service sector. pretty sure partly because of I IBM being down today that's gotten rocked. a bad day for the service names probably. That's going to suck. But
[04:18:13] calls on some of those names. So I think you got to think about it in terms of the service sector and what's going on. Um if you're going to put something I mean I don't know what to tell you. You gota you got to make your own bed here.
[04:18:25] I've made my own bed. I'm long some of them that I think are gonna survive this bout of selling and um I got a couple of shorts on others, but um I think you got right now because they're all moving together and it's going to be a bad day
[04:18:40] >> Yeah, just looking at Microsoft as one of those those uh mag seven leaders down 10 points premarket and it's had a pretty good run up from uh 350 all the way up to 390, but we're going to be right back at 380 and uh chopping around
[04:18:54] reason to throw on maybe the super bear or some kind of bullish hedge is everything is telling us that the e- minis will probably sell off here with the banks and softs uh selling off here. >> But we're going to take a quick break.
[04:19:08] throwing in those questions in the YouTube chat. Uh we're going to bring on Liz just on the other side of this break.
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[04:21:17] show. My name is Mike. I'm here with Jamal and uh we got about 17 minutes until the equity market opens, but we've already had plenty of activity here. We got to bring on Liz Deer King and get her take on the early morning moves.
[04:21:31] >> Good morning, boys. Anything going on? I mean, any reports, any moves in the >> Yeah, >> it's been so fun already today. I need smiles on both your faces, but I would kick you both in the shins for shorting
[04:21:44] >> I did. I I short >> both of you shorted gold today. Shame. from? [laughter] >> Well, actually, oh, that's from Game of >> Yes. Thank you. >> I I'm actually still long gold. I have a
[04:21:58] call diagonal spread, but I did short the market in general with a super bear. >> I I was watching was watching, Mike. Always watching. forgot the CPI was at 7:30. I was like, "Oh, maybe this looks like a Super
[04:22:13] >> You did that on accident. >> I did. I got filled a minute before the CPI hit and then [laughter] it jumped up 40 points. I was like, "Oh, maybe I should take this off." >> It was a fun morning. [laughter]
[04:22:25] smart. >> Speaking of, it's probably a good time to ceue up uh a question that we got from the chat here um about uh placing S&P trades before the open. Why would you place SPX trades now and not during
[04:22:40] trading hours especially if prices usually are wide with and uh that well it stops there actually that's that's something else but oh yeah it goes on floor floor first list to answer >> you know why because you can because you
[04:22:54] can so I agree prices are wide but in that in the pre-market I let it come to me so I decide what I'm doing I set my price and I typically will need a movement in one direction or the other they are a little bit wide pick your
[04:23:07] pick your spot and put it in because you can. It's really fun to trade them non non in the in the pre-market hours just like Mike did right before the CPI. That like Mike did right before the CPI. That was not attainable to us two months ago.
[04:23:22] CPI and SPX two months ago. You had to use the E- mini S&P futures. And I let it sit. You can let it settle and you can let it go. That's why I like the
[04:23:34] S&P. But I do like trading them premarket. I have a certain trade that I place every day as soon as I wake up. >> Yeah. And I think uh just bringing it one one step further, I think if it's just an accessibility thing, maybe
[04:23:46] you can't trade futures or you're not approved to trade futures or you know whatnot. Now you can get that pre-market action with S&P uh because it's a totally different trading instrument. So >> yeah. Um and we're there's always stuff
[04:24:00] that happens pre-market like the CPI that just hit. Sometimes it's a nothing burger, but like that was a 40point rally in five seconds. Like it's you can have these things on and express your directional assumption or neutral
[04:24:12] assumption. Uh right now neutral is working too. So yeah, I think it's it's >> Well, let me ask you this too. It is a little bit illquid and I do appreciate look at it's 10 cents wide. It's really not
[04:24:25] >> it's really earlier in the morning it is a little wider. I will tell you that frothing at the open right now. So, but earlier in the morning it is a little bit wider, but that's okay. These are It's a It's a $7,000 product. Pick your
[04:24:38] pick your price point. But you can I've noticed sometimes if you get the move >> Yeah. Yeah. >> Yeah. Yeah. push back on why it's not wide to me. I mean, like you said, it's a $7,000
[04:24:52] course. This is the same width that we see during the regular trading day for S&P. Honestly, I wouldn't consider this wide. I I would I the only thing I would wide. I I would I the only thing I would say is um is uh again I think you got to
[04:25:06] be careful of where you're trading. Don't just look at the numbers like Liz to pay attention to where at the money is. You got to find that immediately and then make your decisions. That's that's the thing that I think is tricky that a
[04:25:19] lot of people probably aren't paying attention to quickly. and making sure that you uh trade your your ch make sure your time um that you're putting in the trade your trade session is market hours sorry uh 24 hours because again a lot of
[04:25:31] times we're so quick to cue stuff up >> I've done this I know you did it too we hours in so you got to do those trade checks real quick before you do the trade but other than that you you guys said it perfectly like it's a it's a
[04:25:45] proximity thing it's a time thing and it's it's to be able to trade something this where we got banks moving. We got CPI coming in. We already got a nice 500X question while we're here. >> And and and Jamal, I want I want to put
[04:25:59] another another thing in here, too. This is very it's it is it's very exciting early. And I do keep an eye on where the traders are picking their points in the really do like to look at that. And I can look at that on the SIBO or you can
[04:26:13] look at volume in there. But we you got to remember too these earnings earnings season is on deck and S&P trades until 4 PM. So keep that in mind, right? So you have the ability to have something come out. I know Apple's after 4, but these
[04:26:27] out. I know Apple's after 4, but these big flyers that have huge volume in these indices. Let's say like uh Nvidia is going to have earnings. It's going to move the market, but you can have options that trade until 4:00 now.
[04:26:40] think there's a >> big big big deal. >> Yeah, it's great. And there's there's something to be said about a 20 cent wide bid ass spread in SPX and a 20-cent wide bid ass spread in an equity that's
[04:26:54] lower price equity. Like SPX, it has so much activity. Like the bid ass spread Liz's point, you just got to pick your price and let it go and you'll likely probably because the market moved against you uh or for for you in that
[04:27:09] sense in terms of getting filled on the price you want. But yeah, the the liquidity is not an issue in SPX. It's one of the most liquid assets uh in the world. So uh just keep that in mind. >> Uh we got another question. Let's cue
[04:27:21] that up. >> What are the closing differences between SPX and ES? What happens if you have a spread that is in the money and S&P at closing? What happens with ES? Why do you force closing of ES
[04:27:36] >> well this is pretty simple so SPX is cash ES is futures they settle to futures so if you have a single in the money option in S&P it's the cash whatever money you're down you look at the print in ES if you have a single in
[04:27:50] the money option that settles to futures you can be the proud owner or proud short a future so that's why I like SPX cuz I like a cash settled my two I said lost their mind two favorite words in the English language are cash settled.
[04:28:05] probably loved it? >> Because No, Kathy Kathy Clay the the CEO ever." And they posted it everywhere. >> Yeah. Yeah. No, I know. Trust me. No, they are. Are you kidding me? They they love that part. I mean,
[04:28:18] >> I spent three years there talking about cash settled stuff. That's the They love >> Yeah. Um, and actually that's one of the reasons why, like I was telling Mike, like I know I have a lot of long deltas and so I was looking to get off a super
[04:28:30] bear, which >> I did not this [clears throat] morning. [laughter] >> Um, but uh, I'm sorry, but a lot of times I'll put those trades on, I just leave it on. Like I'm not I'm not
[04:28:43] in my favor, that's great. If it's not, I'm probably winning on something else anyway. I've already built that in whatever the loss or the win is going to don't it's not like a trade I have to manage that often. You guys manage them
[04:28:56] a lot more than I do. I I really don't most of the times if I do um because I put them on for a specific reason. Look, a lot of times, I'm just going to tell to war, okay? And it's just going to
[04:29:08] war. I'm going to win the war. It's just going to be one of those casualties. I telling you that's how I think about it. >> I like No, I like the way to look at that, Jamal. And like I said, I trade so different and different accounts, but
[04:29:21] when I'm with my kids or I'm teaching them about SPX, the cash settledness makes it a lot easier to let it just go. Let it go. Like you said, this is you Keep it keep lather, rinse, repeat. You keep doing it and eventually you will
[04:29:34] eventually the numbers work out. So that that's not a bad mentality with it. But that with them than I do in my own account because the bigger the size, the >> I know. I love that. I love that you do that. But I'm the same way with it. Like
[04:29:48] I I it's like you put on different hats as soon as you pull that account down Okay, what's going on here? How am I thinking? What am I looking at? >> Yeah, I was I was joking with Glenn the other day. I was like, when when do I
[04:30:01] listen, Glenn, >> Microsoft at 350. Just go ahead and you know, buy some leap options and then change your password, but send it to >> Yeah. [laughter] >> He can has full access to your account.
[04:30:15] yourself out. You can't. Your hands are tied. Then you just let it go. attack, man. Or Microsoft and Palanteer position. This guy. This guy. Was that It might have been him sending service now. He's looking at he's super
[04:30:30] [laughter] >> Well, what about is he okay? Was he in IBM? Like is he does he is he somewhere? >> He's okay. Okay, good. >> I don't think he was in IBM because Mike and I have never talked about IBM.
[04:30:42] >> Yeah. >> Oh, so you guys take him down. Okay, I >> We just talk about these things and he sees it and he sees the opportunity. We don't It's It look, it's just like we talk to people all the time in the chat.
[04:30:54] tell you to make your own decisions. But we can't help it if half of the stuff sense. We can't help that. >> Yeah. Yeah. >> Real quick, just to really make it super clear. So SPX and the e- minis and the
[04:31:09] micro e- minis, they're all cash settled, but there is no underlying asset for SPX. So the zero day, the 1 day, the 2-day, whatever expiration financial transaction at at the expiration of your contract. But the e-
[04:31:23] minis and the micro e- minis, there are contracts that settle to this. So yes, even though the option itself like a zero day, 1 day, 2day, 3day, these will, if it's in the money, it will turn into the e- mini U6 contract, but then the U6
[04:31:38] contract will eventually cash settle. >> Yes. So that's the the differentiation there is everything's cash settled eventually but S&P is immediately cash settled the microe minis and the e- mini futures will settle to the contract
[04:31:52] >> Yes. >> Which means you have to watch your cash that means and you want to be long or short that if you are long or short that >> Yes. >> Than if you were if you had a defined
[04:32:06] middle. >> Yeah. Yeah. And this is the main reason why we're using the options on the SPX because of that cash settlement right away. Like it doesn't settle to anything. So it's it is what it is.
[04:32:18] >> Settles to cash. >> Yep. There. I mean it there I I really do like the cash settled. Uh and you know what's crazy too? I know I'm going Wait, do you have somebody from the um trade desk coming on later?
[04:32:32] >> Yes. >> Yes. Right. Okay. So, um, we've I've never had a tanker of natural gas delivered to my house. So, I'm pretty safe to say because I trade natural gas options so much and I've never taken
[04:32:45] delivery, so I'm safe here. Um, those also those options, that's why I leave also settle to cash. The natural gas options, you never take the future. >> Yeah. And that's another that's another great point. If you're trading zero day
[04:32:58] stuff, uh, and let's say you're real close to your spread and your spread's money, in the money, out of the money. The beautiful thing of S&P is that it aligns with the brokerage firm's risk profile, too. Like if you have a ton of
[04:33:13] contracts on and you're at you're at whatever broker, if you have a ton of contracts on in like Tesla and you've got a hundred contracts on for two pennies, if that option starts to move in the money or out of the money and the
[04:33:25] team recognizes that you don't have the capital to hold the shares, whether they're long or short, you can get stopped out before 3:00 where S&P because it's it's immediately cash settled. That's another reason why those
[04:33:39] you can hold that all the way through expiration. It can it can expire in to where in any other product you would have acquired shares. In S&P it's still
[04:33:51] a cash seller transaction. So there's nothing to worry about in terms of settlement risk, expiration risk with SPX in terms of acquiring something else after the fact. >> And Mike, that is why you are you need
[04:34:04] you explain things. You're very good at articulating it. Like I said, I just just you just get the cash or you don't. But Mike, you very very well said. Very well said. >> Thank you. Uh we got about five four
[04:34:19] minutes exactly until the market opens the equity market. Uh eminis are trying to rebound from the recent selloff. If we look at a one minute chart and here's your 7:30 smash and we've tapered off ever since then. Uh, but we've been
[04:34:33] chopping around this like five point wide range ever since. Where do you think we go from here? >> Um, what is what? Let me see your Can I see your fancy Vic chart? Fancy Vic chart.
[04:34:46] product team. I'm We might have a little something going on there to add this, but no promises. We'll see. >> No, you if you you have to say it you That's how that's how things get done. [laughter]
[04:35:00] pretty steep contango here. Uh the opposite of what's happening in the the crude oil markets, but yeah, VIX futures still in contango and the VIX is at 16.
[04:35:12] >> at 16. Okay, given all the volatility information, my prediction for today is we are going to I'm giving it in spo. We're going to close up 47. We're going to go up 20 points from here. >> I hope you're right. That would
[04:35:25] >> That's definitely fair. I mean, look, we've been dancing around 7,600. We did it all day yesterday until we fell. Um, I think it's it's it's definitely I not going to it's not going to give me the opportunity to get on the super bear
[04:35:39] the realm. >> I think what just happened. I mean, I love that you have this up. We got what? We got a little above 6 7600. Things got be up here." And then [laughter] they fade.
[04:35:51] >> Yeah. Yeah. But markets move. I mean, kind of. I I I feel like I'm all over the place with you guys today, but it's kind of like look at all the banks. They all all the banks outperformed all of them. Every single one you get the news,
[04:36:03] killed it. Everything's down. >> Yeah. irrational. It does it does what it wants to do. >> Yeah. And that's why I think I think we'll have an inside day regardless of
[04:36:15] whether we're up or down. uh just because it seems like we're getting a little conflicting info with the E- Minis and NASDAQ up, the banks down after posting good numbers. The software stocks down uh Service Now, Microsoft,
[04:36:27] like there's there's things that are pulling and pushing in opposite just results in not much. >> That's a great point. This is definitely going to be a day to watch the heat map to see what kind of rotation happens.
[04:36:41] make fun of you real quick. You're all over the place today. I had in my mind you read your kids bedtime stories just like this. Good night moon. Good night Don't tell me. >> Jamal, I do to my defense and I feel
[04:36:55] like I have to say this to the chat. I was born this way. Fast and loud and use my hands. And everyone my entire life told me to slow down. >> And once I walked down that trading floor, I was like, I have met my match.
[04:37:08] There wasn't anybody I couldn't beat in the speed department. And it stayed with it. >> Yeah, that's why 14 years 15 years down there, I was taller than them, faster than them and louder than them. So, it
[04:37:22] worked. It was the trifecta. [laughter] >> So, yeah, we got a bunch of things here. We got the IBM making a move so far um to the downside, which is going to drag software, and that's going to be great. We got um I mean already it's it's
[04:37:34] another one of those days. SMH is up 4%. We got software down 3%. So if you just look at SMH and versus IGV, that's the push and pull we got going on already. That's been the same push and pull we've
[04:37:47] that's not really that much different. When semis are up, the software is down, vice versa. Uh the only question is whether or not uh the consumer staples, the Walmarts of the world will be down. My guess is they are it'll be
[04:38:00] fascinating to see if that reverses at some point today. But this is going to be the thing. I'm going to say it right now. This is going to be the thing that they're both down, watch out.
[04:38:12] >> Watch out. >> Yeah. Um before the market, before the collectively, the three of us? What are we doing in IBM? >> Great question. >> I want to maybe sell a put in there, but
[04:38:26] I'm pretty exposed to the software, so I'm not in a rush. Let me just say space, so I'm not in a rush. But >> look at that drop. >> They just And again, this is a pre-announcement. They have earnings on
[04:38:40] Apparently, they said things aren't going to go well. I haven't had a chance said, but clearly they said things aren't going to go well in the software space cuz again, they're not the only ones that are down though. A lot of the
[04:38:53] >> Um, >> yeah. >> So, Microsoft is getting smoked. CRM, it's the same playbook. It's just there's a catalyst this time. I mean, CRM still.
[04:39:06] IBM. I look at this. >> They were up yesterday. IBM didn't even down today anyway. [laughter] >> Yeah. earnings is going to be great for them now? They It's out. Everything is we we
[04:39:19] are going to be amazing. >> What Liz is saying is a great point. A pre-announce and they'll say all the bad stuff just to get it out the way before >> and then you know they might bounce back which Allah why I'm thinking about
[04:39:32] >> Yeah. >> Yeah. And I think I think even in the three-day put with the intention of rolling to the 10day like look at the premium here. If you had a let's just say like a two a 200 put here collect
[04:39:47] gives you another 20 points of wiggle room to the downside. But if you do get tested, you can immediately move that 3-day into the 10day into the earning cycle and pick up another dollar for that 200. Actually, well over another
[04:40:01] markets get more liquid here. >> Yeah, usually I was me. I ran front ran >> I'm [laughter] about to sell one. >> Yeah, to be much lower, but right now we're at >> I mean, we're basically at the lows that
[04:40:16] >> It's crazy. >> Yeah, we're basically right there. I >> immediately at annual lows. >> Yeah, I mean, whatever. I'm I'm probably sell it for now. >> Yeah, just come on in. The water's fine.
[04:40:31] it. It's >> I'm selling I'm actually going to sell >> Okay. >> I like Mike's I like Mike's idea of three days, then I'm going to roll, then I'm going to roll. I either get term. I
[04:40:44] like the juicier >> further out. Give it some time to think. Understand my way here, IBM. Understand that you're supposed to be higher. I >> If you look at the net change, if if you look at the same strike, the September
[04:40:57] yesterday. It's trading for $11 now. Y it's up $10 on this move. So, you can't reversal here, >> I sold the 210. Like we've said uh the
[04:41:09] pure implied volatility premium, it's it's in the 3-day and you have that uh ace in your in your sleeve to be able to roll it from the 3-day to the 10day. As as always, like if we have an earnings announcement, we like to straddle the
[04:41:23] expirations by if we're doing a a debit spread like a calendar or diagonal, put something before earnings with the intention to roll into earnings. You can intention to roll into earnings. You can aggressively reduce cost basis. Uh, and
[04:41:37] >> totally. I mean, you're absolutely right. I agree. case. That's why I'm not worried about earnings, which is why I'm going for high, but >> but you're you're right, too. I mean,
[04:41:50] to skin a cat. >> I don't know why we always there's an guess >> Jamal, I was just saying that. Why is >> I'm not really sure cats. >> Yeah, I know, right? I mean, it's so
[04:42:03] mean. IBM plunged 23%. It's largest intraday drop since 1987. >> Yeah. >> So, I mean, like I said, I what I did is
[04:42:15] accounts, scanned through. I was like, I've got to have some IBM in here Because I have so many positions. I was like, okay, I'm out. I didn't have one >> Yeah, I feel fortunate. I have I'm a clean slate here, but I think we'll I
[04:42:29] think I'll throw something on for earnings. Uh, and I I it's interesting these call options. These all lost. >> Oh, by the way, sorry I had to do this to you. Um, SK Highix has options started today.
[04:42:44] >> Yep. Yep. [laughter] >> Five shiny. >> Probably not. >> No, not at all. >> not too bad. >> It's not good. It's not good, but it's
[04:42:57] >> Yeah, I would I would give this a couple days. I mean, you can feel it in the room. Like, SK Hinx was not even close to the same level of hype as SpaceX. Um, and they don't have weekly expirations yet. So, that's my cue. Like, if there's
[04:43:12] it. >> August is 115 ball. 143 ball in the >> This thing is a sale. It's >> still tradable for sure. But, um, wait, the front. >> Let's look at implied ball. Just Just
[04:43:25] pull up change the tab to implied ball. You can see the actual implied ball. >> have to do it wide. >> That should shake out. I mean, at some
[04:43:39] point the market the markets need to become tighter for me to start trading >> Yeah, you can wait on this one. >> Catching a little bit of a bid today. Yesterday was not not good. >> No, not at all. Yeah, these things need
[04:43:53] to be I can I can wait on this one. This 100 V ain't going nowhere at all. I mean, again, this is going to have the similar volume as a lot of so, this is not changing. It would be nice to sell something in here right
[04:44:05] nice to sell something in here right now, but it is a little wide. >> mean, but honestly, give it a couple days. I mean, I what's surprising to me first time we're looking at them. I mean, I think they're just going to get
[04:44:18] even a little bit tighter probably by tomorrow. The market makers, it's a product. you have to find your footing. So, yeah, so far semis are up. Uh Micron's up. Uh and again, yesterday I I
[04:44:32] Micron's up. Uh and again, yesterday I I did want to pull the old um call SanDisk and Micron, but they were way looking to get like a 100 points wide in and SanDisk and it was like $9. I don't
[04:44:45] premium for a couple of days. Maybe if it was $600, maybe I'd be willing to, but almost $1,000 is a little too much. But you just felt like they were going bouncing today. SanDisk is up $120. Micron's up almost $50.
[04:45:00] I just got into an IBM trade. I bought the 250 [clears throat] call in August monthly and I sold the 3-day against it. >> Uh total package was 600 bucks, but the
[04:45:12] same thing, same story applies. I did this in Costco earlier this year. uh the initial debit paid is not necessarily the true risk because I'm I'm going to roll it is the risk but I'm going to roll this 3-day 250 strike which is
[04:45:25] trading for.7 if I swap this and buy it back just to show you going from the 3-day to the 10day that same 250 strike is trading for $400. So >> at the very least if nothing else changes unless we sell off another 70
[04:45:39] points be which would be absolutely nuts. Um, this option is going to hold on to a couple hundred of premium. So, over the next 3 days, I'll be able to roll from 3-day to the 10day, pick up another three bucks and reduce that cost
[04:45:51] basis dramatically, and then have an earnings shot. Uh, right now, I have a pre-earning shot to the upside. But, I'll have an earnings shot to the upside So, >> I like the earning setup calendars.
[04:46:04] That's pretty cool because you do have that you do have that long built in. >> Yep. Well, Liz, we are gonna take a quick break here, but we'll see you a >> Thank you. You, too. >> You, too.
[04:46:17] >> Uh, yeah. Ein is chopping around up 12. NASDAQ up 280. The Dow and the Russell are chopping around flatish, but yeah, IBM is the big story in terms of the big mover right now. Massive move to the downside 24%. Uh, and crude oil still
[04:46:32] creeping up to the upside. Backwardation is back in this product. Uh, so we've got a little little tension in these markets, but still e- minis only 14 points really inside that expected move. We're going to take a quick 90 second
[04:46:46] break. You're watching Tasty Live. We'll see you on the other side.
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[04:49:51] trade like a trader? [music] Tasty trade. show. Yini's caught a bid here just a little bit. Up 18. NASDAQ's up 280.
[04:50:07] The Dow ticked green. Very interesting. Uh Bitcoin and ETH catching a bid as well. But IBM down 70 points, almost 25%. Crazy gap down here. Uh they announced some pre-earnings stuff maybe trying to
[04:50:21] soften the blow. uh from a bigger move with that binary event. But we've got a very special guest on the line, Felix. How you doing this morning? >> Absolutely. >> It's awesome, man. Hey, man. I got to
[04:50:35] background? Is like a Kandinsky or something? sorry about that. Um I I I paint it. It's very relaxing. >> Looks great. >> So, what do you think?
[04:50:47] here if he's care to join and join us. Come on, Winston. Sit up. [laughter] Sit aren't you? [clears throat] Come on. >> Oh no. Oh no. sleeping. >> It happens when we try to get socks to
[04:51:00] sure. >> They don't, do they? >> What are you looking at this morning? >> Well, to me, honestly, the big story watching this for some time, is it's a combination of the SpaceX bond, um, AI
[04:51:16] debt generally, um, the circular financing in AI. I think AB IBM being down 20 odd% this morning as you just mentioned is kind of um the the the thing we were hoping wasn't going to happen this earning season, right? Um so
[04:51:31] for me, look at SpaceX bond down almost 10% since it was issued and it's not like SCA SpaceX has gone away or Elon's gone away or the rocket's gone away and gone away or the rocket's gone away and it shows you what the Financial Times
[04:51:44] yesterday. what Goldman Sachs put out internally yesterday that the banks are internally yesterday that the banks are trying to offload AI related debt. And
[04:51:56] to me, that's something that worries me because every major crash we ever had, and I'm not a doom and gloomer, I'm just, you know, being realistic on risk here, was a debt problem. You know, 2008, you know, 1999, it was always a
[04:52:10] typically are a little bit smarter than than us equity guys. So that's what I'm worried about. And if you then look a little deeper into the debt that these hyperscalers have been piling up, you know, the Microsofts, the Amazons, and
[04:52:25] so on, and where they've been putting that money, well, obviously into AI claiming that they're getting revenue from this AI infrastructure. But how is that revenue being financed? Well, 50% of it, literally half of it, is being
[04:52:41] financed by the hyperscalers. So, it's a bit like me saying, "Hey, Mike, here is €50." Um, and then you say, "Okay, I'm going to I'm going to invest in you, and you're going to give the €50 back to me because you want to use my software."
[04:52:55] And then I book €50 revenue gain and tell everybody how wonderful it is. And it isn't illegal. It's called vendor financing. But the scale of it, we have financing. But the scale of it, we have never ever seen before. And the concern
[04:53:10] is therefore well how much of this whole AI revenue is real right we had great AI revenue is real right we had great earnings in from TSM TSMC right um but isn't that money just borrowing that's being passed down
[04:53:28] >> yeah it it does seem like that Felix but at the same time you know um and and I'm you're right a lot of times it's usually bond too much bond issuance or definitely argue about overleveraging and that's a combo for another time. But
[04:53:43] to this bond thing about AIS, I I was talking with Mike about this after the holiday was uh in in northern Wisconsin, which was not far from the Lake Michigan where I was, the town Shboen, and there was a huge data center, massive, so
[04:53:57] even remember the size of it. I want to say it's $600 billion data center. I'm not sure, but um which is probably too much, but it was it was just big. and you're seeing these these buildouts and you're seeing we we did a couple of
[04:54:10] between Oracle, between Nvidia and whatever. Doesn't it seem though it's just they're just buying time for these things to work? Like I think the technology works but you know the dot bubble was about the
[04:54:24] It's a brilliant thing. We had the railroad bubble a little bit longer away. The railroads worked. So it isn't about the technology not functioning. It's just about are we overleveraging and are we getting ourselves back into a
[04:54:37] position where you know something breaks capex goes a little bit down IBM hinting where a little bit of the spending gets delayed or scaled down and then suddenly this you know circular house of cards doesn't look quite as wonderful as it
[04:54:52] expectations we've got out there they they're really high right like earnings have to come in perfect this season and we've had basically a market that's up how much this 18% or something and earnings are pretty much flat across the
[04:55:06] earnings are pretty much flat across the board. So, it's a small thing that could start to unwind this kind of perfection that the market's expecting. And what I see, you know, we've taught like 25,000 people or something how to manage their
[04:55:21] at all these portfolios, it's AI, it's AI, and it's AI. And it worries me much risk because a lot of this risk that I'm talking about here is already in your 401ks. It's in your pension funds. It's in your target date funds.
[04:55:36] Not because you want it to be. It just happens to be there. So people have happens to be there. So people have massive exposure to tech and AI. And I think people should look at their portfolios and maybe, you know, maybe
[04:55:48] think about buying some other stuff. >> Yeah, I think that's fair. And I I always look at it from the lens of uh capex. The bigger capex gets, the less runway you have. And to your point, like
[04:56:02] if there's a hiccup and you're spending all this money or you're borrowing money to get the uh capital to make these things happen and then there's a hiccup, now you're in a really tough spot. Like we always talk about trading small and
[04:56:15] giving yourself a lot of wiggle room to be wrong. like we have these yearlong trades in micro minis and the NASDAQ futures, the micro futures where we're sized correctly to where we can we can absorb a 20 30 40% sell-off and it's not
[04:56:29] going to really matter to the portfolio because we can absorb it. But if I were to lever up in the same way, it's it's no different than than borrowing to spend and you know create this facade of of income and revenue while I'm you know
[04:56:43] I'm creating debt on the other side. The more I do that, the less runway I have. So I think that's another really interesting angle and and you like the more you do that the less the less volatility you can absorb and for these
[04:56:55] companies it's a very fine line when everyone is invested in the same way. great point. Position sizing is the answer to it all. But you know you you long time and teaching people really really responsibly. Um, most people
[04:57:11] position far too large and most people, you know, have the S&P 500 in their portfolio, a NASDAQ index fund, and then they go and buy tech funds or tech futures or whatever it might be. So, they're kind of tripling their tech
[04:57:25] exposure, right? Rather than actually creating genuine diversification. You other sectors out there, you know, whether it's insurance or, you know, been good to us. There's a lot of stuff out there that can actually make us
[04:57:39] think >> yeah, couldn't agree more. But yeah, diversification and trade size is the name of the game. Felix, appreciate your time. It was a great conversation. And I got to say, you got to keep painting.
[04:57:52] >> It could it could be an alternate day job, you know. [laughter] >> Good to meet you. >> Absolutely. We'll see you next time. E-
[04:58:05] >> Absolutely. We'll see you next time. E- Minis up 16. NASDAQ up 280. Uh it seems but everything is green, interestingly enough. Crude oil's up, energyy's up, uh gold's up, silver's up, everything's up here, except for Microsoft, IBM, some of
[04:58:21] the banks. So, seeing a weird divergence here. There's some strength that's kind of shrouding the weakness in the bank sector. But we're going to take a quick YouTube channel. throw in your trade ideas questions along the righthand side
[04:58:35] yeah, well you're watching Tasty Live. We'll see you soon.
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[05:02:49] [music] >> Explain pots. Pot odds is my favorite term. Uh, but pot odds in the poker world or gambling world refers to having a greater payout than your implied odds would would
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[05:04:44] >> And we are back. I'm Spac here in San Francisco. That is Glenn once again back Francisco. That is Glenn once again back with us. Sir, how goes it? >> Goes great. Hot as I don't know what outside, but I've got my seasonal linen
[05:05:00] shirt on. Feeling pretty good. How about yourself? Good. Uh, it's actually pretty hot here, too, uh, for San Francisco. We might even get to, I don't know, maybe 75 today.
[05:05:15] >> Crazy. >> Crazy. Are you a big uh outdoorsman? You a hiker? >> I am not. Um, I am not a an outdoors
[05:05:27] hiker. I am what you might say is an urban hiker. Uh, we have lots of hills here in San Francisco. So, just walking around is a hike unto itself. >> I can confirm it's brutal. Especially even if you like have that in the back
[05:05:39] of your head, you're like, "Oh, yeah. San Francisco very hilly." No joke. I and forth >> if it were anything hotter than 75. Uh,
[05:05:51] I'd be a mess. Uh there's a nice near vertical hill from uh the closest light rail up to my house. Uh and uh it's a fun little uh 20
[05:06:05] house. Uh and uh it's a fun little uh 20 minute exercise in u near Olympic >> dude. Like seriously, bear crawling like you you want to put your hands down. That's how ver Yeah. >> more power to That's Hey, that that
[05:06:19] that's how uh we're going to stay spritly into old age out here. spritly into old age out here. >> Um I'll tell you uh this is uh going to be the the um the connector of connectors. I'll tell you what's feeling
[05:06:34] spritly today. [laughter] >> God, he's good. >> God, he's good. >> He's so good. Uh so good. uh uh it it is uh the US dollar uh which is uh certainly enjoying uh the festivities
[05:06:50] certainly enjoying uh the festivities here. We have a really interesting day. Uh and um we can go to the chart here. This is the dollar index. I mean obviously uh it had something of a knockback after uh that softer than
[05:07:05] expected CPI report. We'll get to that in just a moment. But look at this reversal. this um this dollar does not want to this um this dollar does not want to stay down. Um thank you Kevin Walsh. Uh
[05:07:18] >> what do you make of this? >> Yeah, you buyer here. You're a buyer of dollars here. >> I mean it's been a complete if you're uh more of an intraday scalper. Uh it was an immediate uh almost uh fade the
[05:07:33] reaction, right? we had a immediate stress following um the soft CPI print and you couldn't at that point say um
[05:07:45] especially on those data releases that are you know an hour before US market open how we've been seeing these uh dollar markets move is kind of a reaction into uh the US market open and then kind of waiting after that 30
[05:07:59] minutes um to see what direction the US decides to take it And that's an opportunity uh either to uh you know hop on the momentum or fade the reaction today. Uh I did not expect it that it would be such a strong fade but you you
[05:08:14] had to wait a little bit for it. Um a lot of chop before now heading into the lot of chop before now heading into the afternoon we are seeing um the dollar although still soft on the day. uh I mean took out half of of the gains the
[05:08:28] looking at the euro alone um what they made this morning um that's a pretty clean >> yeah that right at um what seems to be a
[05:08:40] pretty strong resistance level um looking in the spot market around 114 half um yeah a little bit higher here in this futures market but um tested time
[05:08:52] and time again since our initial leg lower here was on the heels if you'll remember from that non-farm payroll release right before Junth um on that shortened week. We haven't even uh sniffed uh the trading range that we
[05:09:07] used to be in since then. And and this has been a pretty staunch um you know uh has been a pretty staunch um you know uh ceiling for this euro and this you know
[05:09:20] on the data release gave you every reason uh to try and test that. Although I think everyone is starting to get a sense this week um that you know, okay, even though this is our big test before the the July FOMC, now with the recent
[05:09:37] uptick in oil, uh June numbers are just that June numbers and perhaps not that June numbers and perhaps not necessarily as um topical as we would
[05:09:49] have thought um before that big oil spike. I mean that's certainly one of the interesting elements uh here. So you spot euro and it looked like it was trying to uh carve out some kind of a
[05:10:04] bottom yesterday of course with that spike in crude oil. The dollar ran and it ran against everything. So we had this break underneath this kind of range right here that was getting carved out >> and we tried to undo that today and boy
[05:10:19] did we fail in spectacular fashion. Um, it's even more dramatic for the pound. If we can look at the spot pound here, I >> Yeah. >> And totally ran away.
[05:10:34] >> Yeah. And what's super interesting here is trying to unpack and I'm curious your is trying to unpack and I'm curious your thoughts. Um, of course, this morning, uh, a US-specific narrative, but this inflation storyline has been, uh, very
[05:10:50] global in the sense of you don't have as much divergence in the currency space or you haven't because you kind of expect a lot of these major central banks to fall lot of these major central banks to fall in similar order. Um but uh of course
[05:11:05] are you seeing that the backdrop here is Europe slightly more exposed uh certainly uh someone like Japan more exposed to these uh crude oil spikes um
[05:11:18] exposed to these uh crude oil spikes um and the inflation fallout and so they might although they're trying to fall uh in line with the hikes that FOMC is in line with the hikes that FOMC is projected to do um perhaps they won't be
[05:11:32] projected to do um perhaps they won't be able to uh what are your thoughts there? able to uh what are your thoughts there? >> So, one um interesting aspect of this equation uh is what's been happening with policy expectations. Uh and you're
[05:11:47] right uh we have a really interesting kind of arrangement there where we had a kind of arrangement there where we had a sort of level shift for most of the sort of level shift for most of the world's central banks. And um we'll uh
[05:12:01] see if we can get it up on the screen here. Um this is a measure of uh rate here. Um this is a measure of uh rate expectations for the major central banks expectations for the major central banks for uh the end of this year. And we can
[05:12:16] see here's the start of the war, right? So we we get this kind of uh synchronized shift. Here's the Fed, there's the Bank of England, there's the ECB, the Bank of Canada. Certainly uh our BA here uh it's across the board and
[05:12:34] we see that when it starts the Fed is the most doubbish of the bunch. Uh it's expected to do 50 basis points in cuts. The uh the Bank of England is a little bit less so, but still 50 basis points in cuts. The war starts. Obviously, the
[05:12:52] game has significantly changed and now what we're looking at here is the Fed's got 35 basis points priced in, but more importantly, it's priced in, but more importantly, it's not the most dovish anymore. Now, that
[05:13:07] are not sure that they're even going to do one hike this year. Uh, and the Bank of England is at 32 basis uh points. So, that's one increase. um some possibility
[05:13:20] of a further change. But what's maybe the most interesting of all in all of this, right? You get this parallel shift and that has not really helped the euro
[05:13:34] against the dollar. It has not really helped uh the pound against the dollar. And it seems to be that maybe what we're looking at is the dollar finding a a
[05:13:46] kind of degree of haven support where it's basically the ultimate liquidity. it's basically the ultimate liquidity. Um and when people cash out of markets, they tend to want to be in dollars because it's the easiest to redeploy.
[05:14:00] of money coming out of other things without going haywire. it can also absorb lots of money coming out to go back out into other things without going haywire because it's just so uniquely liquid. Uh and so
[05:14:17] it's interesting that I mean if you look at where the war starts at where the war starts the story is of a stronger dollar and the fact that the dollar is not the
[05:14:31] holder of yield advantage on these yield differentials that doesn't seem to bother anyone. >> That is interesting. Yeah.
[05:14:44] >> now what's interesting in uh in in all of this context and I think that probably explains how we got this reversal is what's going on in the reversal is what's going on in the bonds. And here's ZB. Uh we can see uh
[05:14:58] yesterday with that crude oil move uh it looked like what was shaping up to be looked like what was shaping up to be maybe an attempt at bottoming failed and we got a breakdown. So it looks like the market is setting up for higher yields
[05:15:12] today. that CPI report attempted to give us a push the other way and look at how us a push the other way and look at how well this held. Uh we're just not going to comply apparently with this CPI report. And to your point, it seems like
[05:15:29] saying this is old news. What we really care about are the hawkish comments from care about are the hawkish comments from Fed Chair Walsh. uh and that's really Fed Chair Walsh. uh and that's really where the uh next sort of catalyst is
[05:15:43] and looking at uh what that implies uh in the bonds here. I mean obviously this in the bonds here. I mean obviously this is uh this is pointing to higher rates. If we look at uh the notes here it's a very similar story. So again we tried
[05:15:58] very similar story. So again we tried to mount some sort of challenge uh here to mount some sort of challenge uh here and clearly it's just not working. were holding the same bottom. So rates seem like they want to go higher. And um if
[05:16:13] we look at the aggregated probabilities here, we've got 68% chance of a rate hike in September. By October, we're at 93%. 93%. So it's a little bit uh less convinced
[05:16:28] that September is going to uh come online. Yesterday was much higher, but online. Yesterday was much higher, but we're still getting that rate hike. uh by certainly October it looks like and then
[05:16:41] [clears throat] we're out uh into the next hike to follow. This is maybe an interesting change of pace. Before we saw that the markets were kind of back and forth on whether we'll get a hike and then an immediate give back next
[05:16:56] and then an immediate give back next year. No, now we're just looking at two hikes on the board. One this year, one next year. What do you make of this? Are next year. What do you make of this? Are you are you a seller of bonds here?
[05:17:09] you are you a seller of bonds here? >> Um, I'm just more sorry, going back to >> Um, I'm just more sorry, going back to uh the rate hike odds that you just uh the rate hike odds that you just relayed. I am surprised still um that we
[05:17:22] relayed. I am surprised still um that we went from almost 50/50 yesterday for July uh in terms of whether we would get a hike. Um now that is 8515. So very
[05:17:34] unlikely that it'll happen. Uh and you really haven't seen uh assets being really haven't seen uh assets being priced uh to the degree of um you know that mattering as much as I would have uh expected. Uh I knew that this
[05:17:50] released this morning would have implications most presently on um the July meeting itself. uh but still such a market certainty that the hike or hikes
[05:18:03] will be coming through the fall um that you really haven't been able to get uh I mean paid out for that view of uh compressing towards no rate hike in July
[05:18:16] or imminently um that it could be September October um but you paint a pretty good picture on those bonds in terms of uh the technical levels that we terms of uh the technical levels that we tried um you know to get ourselves above
[05:18:32] water and really haven't at least thus far. far. >> So here's the SR3 contract here and this is for December so end of this year. You can see the quote here is 9597
[05:18:46] >> Um we'll just we'll just round up. And the way that this works is uh you implied rate. And of course, if you implied rate. And of course, if you subtract 95 97 uh from 100, you get
[05:19:00] 4.03. Uh and so 4.03 gives us a Fed funds rate here. Again, this is a three-month contract, not the overnight. So there's a little bit of a premium there, but we're talking about
[05:19:15] four% at the end of the year, which implies one rate hike. We're currently uh in the uh three and a half to three and a uh three and a half to three and a quarter range. If we're at four, that
[05:19:28] tells us that uh we are uh looking at one hike. If you look at the end of next year, um and you can see by the way these dynamics today where we tried to go lower on rates or higher on the quote. This works just like uh the
[05:19:44] quote. This works just like uh the bonds. uh we are looking at a situation bonds. uh we are looking at a situation where those rates are holding and if you're looking at what that implies by the end of next year that's 100 minus uh
[05:19:58] the end of next year that's 100 minus uh 95.97 is the quote here. So looks like 95.97 is the quote here. So looks like about steady. So, the markets are about steady. So, the markets are seemingly flirting with this um idea of
[05:20:14] how much tightening actually you're going to get. But at least one hike is on the board here and whatever is happening with yield uh today we can see
[05:20:28] happening with yield uh today we can see wars is having an effect and that seems wars is having an effect and that seems to be uh the big takeaway. Um did you get a chance to listen to the man's testimony? I did I did tune into the
[05:20:42] word salad for a little bit, but the >> an award salad it was >> congressional questions are just way too long. I I don't know how um he stays as composed uh as he can. Maybe he's not listening to the questions either
[05:20:58] because uh pretty generic answers. Um but no, I I started listening to it and then uh decided to do anything else with my time. Um, was there anything I missed? Slightly hawkish? >> I was looking at it and it looked like
[05:21:13] >> I was looking at it and it looked like the basic kind of read through was that if we thought this was going to be a dovish fed chair. >> No, papa. >> We were wrong. This is not that. Um,
[05:21:29] this is the Kevin Worsh of old. Now, let's remember Kevin Walsh was uh on the board of governors before uh he was there in the '08 crisis. He actually defended the use of QE in this uh conversation which was interesting and
[05:21:45] and um actually a really good line of questioning from Representative um Richie Torres of of New York. Really kind of deep technical questions. And one of the ones that came up was, "Is QE always inflationary?" and and and and
[05:22:00] how come it wasn't that at least looking at the headline uh figures in '08 and the response from Walsh was a very sensible one that basically said look if then we have crisis and we need liquidity and that's what it is. Um, but
[05:22:18] liquidity and that's what it is. Um, but overall this was a Kevin Walsh, >> how we kind of have come to know him in in in commentary since the '08 crisis when he was on the Fed, he's very
[05:22:32] hawkish. Um, and if we thought that the president was going to get just a yes president was going to get just a yes man to cut rates, this is not what that sounded like at all. He uh emphasized again the Fed's independence and I think
[05:22:47] again the Fed's independence and I think the markets are reacting here um lest we ignore the stock market entirely. Um looking at um what's going on there and
[05:22:59] um I'll I'll look at the continuous contract here. We've gone nowhere contract here. We've gone nowhere basically, but the outlines of what whatever this congestion is, it continues to build and
[05:23:13] higher, maybe it's consolidating before a break lower. Uh what do you think? >> Yeah, I mean this chart definitely looks way more supportive uh to a a possible
[05:23:25] breakout to the upside. I was looking at NASDAQ is a little more interesting because you have in the back of your head it's it's hard not to think anecdotally that we're chopping in an uptrend there. Uh but that um in ter
[05:23:40] triangle of compression looks a lot more neutral now when you're looking over the neutral now when you're looking over the past month and a half. So uh in terms of trying to take emotion out of the the trade and and if you are trading more
[05:23:55] technically then this is where I would look for you know uh a potential breakout to either side. Um but for intra week uh you know we we made it
[05:24:07] intra week uh you know we we made it over the hump of the first big test in over the hump of the first big test in the form of CPI inflation and uh strong bank earnings for the time being. So Thursday, of course, another uh you
[05:24:19] Thursday, of course, another uh you know, kind of earnings test for S&P 500 uh certain stocks in it, but it looks like the the follow through there is not like the the follow through there is not uh fading the initial reaction, but uh
[05:24:32] it appears a bit more constructive. Um so perhaps the the drift is to the so perhaps the the drift is to the upside um until proven otherwise in both. I look at both the NASDAQ and the S&P and I see these outlines of what
[05:24:45] >> Mhm. >> Um this is a pretty rare setup. Uh but >> Um this is a pretty rare setup. Uh but when it comes it comes uh it's it very when it comes it comes uh it's it very impactful um typically um when it works
[05:24:59] impactful um typically um when it works out. It's not the usual kind of thing. But if we are in fact consolidating into some kind of um some kind of a topping pattern and um we were to confirm with let's say a close under here somewhere
[05:25:15] and um I'm a fan of horizontal levels because I think um sloped levels can be very subjective. >> So let's say you know somewhere here call it 29 and change. If you get a close through here, then I think we
[05:25:32] could be looking at a significant significant selloff both here and the S&P. We'll see what finally gives the markets conviction to do that. Um, what do you got going from today into tomorrow? Yeah, I mean we're looking at,
[05:25:47] you know, a PPI tomorrow, but I I'm very curious to see what the close is uh today where the drift is really in that last hour when we're looking at equities and across asset classes. But I'm most excited about the slate for this
[05:26:01] afternoon on Tasty Live. Got live trades with TP at 1. Trading charts with Tim Knight right after >> Chris and TP for last call. And then you're back, my friend. Macro Money 3:30 as always.
[05:26:14] >> Indeed. Uh, and we're going to get all into the CPI data today. Stay tuned. into the CPI data today. Stay tuned. Tasty Live will be right back.
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[05:29:16] Charm Preston and let's start trading today. Okay, some uh big moves in some of the stocks we'll talk about if we have time. stocks we'll talk about if we have time. Um but it's uh 1:00 and right now we
[05:29:30] only about have about 15 minutes to trade a couple of grain products. What I've been looking at recently is corn or wheat. Uh either or maybe both, but probably just one today. Um, looking at a couple of charts, they've had some
[05:29:45] decent rallies. I've had good luck trading corn this year. Cut this rally here. That was a nice little win. Um, it's sold off today. The issue with um the issue going in into the grains right now is the old crop, new new crop. I
[05:30:01] think the um the new crop corn is going to be probably in October, that sort of thing. but they're already going to be looking to what's happening with the with the um with the crops uh this summer. I know corn farmers in Illinois
[05:30:16] um and um they're all, you know, a little concerned about the heat and stuff. A lot of things have to come together to give a decent um uh yield in
[05:30:28] those things. So there might be some upward pressure, continued upward pressure on corn, especially after today's selloff. The point about wheat, today's selloff. The point about wheat, wheat is, as we look in September, um
[05:30:41] that I believe is I'm pretty sure is is going to be new crop wheat. Um and new crop, old crop just refers to old crop is the stuff that's was harvested last year and is sitting in grain silos versus the stuff that has yet to be
[05:30:57] you're a farmer, it means a whole lot more to you than a trader does. But ne in either case, what I see with uh wheat, it's up on the day. Um, has a
[05:31:09] little bit higher volatility. If we look at wheat options, 38% um for the 10 days. Let's take a look at corn. Corn I know is lower. Um,
[05:31:26] look at corn. Corn I know is lower. Um, corn 28% 26% relatively lower lower um lower volatility, but there's still still decent premium. I'm just kind of leaning towards getting long corn. Why? Well, it's king corn. Everybody loves
[05:31:41] corn. Everybody loves an corn in the summer. Um, and hopefully it doesn't have that what is it called that cycllosporasis, whatever that stuff that's all over vegetables these days. It makes me glad that I eat mostly meat.
[05:31:55] But in any case, let's take a look. Just 10 days. Let's do something simple. Um, 10 days. Let's do something simple. Um, again, I'm not I'm not going to be doing my options here. Let's open up 38 days. Let's wait till the options come
[05:32:10] through. Um, you know, I could just sell naked put in you know, I could just sell naked put in here.
[05:32:37] so we can see the numbers. Zoom in a little bit. Okay, there we go. Now we see the buying power effect numbers. So making $31 for 68 $68 max risk. That's a decent ratio. I'm going to ship this before we run out
[05:32:52] I'm going to ship this before we run out of time. At 6:25, send submit trade. let's move on. Um, that's big stocks. Let's
[05:33:09] move on. Um, that's big stocks. Let's check the SPX real quick here. Uh, SPX. check the SPX real quick here. Uh, SPX. So, SPX is up $35 right now. And I'm morning. I don't necessarily want to do an S&P 500X trade right now. I sold an
[05:33:23] iron condor at 9:00. That made money. I took that off after a couple hours. 50% max profit. And that was just because the S&Ps rallied up and stayed there up 35 for most of the day. It's been pretty dull. Um, and the other trade I did was
[05:33:40] dull. Um, and the other trade I did was another broken wing butterfly. I bought the 795 um uh 75 uh05 puts and bought
[05:33:57] um uh 75 uh05 puts and bought uh one of the 7515 puts. Um I did that for a 45 Um I did that for a 45 credit I believe
[05:34:15] vertical back for 10 cents. So I own now the um 75755 put put butterfly for nothing for credit. So I can't lose on the trade. I credit. So I can't lose on the trade. I would really like to see uh a 30 point
[05:34:30] drop and the number of times I can count on one hand. No, I can count on one finger the number of times I've nailed the central strike of a butterfly. It just doesn't happen very much. It's a low
[05:35:21] five bucks today. Five and a half bucks today. Um, let's go to a chart. And I have some of these preloaded. Uh, that's the nice thing about the the web-based platform is I can have four charts on here. Again, I
[05:35:34] here. Again, I don't use charts a whole lot. Um, the only thing the only study I really look at is this implied volatility graph down here, but it's nice. I can, you know, load it up, double click, and um, see
[05:35:46] Palanteer. Palanteer has been been weak. It's the big um, data vacuuming company that has big government contracts as as such. It's it's kind of a defense
[05:35:58] defense stock. Um, I think, you know, as much as I know, it's a very secret does, but I do know it sucks up a lot of data and creates a lot of tools for the government to, you know, defense tools as well as stuff that can improve the
[05:36:12] weaponry if you want to bomb somebody. Okay, great. Um, it's up to date presumably, uh, because, uh, they're going to need more of these quote unquote tools. um if the United States the FUD decides to be the policeman of
[05:36:28] the straightfor but let's take a look at um Pit Palanteer's options Palanteer's got earnings coming out on August 3rd earnings coming out on August 3rd volatility is high 71% IV rank very high
[05:36:43] [clears throat] I like the looks of I like the looks of let's take a look at the skew through earnings. Let's take a look at the skew here. Um
[05:36:57] the skew here. Um the stock's ready to go 135 the stock's ready to go 135 and change. Let's go down uh two points to the 130. Um let's wait until the options come through here. Four. Let's
[05:37:12] options come through here. Four. Let's reload it. We got clear trade. Let's pull up pull up a different.
[05:37:45] Try a different symbol to get these get these options up. the palunteer. Sometimes I have to do this when the internet's slow. Um 17
[05:38:01] days. So let's check the skew. The skew, as I said, was pointing to the upside. Stocks trading at 135. Go down two points, up two points. 33 puts are at uh
[05:38:13] 545. the 37 calls 585 skew pointed toward the upside. Let's go down. Uh, see what credit I get for maybe. And I start the way I just do these short put spreads or any short vertical. I start with the probability. Probability being
[05:38:27] out of the money 68%. That's where I like to start. And then I'll buy two like to start. And then I'll buy two points away. What do I get? 56 credit. Not bad. The markets are relatively tight here. Decent liquidity in here.
[05:38:40] And I don't want to trade through uh earnings on Palunteer. I don't feel like to get a third of the width of the strikes, it's going to be about 60 cents, 66 cents. Let me drag this up to the 2628.
[05:38:53] No, they're not giving it to me. How about the 29 27? There we go. So, I'm about the 29 27? There we go. So, I'm going to buy uh the 27 um put, buy the going to buy uh the 27 um put, buy the Sell the 129 put. Do it at a I'm going
[05:39:06] to try 65 just to see if somebody bites. They probably will not, but you know, the markets are wide here. I'm going to give myself a little room uh to execute this stuff. So, let's ship it. Submit the trade. Boom. Working. All right.
[05:39:20] Let's go into the next one. I was looking at SoFi.
[05:39:35] whacked, but it's been rallying up over the past few weeks. And it's an $18 stock. It does not have a dividend, which is okay. Um, it's could this be a
[05:39:48] which is okay. Um, it's could this be a wheel strategy stock? Perhaps. Um, if you were bullish on a stock like SoFi, what do you get for 10 days out? And I kind of I like doing these short-term trades. The skew 1865 is
[05:40:03] right around 1850. Let's just base it off 1850. 1850 strike. Down a point, up off 1850. 1850 strike. Down a point, up a point. um 42 on the 19 halves. Um 30 a point. um 42 on the 19 halves. Um 30 on the 17 halves. If I sell the 17 half
[05:40:18] on the 17 halves. If I sell the 17 half puts for $29, what what are the numbers puts for $29, what what are the numbers on this trade? 84% probability of making half its max profit of of $29. So about$
[05:40:30] half its max profit of of $29. So about$ 144 $15. 84% probability of making $14 to $15 before expiration. buying power effect is $259. Let's round it up to 260. So, that's actually a decent, you know, it's like a 5% theta return or
[05:40:46] 0.005% theta return on capital. I like that trade. I'm going to and again, if I'm assigned on this put, I'm probably just going to sell calls against it. The IV rank 43% 60, you know, volatility is 60%
[05:41:00] in these things. Let's ship this out at 29% and see if I get filled. Filled at 29. That was fast. All right, let's uh couple of the symbols. Let's take a look at IBM just cuz I know uh IBM is getting
[05:41:17] crushed today. And just just to let you know is last week I did a trade here on know is last week I did a trade here on oops wrong symbol Adobe on Adobe. Adobe sold off. So, Adobe looking at a chart. I sold
[05:41:38] sold a call spread here. Stock rallied up right through it and fortunately it sold off today and I bought it back for a small credit or a small debit. So, I I think I made about 20 20 bucks on the trade. I was happy just to get that.
[05:41:53] It's a volatile stock and for whatever reason it Well, it's down today because of IBM. IBM is, you know, getting whacked on the whole capex thing and spending money on AI and whatever. What's IBM's place in the world? It has
[05:42:08] it's it has its biggest one-day loss since in 60 years just about. It's it's also pulling stocks down like Adobe. So, this selloff in Adobe saved my short call spread in there. The the short call spread was in the money. It
[05:42:24] was looking bad. Sell off today. I just closed it. Um, no harm in taking a small winner and taking the risk off the off the board. But if we look at IBM itself,
[05:42:37] the board. But if we look at IBM itself, IBM's down here. Um, volatility spiked higher. Just look at this volatility chart. It's just obviously ticked up. What are the options doing? 3 days to go. Um,
[05:42:51] go. Um, I don't know. I don't know. Um, I'm not getting enough credit for this stuff for 3 days. I'd have to trade through earnings. Which way is the skew pointed? Let's go to 38 days. Just just for
[05:43:05] argument sake. It's right in between 215 and 220. So 215 down 10 points. Let's say um
[05:43:17] or let's go down 15 with the opening high. So down 215 down to 2 200 strike 825 220 up to 235 uh is 945. So the skew is pointed to the uh is 945. So the skew is pointed to the upside. I'm going to sit on my hands
[05:43:32] with IBM. I don't want to trade it right now. The the markets are okay. There's decent trading volume and you could get filled in this stuff, but I think I'm filled in this stuff, but I think I'm going to wait and see on IBM. Let's go
[05:43:45] into what I was looking at also is some of the more active um stocks traded today by tasty customers. Um and these are just that doesn't say whether they're buying or selling. Doesn't really matter. It's just what's actively
[05:43:59] traded. What are the symbols? That's where I found Palanteer. Um a couple other stocks. SpaceX, the old standby. And I think we'll have time, let me check the Yeah, we'll have time to talk about uh um SKINEX.
[05:44:14] Um, Rocket Lab. Let's take a look at Rocket Lab. RK Rocket Lab has been again, I know because I've been watch Rocket Lab.
[05:44:28] Rocket Lab has been beaten up over the past few months. Nobody likes it. It's one of those Rocket Lab, isn't it? One of those um one of those uh spack things, one of those companies that one of those public companies that somebody
[05:44:43] adopts to launch something. It's I don't even care what they do, but their volatility is really high in these options. 91%. They have earnings coming out. Let's just take a look at it. Let's take a look at 3-day. Let's see what we
[05:44:58] get. 79.82. It's yeah, it's close to 80. Let's let's use 80 as our as our center strike. And again, folks, this is what I do. I just look at the volatility skew. I look at volatility. I look at liquidity. Um
[05:45:14] markets here are pretty tight in Rocket Lab. I like that. So, you know, again, Lab. I like that. So, you know, again, the 76 puts, 110, 118's relatively wide, the 76 puts, 110, 118's relatively wide, 8 cents wide, 4 cents wide here, um 6
[05:45:27] cents wide here, 5 cents wide, 5 cents wide. Not bad for something with a 97% volatility. Okay, so I give hats off to the market makers in here. Um, price is 80. Let's go down three points to the 77. 17 147 147. Uh, they don't have an
[05:45:46] even strike. So, let's go 79. Let's go up um six points. 79 to 85. 96 down six up um six points. 79 to 85. 96 down six points to the 73. So the 73 puts are points to the 73. So the 73 puts are trading at ask as ask price is 53 cents
[05:46:00] 85 calls at 96 cents. So the skew is absolutely pointed to the upside. Let's absolutely pointed to the upside. Let's just click on the 77 puts and see what I get. Um $147
[05:46:21] filled my corn. Yay. with uh a minute ago. Um of buying power. Um that's a little steep. Let's see what
[05:46:35] Um that's a little steep. Let's see what I get if I buy the 75 puts against it. I get if I buy the 75 puts against it. Yeah. See, that to me is a little bit I try this at 58 and I Okay. Okay. I'm not getting a third of the width of strikes.
[05:46:47] getting a third of the width of strikes. Okay, fine. But it's close enough. And you know, that's that's the whole point is I have my certain criteria in my head that I use to create trades, strategies, and I fudge fudge around with them a
[05:47:02] little bit. I'm not going to sell this twopoint put spread for 10. Okay, I'm not doing that. I mean, I would prefer like 65 66 cents, but I'm getting 58. Okay, it's close enough. has a
[05:47:18] relatively low P50 number partly because of the high volatility. Not going to think about that a whole lot in 3 days. So, this number can get kind of screwy when you're looking at very very short-term expiration. 67% probability
[05:47:32] of expiring worth. Let's generate $6.39 in theta. I like it. Let's ship it at uh let's try 59. See if somebody bites. Submit. Working. Let's go on to um let's
[05:47:44] go back into the watch list. Another symbol that I saw was Oracle. And Oracle hasn't get been get much love lately. O RCL
[05:47:57] lately. O RCL is pretty liquid options. If you open these up, um lots of trading in the 38 days in up, um lots of trading in the 38 days in the regular August options. Um
[05:48:12] thousand contracts. Let's go pop up in the open interest. Yeah, thousands of the open interest. Yeah, thousands of contracts and open interest. Uh 3 days, these markets are even tighter as the 3 days. The skew 12966 IV rank uh 53% UV
[05:48:31] days. The skew 12966 IV rank uh 53% UV index 72% for the 3 days pretty high. Let's actually look at a chart of uh Oracle RCL. There it is. Oracle just pummeled. The world hates Oracle. Maybe they just
[05:48:47] don't like Larry Ellison. I don't know. But let's take a look at the skew. Uh 129 and 61. So it's right in between 29 and 30. Down two points to the one 127
[05:48:59] puts 195. Up two points from the 130s 132 222. So the Yeah, just comparing the 132 222. So the Yeah, just comparing the 127 puts to the um uh 132 calls. The Therefore, the skew is pointed to the upside. Let's see what we get for a
[05:49:14] short put spread. Why? Because well, let's just sell a naked put in there and see what the numbers are. Um $2,000. Here's here's the deal. When I doing this this live show, I want stuff to be accessible. I want people to be able to
[05:49:30] participate in these these types of trades if they want to. Again, these aren't trade recommendations, but you know, it's stuff that I look at, stuff that I point out. I don't [clears throat]
[05:49:45] That's why I'm not looking at, you know, shoe those trades. Okay, great. That's that's great for a few people, not so great for a lot of people. I want this stuff to be accessible. I know some people can handle a $2,200 margin
[05:50:01] requirement. That's fine. That's fine. maybe want to sell. If you're bullish on Oracle, you could sell that naked put. Um, on the other hand, maybe you want to turn this into a vertical, as I say, verticalize it. Um,
[05:50:15] 54 cent. No, let's let's drag this up to the 2725. There we go. Look at this number. Look at these things. 64 credit. Um, skews at these things. 64 credit. Um, skews pointed to the upside to generate $5553
[05:50:30] of theta per day. more cuz it's got three days to go. And I just love these short-term options. I don't know why it's it's I get it. I'm I'm a I'm a trade addict. I love options. I think about them all the time. And this
[05:50:43] particular half hour is just one snapshot of the trades I do throughout the day. These are things I'm looking at right now. If I can get 64 credit generating $5.81 81 against a dollar $136 of buying power requirement. That's
[05:50:59] a pretty decent return. The return on theta return on capital. Let's ship it. Submit. Submit. Um let's see what else we got. Okay, so let's take a look. Let's take a look at SpaceX again. SpaceX is down 72. It's
[05:51:16] only down 72 cents. My word. It's usually Hey, filled on Rocket Lab. um.75 that's that's nothing for SpaceX. Um SpaceX is usually a lot more volatile.
[05:51:30] And one of the things that I point out is it's volatility. If you went back when they first launched SpaceX options, volatility was like 200% in the 3-day volatility was like 200% in the 3-day options. It was skyhigh. Now, one of the
[05:51:45] things I will give a lot of credit to the exchanges for is they launched SpaceX options very quickly after after uh after the stock started trading after uh after the stock started trading after the IPO. They did the same with SKH
[05:51:59] Highix. Um SK, let me see if I can get the uh symbol on the first try. SK YH the uh symbol on the first try. SK YH skinex.
[05:52:13] there it is. There they come. So SKH Highix, um, where are my options here? Did I get it right? Yeah. So, one of the things you're not going to see any open interest. They just started trading
[05:52:27] interest. They just started trading today. Um, volatility is 181%. Lower today. Um, volatility is 181%. Lower than um, let's go look at volume. Lower than um, let's go look at volume. Lower than let me get some uh, where's my
[05:52:39] stuff coming through? There we go. volume is the volume data isn't coming through. Let's go into these. Yeah, there's there's some trading in uh
[05:52:52] Yeah, there's there's some trading in uh now this is Sky Harbor. No, this is YH. No, SK
[05:53:04] Hy. That's what I want. Sky Harbor. See, this is, you know, I'm not I don't think I'm dyslexic and flip not I don't think I'm dyslexic and flip those stupid things around. So, skhy
[05:53:18] won't see again, you won't see open won't see again, you won't see open interest today. Um because the trades transactions. Okay. Um and because it just started
[05:53:33] trading today, the options trading today will show up in open interest tomorrow. today. So, I look at volume in this today. So, I look at volume in this stuff. Volume, 6,400 contracts traded at
[05:53:46] stuff. Volume, 6,400 contracts traded at the 170 puts. Um, 30 3,200 have traded the 220 calls. There's some decent activity in here. Markets, look at this. The markets are 10 cents wide for this thing. 5 cents
[05:54:00] wide of the 55 puts. That's not bad. Okay, that's pretty good for a stock with 160% volatility that's only been trading for what, a day, two days? Well, three days. Okay, they came out with the IP
[05:54:14] IP last Friday. 3 days. That's pretty impressive. But here's the problem. If I want to sell a put, well, okay, what's asking. Everybody loves to look at the skew. Um, stocks trading at 88. So,
[05:54:28] let's say the 85 go down 10 points to the 175 puts. Let's go 190 up 10 points the 175 puts. Let's go 190 up 10 points up um to the 2006 $6. So this excuse point to the upside. The problem is if I sell this 175 put the
[05:54:42] buying cover at $17,000. These are cash secured. Okay, because it is an unknown secured. Okay, because it is an unknown product. It is extreme
[05:55:01] Um, the clearing firms do not want to take have customers take too much risk take have customers take too much risk in this. $17,000 sold naked put. No thanks. I don't want to play that game. Let's do let's verticalize it by buying
[05:55:13] a 170 put against it. And I'm getting $130 credit. Not huge. Let's go to the 8075. Oops.
[05:55:25] Oops. 8175. 160. That's what I like. So 5 / 3 8175. 160. That's what I like. So 5 / 3 is about $166 or so. $160 credits high enough. So yeah, generating $12 that Let's just play. Let's just play. This
[05:55:38] is You know what? The market makers are down there in the floor or somewhere in cyerspace making markets for me to trade. Um let's just give it a try. I'm going to offer this out at 160. Fire away. Hey, filled.
[05:55:53] Fire away. Hey, filled. Boom. So that is um SK Highix. Um the the point about SKH Highix is just like we saw in or just like I was talking about in um SpaceX. SpaceX volatility came out of 220% and promptly
[05:56:09] dropped. I wouldn't be surprised if the same thing happened here. Um SpaceX stock dropped along with the introduction of the options. It got introduction of the options. It got hammered. Um but maybe this maybe it'll
[05:56:22] happen with SKH Highex. Maybe not. But I wouldn't be surprised to see this 160 volatility come down pretty sharply. That's why I would not buy options in here. I wouldn't I wouldn't [sighs and gasps] don't buy options in
[05:56:35] in a stock like this. You're paying too much premium. You're generating too much negative theta. It's too you need too many things to go right to make money. That's why I like uh selling a put spread. Don't sell naked options.
[05:56:48] Margins are too high. Too much risk. Sell a put spread. You're bullish put spread. sell this bare sell call spread. That's fine. Okay, folks. This is a bunch of trades um that I'm actually doing live. None of this is a trade
[05:57:01] recommendation. And if you want to trade these things yourself, please do not take any more risk than you're comfortable with.
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[05:59:31] Practice. Welcome to the show today. Welcome to the broadcast, man. Welcome to the Tuesday edition of what it is that we are trying to do. I hope each and every one of you enjoyed your TP Amuse Boo from theory to practice has
[05:59:44] arrived. So, thank you so much for being here and being a part of the show. If Network, now we're actually bounce on over to YouTube because you can join the conversation and join the discussion and you can communicate with your brethren
[05:59:56] who are also watching the show. Man, if you were worried about this morning's print this morning, this morning in the AM today, I don't know why you would be. Negative CPI, sure, it's all made up, right? Deflationary environment, sure,
[06:00:09] it's all imaginary, but man, the market loves it. I love it. You love it. We all communicate with your brethren, celebrate if you're a bull, commiserate if you are a bear, but most importantly, above all else, get in there and pump
[06:00:24] that alone. If you have any questions for me, drop in the drop them in the many as I can right around the halfway mark of the show. But Ben, bring us in, man. Bring us into the market. Let's have a little look see and what's going
[06:00:38] on. Ei S&P is up 31. You've got the risk-free instrument, also known as the NASDAQ futures, which is an extremely high-risk product. If you are brand new to trading, it is very, very, very risky, but it's up another 375. So, I'll
[06:00:52] I'll let you be the judge of its risk-free status or not. Got the Boomers down three7, got the Russell 3000, up nine on the day. You got bonds up six. You got notes up 6 and a half. You got oil up a dollar. You got UB40 up a
[06:01:07] there. Yeah, they're kind of celebrating a little bit. Kind of a half-hearted kind of melancholy celebration with gold up 57. Got the Hunt Brothers. Hunt Brothers. Yeah, but 06 not too bad. But they're up to 59 again, man. Being
[06:01:23] up to 59, man. We really had them right where we wanted them earlier this year with silver over 100. It's all the way back down to 59. Got the British pound is up. Got the euro is up. You got volatility
[06:01:35] futures down 47 cents. You got the VIX, VIX, the old spot volatility down 77 all the way down to 16. Why did I put pants on today? Oh, wait. That's right. I live in Florida. I couldn't even find you a pair of pants. VIX down 77 cents on the
[06:01:52] day. And oh, by the way, I actually tweeted about this. So again, we have so there's no way we're going to get caught up. Not today. There's no chance. Next week, maybe. I don't know. But when we went to South Carolina, we went to the
[06:02:04] adoption thing. My wife told me, my sister-in-law told my wife, my wife then pants for this adoption thing because it won't let him in. Like he can't have jeans. He's got to have like pants pants." I'm talking like slacks, right?
[06:02:18] So, I'm scouring in the closet like I'm scrambling through like clothes and hangers and whatever. I'm like, I cannot find a pair of pants. Like, if my life depended at right now, like it would be over. I would be dead on arrival. Cannot
[06:02:30] I did? I went to South Carolina pantless. I went ahead and found the nearest Goodwill. Your boy got a pair of pants for $5. I wore them to the adoption thing and then threw those pants in the trash. So, wherever there
[06:02:44] is a will, there's a way. like you might have a problem, but there is a solution. And often times it involves going to the Goodwill for getting some disposable clothing. But anyway, I digress. We are back to a pantless world down here in
[06:02:56] St. Petersburg, uh, Florida. But let's get into the portfolio. And I see you guys in there, man. You guys are getting some work done in that chat, man. Look at you guys already in there, man. I appreciate you. Griffin Jones is here,
[06:03:08] man. Sam El Ranch is here. Viggy Zags in the house. PE Leonard is here, man. Luminous Bit in the house. DMZ in the house, man. Let's go. How about JP house, man. Let's go. How about JP Morgan in the house, man? You know, was
[06:03:23] there ever a doubt, guys? Again, was there ever a doubt? Now, again, I'm really rested right now coming off a vacation. I'm really rested and also combination, of course, but I don't know. I mean, mid-season form, I mean,
[06:03:36] losers in a row like you guys know. Like, if you don't know, now you know. But JP Morgan, we actually found a way to get a winning trade. And uh I'm still a little bit unsure as to how that happened. But we're up about a dollar on
[06:03:51] the trade, which again, just doing some quick math, that's like four BUs. That's like four bonefish equivalent units. If you are brand new to the show, we try to make things tangible here. I want to make things real for you guys. Sometimes
[06:04:03] don't mean anything. Sometimes you see positive PO, you're like, I don't know Well, here you go. Right. One bonefish equivalent unit is equal to $25. I mean, it couldn't be more real than that. So, up over a dollar on JP Morgan and uh
[06:04:19] There's no reason to leave it on at this point. It has done So, there's no reason to keep this guy on. We could potentially run it to the profitability, whatever. In my experience, in my opinion, that's a
[06:04:35] mistake. I think a lot of times those things go against you because remember your hands. This applies to both defined risk and undefined risk but more so defined risk. If I have a defined risk strategy on my hands that's a winning
[06:04:48] fact, let's go ahead. Let's break out the final Jeopardy pen if for no other reason than we can and let's break this guy down. So if you look at what we paid for the strategy, we paid 258 for this
[06:05:00] guy. It's currently marking at 380 or thereabouts. It's obviously moving know, we're not going to be able to offer up a surgical level of precision going to be it's going to be close enough. So, if we look at a $5 wide
[06:05:14] spread, right? So, I've got my $5 wide spread. Remember, I paid 258 for it. So, that means that my maximum profit is going to be the difference between $5 and 258, which again, I'm no Julius Spina, but I'm going to say that's about
[06:05:29] 242. Again, we'll put the squiggly lines just in case, but I think that's about my maximum profitability. Well, that's my maximum profit. My maximum loss is this 258 guy. Okay. Well, right now it's actually marking at 380. So, in the
[06:05:45] event that JP Morgan reverses course, like in the event that we've got a taco or an inverted taco or a reverse inverted taco, whatever it is, I can't keep track anymore. We could be in a situation where JP JP Morgan crashed
[06:05:57] Boom Banks. Well, now all of a sudden I'm no longer looking at a profit. I'd be looking at a loss on the trade potentially and my total risk on the trade is not 258 anymore. It's 258 in terms of the loss on the net lick from
[06:06:10] the beginning at trade entry. But things have changed, right? Markets moving, things change. So now we have a profit that's also at risk if we keep the trade on. That doesn't mean you always close every trade that's a profit. That's a
[06:06:22] know, obviously some economic significance there. you've got to be mindful of if it makes sense with commissions and transaction costs and certain point, it's like, okay, it doesn't really make any sense to hold
[06:06:35] this any longer. And I really think we're in that spot right now. I mean, I we're in that spot right now. I mean, I could make another It's marking at 385. at the difference between the mark price and the width of the spread. I can make
[06:06:48] another$1.15, which again, that's over 4 BEu. So, it's not insignificant, right? because we both know that you're going to Bonefish Bonefish, right? I mean, you're sitting at the bar. I mean, it's prime real
[06:07:02] estate. It's just you and your Bang Bang Shrimp. And I mean, we could do that a think it makes a lot of sense to hold this guy any longer. So, we are going to go ahead and pour out a little banana natty for the JP Morgan trade. Don't
[06:07:15] pour out too much, though, because we're only about midway through the victory lap. So, if I go into JP Morgan and I close this guy down. Uh 385. Yeah, we'll give it a shot and we'll see if we get filled there.
[06:07:30] All right. So, no takers at 385. Let's go ahead and uh let's see. Let's see. go ahead and uh let's see. Let's see. Let's see. Let's go to We'll go to 382. That's fine. Uh no takers at 382. Okay. All right.
[06:07:43] Uh no takers at 382. Okay. All right. So, I feel the BEUs are withering away let's go three. Look at these markets down here. Who's running? Who's running the JP Morgan pits? I got Vinnie Batis down the JP Morgan pits,
[06:07:57] Vinnie Batis down the JP Morgan pits, too, man. I don't know. 379. Wow. That's fine on the mid price, but look at that. Is that crazy? Like, am I am I crazy right now? Like, this is JP Morgan. This isn't Salana.
[06:08:10] I mean, this isn't SanDisk. I mean, we're talking about JP Morgan. We're talking about Jamie Diamond. I mean, look at this, man. This is like a $1.70 wide. That doesn't even make any sense. But let's go ahead. We're still going to
[06:08:23] then I feel like they're really going to get me. Man, look at the mid price, too, get me. Man, look at the mid price, too, man. These market makers. They are coming to get us on this little JP Morgan vertical spread. There's just
[06:08:36] nowhere to hide at all. I'm going to go 376. improved. Okay, so the market makers uh there. So that is uh that is some good stuff. All right. So JP Morgan is over
[06:08:48] stuff. All right. So JP Morgan is over and done with. Moving on. The next thing working really well today. MEES is working really well today. Maybe we'll later on in the show. I would say it's not super likely uh given the fact that
[06:09:02] reservation and then we don't usually return. But I want to make sure that we take a look at Starbucks here because this guy is set to expire in 3 days. And show, welcome aboard. I'm glad that you are here. If you are an active trader,
[06:09:18] you are in the right spot. If you are an active trader that wants to use options, you are getting even warmer. If you are an active trader that wants to use options and you want to trade from the short side, man, you are scalding
[06:09:30] scalding hot. Well, this Starbucks trade though, we've had this guy on for, man, me up. It's been what, a year and a half now? Almost two years. We did the first trade in Starbucks on December, it was December of 2024. I know I've brought
[06:09:45] this up before on the show, but let's do it again because we haven't done this in just in case you're brand new. If you're brand new, then I appreciate the fact that you're here and I'm very excited for you. Uh you have a very very very
[06:09:58] world of options and futures and derivatives. And by exciting, I mean it's going to be downright terrifying at times. But if I go to custom times. But if I go to custom and I go to and I go to uh December of
[06:10:12] 2024, it shouldn't be too terrifying. Maybe a little bit terrifying. But if we go to uh I want to say it was I want to say hang on, let's see. I've been on my I missed a day. I'm like two three days in a row now. I think it was December
[06:10:26] in a row now. I think it was December 27th of 2024. So, let me go back to I'll go to December 22nd. When was our first trade? Look at that. Look at your boy, man. So, look at your boy. December 27th, we
[06:10:39] bought our 100 shares in Starbucks. There you go. We did it. And uh yeah, blueberries. We're hitting the jet fuel stuff. We're hitting all that stuff. And
[06:10:51] December 27th, that is when this project began. And you can see that we've done a lot of things since then. We've sold premium. We've done earnings trades. We with like LEAP options. We did a bunch
[06:11:04] simulate, okay, you have a long-term holding. What can I do around the edges? Like, what can I do around the edges to go ahead and, you know, make this position potentially more profitable than just holding the shares? And so
[06:11:20] this has been a really really great project in terms of the uh the long-term project in terms of the uh the long-term applicability of what can be done with options and premium up against a longer term holding where you intend to hold
[06:11:33] the shares uh indefinitely. So that is I mean these are all the things we've done mean these are all the things we've done and uh and yeah so if I go into [sighs] if I go into Starbucks the position now we are short a 105 call
[06:11:48] against our shares Starbucks is at 10661. So we're in the money by just a wee little bit. So what should we do? Well let's make sure we understand all the relevant metrics that are happening right now. Number one
[06:12:03] position. So, something needs to be done here at some point between now and Friday if we intend to hold the shares. If I just wanted to get rid of the Just get rid of the shares." We had a great run. You can see I bought the
[06:12:17] great run. You can see I bought the shares at 92. I mean, this is by far and the course of the last two years. I mean, JP Morgans and Oracles and Hemorrhaging Cash on Dell and blah blah blah blah blah. Nothing has been as good
[06:12:31] as this Starbucks position position because we bought the shares at 92. They're currently selling at 106 and that doesn't even take into account all the things we've done around the edges. And you know, at the end of last year,
[06:12:44] let me think for a second. I think it was like December of 25, we went ahead and we actually calculated our basis on the position. And I think at that time, Starbucks was down like 7%. But we were actually up like 7%. I might be off by a
[06:12:57] couple of percent, but we were actually up uh like 6 or 7% on a stock that fell 6 or 7% because of all the premium that we did around the edges. And so I'll do the same thing at the end of uh at the end of this year, which I think will be
[06:13:10] we have too many other things to do. But uh but the question is what are we going recognize that something needs to be done one way or another. Okay. Number done one way or another. Okay. Number two though, you might be wondering, Jim,
[06:13:22] position? Because Starbucks is was even higher. I think the last couple of days or even last week, I think it got up to 107 or maybe 108. Like if I go in here,
[06:13:34] you can see Starbucks was up to Yeah, it was up to 108 uh just earlier this morning. I mean, yesterday and the day before. I mean, 107 108. So, my 105 call least a couple of dollars. So, the question becomes, why wasn't I assigned?
[06:13:49] Well, whenever you're holding a short option, you can always be assigned. So, could always be assigned when you have a short option. The probability is never zero. When the option goes in the money, the likelihood of assignment does tick
[06:14:04] up ever so slightly above even what was a very small number to maybe now still a pretty small number, but maybe not as small as it was before. So, what is the key metric that you want to monitor when it comes to understanding if you're at
[06:14:17] assignment risk? Well, it's essentially two things. Number one, you want to know if there are any dividends coming up in the stock because if the dividend coming up is greater than whatever the exttrinsic value is in the option, then
[06:14:29] your likelihood of assignment is much much higher because if the long call does exercise the option and assign you on the short call, then they take the shares and they collect the dividend. The reason why you want to compare the
[06:14:43] dividend up against the exttrinsic value is because any long option holder who chooses to exercise, he loses out on whatever exttrinsic value is in the option. Because remember, if he wanted to close his position, he could just
[06:14:56] Well, if you sell an option in the marketplace, you pick up the intrinsic value and the extrinsic value. Well, if I exercise the option as the long call, or it would also apply to a long put. If I exercise the option as a long call
[06:15:10] holder, I only capture the intrinsic value. I do not get any exttrinsic value. So if the extrinsic value in the option was like 50 cents, let's say, but 80 cents, then if you're holding that short call at that moment, you're almost
[06:15:25] certainly going to be assigned because anyone that is trading with economic interest in mind, which I'm going to say is 107% of us, they're going to exercise because it makes sense. But that was not
[06:15:38] Starbucks recently paid a dividend. And so we don't really need to worry about that. But the reason why I wasn't assigned the last few days, even though it was in the money, was actually just from looking at exttrinsic value alone.
[06:15:51] So again, remember, just leave the dividends out of it for a minute. If I just look at the exttrinsic value, if the long side, in this case, the long call, if the long call chooses to exercise, then he loses out on the
[06:16:04] extrinsic value. Well, the extrinsic value that's still left in this call right now is 65. And even when Starbucks was up to 107 or 108, it was probably40 beholder, of course. But that's economically significant, right? I mean,
[06:16:21] 35 cents in the options world is $35 in the actual world, right? And so, it's like, man, that's kind of economically like significant. That's kind of real. And so, most long calls are not going to forego that just to take the shares.
[06:16:35] Now, some of them will because they want the shares for other reasons. They want they're just learning and they might make a mistake. I mean, that can certainly done it many, many times. I still do it to this day. But when you
[06:16:47] look at the extrinsic value alone, it will kind of give you some clues as to the likelihood that you are assigned. In my opinion, and again, I don't have a jive. I'm just kind of pulling this number out of my own personal lived anic
[06:17:02] data. 15 cents. If you've got 15 cents in extrinsic value, the likely maybe even 10. We might be able to get you out the door at 8 cents, but I'm not going any lower than 8 cents. You've got 8 cents
[06:17:15] or more extrinsic value in the option. The likelihood that you're assigned is very, very low. Again, it's never zero, but it's uh but it's very, very, very low. So, what are we going to do right now? Well, honestly, I kind of want to
[06:17:28] hold it for another day just to show y'all that I really don't think we're going to be assigned. And again, we are running down to the wire. I mean, the crystals left in the hourglass, I mean, they are evaporating before our very
[06:17:41] eyes. So, let's hold this for at least one more day, maybe two, maybe even three, because your boy needs that watch time, and we'll just kind of see what circle back to Starbucks in the next uh the next couple of days. But uh but
[06:17:54] Microns, got your Microsoft. Microsoft going down today. So, that's going to be hurting the broken wing butterfly a little bit. But what I want to do is uh then of course I'm going to get to you guys, man. Look at you guys in this
[06:18:07] chat, man. The chat doesn't even know. The chat doesn't even know. The chat has no idea what's happening right now because of you guys and everything that you are putting into the chat. And so uh let's see if I go to We had Cityroup
[06:18:20] today, right? Goldman Sachs was today and obviously JP Morgan was today. And then uh oh, we got Netflix coming up. Okay. So, Netflix, that's going to be Wednesday. Uh, wait, no, no, no. That's gonna be Thursday. Today's Tuesday. So,
[06:18:34] doesn't say whether it's before the bell or after the bell. But Netflix is always your stocks. Some of them are before the bell guys, some of them are after the Goldman Sachs, those are all before the bell guys, right? Netflix always after
[06:18:50] the bell. Apple always after the bell, right? Amazon, AMD, always after the those are all kind of your blue chippers. Those are all kind of like your boomer stocks, man. Like Pepsi, right? Obviously, delicious product,
[06:19:03] even better stock. John Deere is probably another morning guy. And so, morning guy. There's just no way. So, that's got to be Thursday after the bell. And so, I mean, I don't know, man. I mean, I can certainly smell a little
[06:19:16] smoke in the air, that's for sure. But, I also think I smell and expect a move butterfly on a Thursday going into a Friday, man. It's absolutely perfect. The only downside to the expecting move butterfly possibility in Netflix is it's
[06:19:28] only a $70 stock. And so I typically like expecting move butterflies on higher basis, high uh higher price stocks because I feel like it gives you wiggle around. But uh but we'll see.
[06:19:40] us. But let's see if we can do can we do something? I got to be able to do something. Looking at my tasty default. Let me see. IVR. Let's sort from high to low. Microsoft has a 100 IVR, but they have
[06:19:54] earnings coming up. I'm not going to touch that right now. Uh, EM. Yeah. See, earnings coming up. And so, uh, we might have to do something. Uh, let me see here. EM. Is that Mexico? That's emerging markets. Mexico's EW, right?
[06:20:11] Yeah. Yeah. I always get those mixed up. Let's do I'm going to do EWW because there's probably going to be a little bit more juice in the oranges there. So, let's go to August in EWWW. Whoa, look at these markets, man. I
[06:20:25] can't even I can't do this. Look at that. I mean, am I crazy? Look at that. This is a $73 stock. Like, I would expect that if this is a $500 stock or a $600 stock, like that's okay. I expect that. Not in a $75 product. And so,
[06:20:40] yeah, I'm not going to You can't You can't do EW right now. Let me go Let me go back to EM. Hopefully, it's a little bit better. Uh, amazing, but it's okay. This is We can work with this. Now we've got 10 cents
[06:20:54] or 14 cents wide, 15 cents wide, maybe 20 cents wide. Uh more a lot more reasonable than that. Was what, 60, 80 cents, whatever it was. And so that was a little bit a little bit crazy. Let's just do I mean, I kind of think we just
[06:21:06] go with the tried and true, man. Let's just do like a 20 delta strangle, give or take. I'll sell a 60 put and I'll sell a uh I'll sell a 71 call. We'll
[06:21:19] sell a uh I'll sell a 71 call. We'll pick up about $2 on the trade. Uh my pop pick up about $2 on the trade. Uh my pop is 62%. My P50 is 82%. So, we can round that up to 100 for our mental records. Delta is pretty neutral. Theta uh got
[06:21:32] about $6 a day coming in. I mean, that's every 4 days you get a fresh BEu uh sent to your mailbox. Uh I wouldn't necessarily wait for it, but it's in transit. Max profit, max loss, obviously going to be negative infinity. That's
[06:21:45] positive infinity, which you have to make your own decisions. You have to do your own analysis. I'm going to say it's unlikely for me personally. Uh the buying power effect is $765. And uh yeah, I like this trade. Let's
[06:22:00] push this guy out and and then I'll see where you guys are at. So, where you guys are at. So, no takers at 209. Let's try um uh let's get rid of Starbucks here. Man, Starbucks at 106 is so funny. It's just
[06:22:14] so funny because it was like 90 something 80 something. I mean, it was crazy. All right, we got filled at 206. There you go. There's EM. So, we did uh we did JP Morgan, we did EM uh today. So, that's good. Let me see where you
[06:22:26] guys are at, though. Man, look at you guys. I appreciate you guys so very much. Let's see. Let me go ahead uh let's surprise and delight somebody let's surprise and delight somebody uh near the end. Uh let's see. Let's
[06:22:39] see. Let's see. Um, uh, [laughter] oh, well, Griffin Jones says, "What is the bonefish to Goodwill pants multiplier?" Yeah, [laughter] actually didn't know. I didn't know, but
[06:22:53] secret, and I think this is probably what took me down. Like, you got to know going to trade MNQ, you got to know it's $2 a point. Like, if you're going to know it's $20 a point. Like, if you're going to get in there and trade some ZB,
[06:23:06] you got to know it's 31 and a quarter a point, right? I think I took myself down because I walked into Goodwill without that knowledge. And let me tell you the little scam that they're running at Goodwill. So I went So first of all,
[06:23:18] Goodwill. So I had to buy these pants sight unseen. Sight unseen. I had to hope that they fit. And thankfully they did. But anyway, I found my pants. $5 clearance rack, which is every rack at Goodwill obviously. But then I'm asking
[06:23:32] don't have any dressing rooms." I'm like, "Well, first of all, that's crazy." I'm like, "Well, second of all, so what if I want to bring this back?" "Well, you can bring it back within 30 days. No problem. Just make sure you
[06:23:45] have your receipt for store credit only." I was like, "Ah, I see what you're doing here. So, y'all getting me caught in this goodwill loop that I'm you think you know the lease trap? No, but you might know the lease trap. You
[06:23:58] have no idea about this Goodwill trap. They're going to get you in there on the out. You are never getting out. So thankfully I was able to kind of escape by my own free will under my own free
[06:24:11] accord because the pants fit. But uh but yeah it was not uh it was not amazing. did not know the bonefish to Goodwill pants multiplier. And uh it will not happen. It will not happen again. But uh
[06:24:25] making me laugh man. Money wandering Florida is made for gym shorts. That's right. That's correct. Jim, that's 100% correct. And so, uh, let's see. Let's see. Let's go ahead and, uh, man, look at Ben in the chat. Man, Ben is putting
[06:24:40] in some work. Look at our new producer, Ben. He's pumping that algo, man. That's algo. But hey, man, every pump in the algo counts. Like, I mean, we're not same at the end of the day. So, thank you there, Ben. I appreciate you. Let's
[06:24:54] beginning, though. I see SC golfers in the house. Or Daniel, I see you, my Golfer in for the algo. Thanks, Dr. Jim, for all your help. You're the man. I need some negative deltas. Any good ideas? Yeah, you know, I mean, so a
[06:25:08] couple of things. So, number one, you know, I mean, obviously the market's ripping today. CPI inflation's defeated. And by defeated, of course, I mean it's things. But if you want to sell some calls, so if you want to do some naked
[06:25:20] short calls or even call spreads, that would be fine, too. the indexes are going to be a good place to do that because if things go ary like for example if I go into like um I mean like if I went to like if you
[06:25:34] go to like IWM let's say like if I go to IWM I go 38 days away and let's say I wanted some negative delta in my portfolio some negative delta in my portfolio maybe I sell a 304 call right now first
[06:25:48] of all you can see the buying power on this is $4,900 so $5,000 you're going to want to have at least $80,000 in your portfolio to do this trade correctly. to do. And of course, you can spread it off and do a defined risk version of
[06:26:01] this. But just to talk about the short call in a naked sense for just a couple can do the trade the way it's supposed to be. It's the way it's supposed to be done. But here's the great thing about doing a short call in an index as
[06:26:13] opposed to an individual stock. If you do a short call in an individual stock and you are wrong, your eyeballs are melting off your face. Like your soul is getting sucked out of your body never to return. Like it's not coming back. Like
[06:26:27] you sell a call on Micron, it's over. You sell a call on Nvidia, it's over. You sell call on AMD, it's done, dusted, over. But you sell call on IWM, it still losing trade. Obviously, nobody knows what's going to happen, but chances are
[06:26:42] to be able to manage uh over a longer window of time a bit more easily and effectively. And so when I'm looking for short deltas, one of the things I might do is I might look to short calls in the
[06:26:55] indexes as a way to manufacture that delta because I know that the index moves are going to be a lot more muted because again Dell and Micron and Oracle and whatever. I mean they've gone up, you know, 10 30 50 70% in like a month
[06:27:08] or whatever. IWM is not going to do that. I mean of course theoretically is going to happen? I'm going to say no. different things when it comes to trades that don't work, you know, this would be
[06:27:21] bunch of other things you could do too. This is just one example and hopefully it gives you, you know, a little bit of inspiration there, Shane. Uh, but thank you so much for uh for being here. Wolf Wolf is in the house. What is going on
[06:27:33] there, Wolf Wolf? BBB Fine is here. Let's go. Dr. Jim got lucky on another earnings trade. You are hot. Yes. All it takes for Dr. Jim to get hot is one. One in a row. And we are scalding hot. like we essentially have the mightest touch
[06:27:47] right now. So, be very very careful if you want to fade me later this week for uh for Netflix. Uh let's see. Sam L is here. Happy Taco Tuesday, Doc. That's apparently the negative CPI print. You know, just went ahead and did the taco
[06:28:00] administration there. So, they're good to go. Brian Racketin in the house. Word is up. Sam L is in the house. Check out IBM. Man, I can't believe they're still doing it. I really can't either. Uh we need the official Bloop analysis. Is
[06:28:13] this a buying opportunity? Yeah. Aren't they down, man? Look at that. Wow. Okay, so a couple of things. So, number one, is this a buying opportunity? Of course it is. Right. Nobody catches more falling knives than Dr. Jim. Like,
[06:28:28] nobody's hands are more scraped up than Dr. J. So, when I look at a stock and I see it down $70, I don't start asking why. I start looking to buy. And so, for why. I start looking to buy. And so, for I so for IBM, I would be thinking I
[06:28:41] get long. Now, the one thing that I would go ahead and wait on here is earnings are on July 22nd. So, I'm not going to do anything now simply because harder on myself than it needs to be because with the earnings date, that's a
[06:28:58] binary event that's on the calendar. Even if I get the move right over the going to have to contend with that binary event. So, I'm kind of thinking, is only what, a week? Yeah, it's a week from tomorrow. So, let's just wait.
[06:29:12] We'll do something for IBM uh around earnings next week. But yes, 100% bullish on IBM and uh and I don't even need the chart. Like, I know you guys are clamoring for the Bloop analysis, but you can't force the bloop, right?
[06:29:26] find the bloop. But when I look at that right there, I mean, nothing is more right there, I mean, nothing is more bullish than a gap down of about 30%. look, you got your support right there. It's all there. It's all there. It's
[06:29:42] there for the taking. It's slim pickings. Uh or maybe easy pickings. Those are very very different. Uh let's go with Let's go with the easy pickings, I think, is what I meant to say there. And uh there you go. Grumpy Mike. I'm
[06:29:55] week and do something for earnings. There you go. That's what I'm going to do for IBM. Uh point B. Dr. J, I'm ready for the practice. Hope Vacation more man. The six-pack's been gone for it's been a few years now. uh back on duty
[06:30:09] for us today, man. I appreciate you there. Uh point B. And so, no, we're quarter keg at this point. Uh but I appreciate you, Samuel. Doc, we know you like a challenge. Check out the stock SKHY.
[06:30:23] analysis. We just want to hear you pronounce the name, the company name on pronounce the name, the company name on air. Uh SKHY.
[06:30:37] sick hanks. It's got to be sick hanks, right? Sick highs. Yeah, I think sick hanks. Sick hanks. Sorry. Sick sick hanks. So, I mean, I could do a little sick hanks. I could do a little well hanks. Like, I'm not necessarily, you
[06:30:51] dismiss it just because it's sick because we all get a little sick. But, mean, they're an ADR, so that obviously right away is like, all right, what does this company do? What are they trying to sell me? Are they putting viruses on my
[06:31:03] computer? Like what's going on? So, I'm going to pass on this for now. But up 21%. That's pretty uh impressive. So, maybe we could do a little IBM sick hanks pairs trade. And oh, Ben's giving me the actual pronunciation. See, Ben's
[06:31:16] don't we never we never actually loop back around to the correct pronunciation there, Ben. And so, uh I'll take a look at that, but I think Sick Hanks is going to be uh here to say uh or Janu Ben's out to snuff. Ben's got it. And so we
[06:31:31] time. Don't worry about it. And so let's see. Uh or Daniel, hello Dr. Jim. I came minus humor and the banana natties. Yeah, the show's almost over. So I'm now. Uh but that's okay. I mean, if you
[06:31:44] right at about a one show per banana natty uh conversion rate, I think that would be pretty solid. And uh oh, there's Ben getting in the chat. That's Samuel Sick Hanks is the darling momentum stock of the South Korean
[06:31:57] market. Up over 200% year to date. How about a trade? Uh, I'll come back around more comments from you guys and I'm still kind of getting my feet wet. of things. I'll come back around to this. Remind me later on uh later on
[06:32:10] this week. Uh, let's see. There's Shane. Uh, TP sets him and Dr. J knocks him down. Let's get into it, man. Let's do it 100%. Let's do it. Uh, point B. How fast when the stock price is within my strangle strikes. What should I look for
[06:32:26] strangle strikes. What should I look for with 38 days to go? Palanteer 13150 for August 21 expiration strangle. So the question how to know why my credit question how to know why my credit appreciation is not as fast when the
[06:32:39] stock price is within my strangle. So a lot of times uh so point B let's take a first of all you are within your strikes. So that's good. So the first you're looking at a strategy and it's between your strikes is hey this is
[06:32:53] working like you don't need to do anything special. You don't need to make You can just sit tight and let the strategy work and just go live your know, go get that nasty glue pump you've
[06:33:06] now. Right now is the perfect time to go ahead and do that. But when we start or isn't doing a certain thing, you know, remember the three primary drivers of option pricing are always going to be delta, theta, and Vega. Yeah, dividends
[06:33:21] factor in a little bit, but it's very inconsequential when stacked up against direction, which is delta, time, which is theta, and volatility, which is Vega. pretty clear. You can see that, you know, just looking at the delta, you
[06:33:34] day, and you can usually get pretty close. The theta effect is also usually right on your platform, you're like, "Hey, my theta is $7 or $21 or $4,
[06:33:47] things together, you're like, okay, based on the delta, based on the theta, my option price should have done X, but it hasn't done X, it's actually done Y or it's done G or it's done whatever. Well, that missing piece is almost
[06:34:02] always going to be the volatility effect because that's not usually as clear. So if I look at Palanteer, you know, you can go to um I don't know that there's a way to measure historic IVs. Maybe that is possibility. I think
[06:34:17] the devs might be working on that. Uh but we can look at historical IV ranks which that gives us kind of a de facto way to measure the how what the IV itself has been doing over the recent past. So if I go to PLTRIVR
[06:34:36] that over the course of the last couple of days not surprisingly there point B the implied volatility rank is ticking up. So from that we can reasonably deduce that the raw IV itself is also ticking up. Well, if the raw IV itself
[06:34:50] is ticking up, that means the option prices are going higher based on that uptick in implied volatility. Now again, you might be getting the perfect delta move. The theta is obviously helping, but it's the IV that is the stick in the
[06:35:02] mud right now. And so usually, again, look at the delta move, kind of, you know, uh back your way into the theta move, but then take some time to likely is. And that usually is going to tell you uh tell you the whole story.
[06:35:15] bit. Uh Sebastian is in the house. What's going on there, Sebastian? Ashin Ashman? I appreciate you so much, my friend. Uh DMC is here. Let's go. Dr. Jim, uh please show us the best trade on IBM. Yeah, I'm going to wait. You guys
[06:35:29] it's a week from tomorrow, so you don't have to wait too long. But uh definitely bullish, mega pint bullish. Love what the company's doing. And uh really see IBM as a big part of our future. And by a big part, I mean it's probably going
[06:35:42] we'll play it to the upside. We'll play this thing to the upside and see if we can't grab a little something. Luminous pit. I'm here to see how many of y'all faded Dr. Jim on JP Morgan. It hurt again. Fresh off a vacation. You don't
[06:35:55] know what to expect. This is not normal. This is very atypical. And so, let me season right around the corner. And uh it's going to be it's going to be amazing. And so, let's see. Uh, oh, Doc says uh or Sam says J&J earnings
[06:36:10] tomorrow. I guess the Doc special sell a put. I don't know, man. Maybe we'll do Johnson and Johnson, man. I mean, I'm sure they're going to come out and say that they've poisoned a
[06:36:23] come out and say that they've poisoned a good number of an additional That's got to be bullish for the stock though, right? So, if we go in here, I mean, I I think Sam is right. Like I think we just sell this 25 delta put.
[06:36:38] Ooh, that's a little bit too much buying power-wise. That's about 10% of the account. Uh, and yeah, I'm going to pass on that. I'd love to do it. I don't really want to do a put spread only because I don't just eyeballing it. I
[06:36:51] mean, we'll I'll bring it up here really quick and you guys can see. That's not a great price on the put spread in my opinion because you are right on top of about one/ird the width of the strikes. typically like to be closer to 40% the
[06:37:06] snuggling snuggling up against the stock price if I'm getting 40%. But if I'm only if I'm only getting 34% that's just not enough for me to be interested in this uh this put spread and that's what typically happens. Your put spreads are
[06:37:19] cheap and your call spreads are expensive. Like here I'll show you. If I do basically the same trade but on the call side oh that's even worse. Wow. money. So yeah, Johnson and Johnson, I'm going to pass and uh I'm going to pass
[06:37:33] on the products. Uh try to stay away from that poison. And uh yeah, Ranch uh Ranch? Uh PE Leonard in the house. What's going on there, P Leonard? Biggy Zags is here. I saw that the risk-free DAC auction the other day from Ye Old
[06:37:49] Government. The risk-free DAC auction. How do I become a part of this? I don't even know what it is, but it sounds pretty cool. And so, uh, man, I appreciate you there, Vicky Zags, but, uh, I'm not quite following, but, uh,
[06:38:01] you know that I know that you know that I know that I do. And so, SM Doc spent be warranted on our risk-free instrument. That's correct. The ALGO
[06:38:13] bought the dip. That's correct. It's the entity, man. Like, again, like you thought it was over. Like you thought that Tom Cruz saved us all when he captured the entity in that little USB drive. I mean he didn't do it. The the
[06:38:28] in the movie. Uh she did on that little you know that little SanDisk. I think little product placement there at the very end. So that would actually explain couple of months. But again it's not over yet man. The entity will have the
[06:38:42] last laugh in resurrection reckoning. Uh Luminous Bit is here. Uh let's see. Griffin Jones. Let's see. I see USA super tech. Oh, Adam Arfield is here. What's going on? I appreciate you. Ashman is here. Uh, let's see. Uh,
[06:38:58] luxury polyester rough in Florida. goodwill. That's funny. Adam Armfield. Hey Jim. Greetings from Turan, Italy. large here. Uh, squares and the like. You have returned the pants to Goodwill.
[06:39:13] Uh, you could have returned the pants to Goodwill. I couldn't have though. again. playing into their hands. I would have been playing their game, right? I'm not going to do that, man. I'm a free man. I'm a free man. I just wore the pants
[06:39:27] and now I'm stuffing them in the closet just in case this happens again. I was like, why would I do that? Cuz I have a sneaking suspicion this could happen again in the next 5 to seven years. And so, just in case it does, I'll be ready.
[06:39:40] And then I see USA Super Tech is here. Money Wandering is here. Man, I got to man. Look at this work. you guys have done. I see Ant is in the house, man. appreciate you guys so very much. But I gotta run. I appreciate you guys. If I
[06:39:54] please shoot me an email. I am J Schultz@tastylive.com or we can connect on Twitter. I'm J Schultz F3. I would love to hear from you guys on there as well. But stay tuned for Tim Knight coming up next with Trading the Charts.
[06:40:07] train them heavy, and stay optimistic. We'll see you guys tomorrow.
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[06:45:14] to you. Tim Knight here. Uh, we had the CPI roll out this morning and it was ice cold and that's just the bulls wanted to see. We've got a pure green day on our hands. ESQRTY all up. Um, kind of a dull day on my
[06:45:30] end. Um, I haven't really done much of anything with my own positions. Not wasn't the lovely day I had yesterday, of course, giving back some of those profits, but that's okay. That's how things go. Um, today's a little unusual.
[06:45:43] burfage going on. So, I'm going to use my own charting platform instead of the usual tasty one that I feature here on the show. Um, I'll figure it out. Maybe a reboot will will solve things. But the good news is that these charts have all
[06:45:56] sorts of embellishments and markups that I've done. So, um, you take the good advantage. So, let's do that. And having said that, let's jump right in to one of the few things that's on the screen today, which is red and really really
[06:46:10] today, which is red and really really red, which is big blue IBM. Um, I do look at this chart regularly. As of yesterday, I had no special disposition toward it, which is a shame cuz it's lost about a quarter of its value today.
[06:46:24] read this was the biggest drop since the 1960s in this thing percentage- wise. Um, and there's a lot happening in the tech world, of course, and we're not in
[06:46:36] earning season yet for tech companies. IBM's probably 2 or 3 weeks off, but uh you're not going to like what you see. And uh it was at a lifetime high
[06:46:51] see. And uh it was at a lifetime high not that long ago, just back back here. Um, and as you can see, we are back to prices that actually today equal what they were in October 2024. So, almost 2 years of uh of progress uh undone. So,
[06:47:07] years of uh of progress uh undone. So, yeah, the big the big loser today, IBM. Um, but as I mentioned this morning, it wasn't that long ago in market history wasn't that long ago in market history that if IBM was down 25%, it would be an
[06:47:19] epic crash across all markets around the world. Today, it's just like IBM who? Oh. Oh, yeah. Uh-huh. And that's it. Doesn't even matter. Um, so it's really having no knock knock knockoff effects to anybody else. Um, the diamonds are
[06:47:35] down all of uh a penny right now. Shows you how I mean it shows you what a wipeout is flowing from IBM. And they Uh, the ascending trend line for March
[06:47:48] Uh, the ascending trend line for March 30 is just rock solid. We kissed it perfectly today. Maybe we'll break it tomorrow. Could absolutely be. Um but as it is now, it has not broken the uptrend. Um
[06:48:04] the big banks. You get your Wells Fargo, your JP Morgans, your City Banks, and so your JP Morgans, your City Banks, and so forth. Um JPM came out this morning. They opened very weak and they're trading at lifetime highs right now.
[06:48:18] lifetime high on an intraday basis, lifetime high at the present price level. So if it closed right now, it'd be a new high. Um so yeah, um they uh whatever concerns folks had on their earnings report have quickly been
[06:48:33] dispatched and we can see that expressed in the more broad ETF XLF. Um this is the finance ETF. intraday lifetime highs, maybe a lifetime high close on this one. Um, this will be the
[06:48:50] next week is when it gets more interesting with more of the household interesting with more of the household names that we that we all know. Um, now names that we that we all know. Um, now with that chilly chilly CPI news,
[06:49:03] inflation, in some case it was deflationary completely attributable to the drop we we saw in energy prices. Um and therefore we did get an instant rally across the board. Um in a lot of cases
[06:49:20] across the board. Um in a lot of cases that rally was diminished. In fact early on today about half an hour into the trading day it looked like we might even Kevin Worsh is saying the right things in front of of the house. So we are
[06:49:33] in front of of the house. So we are still green. Uh TLT is up a little. Um, it broadly speaking has been in its own bare market for years now, 6 years going bare market for years now, 6 years going and even though it's fairly steady these
[06:49:48] days, it's certainly not um poised for any kind of rally. Um, we have spent the cap past couple of weeks tumbling and sure we're a little bit green today, but out if you want to kind of see what difference it makes. Um the real
[06:50:03] battering in bonds ended back in the autumn of 2023. Since then it's been autumn of 2023. Since then it's been kind of a un unmitigated bore fest. Um as far as IWM goes, this one spiked huge on the uh the news about the CPI but
[06:50:18] on the uh the news about the CPI but gave up a lot of that. Uh it is up now just about a quarter of a percent. We have broken the trend line in this case. So this is much more vulnerable. We first pierced it here, clamorred back
[06:50:32] inside and then past couple of days uh neatly below that trend line. So we have broken this one and this I think is absolutely prone to uh to more weakness. Um I really don't trade precious metals the way I used to, but uh it's
[06:50:49] well. When the news came out, when the CPI came out, gold, just like everything else, went roaring higher. Uh it's still up but definitely not any kind of uh red
[06:51:02] letter day. It's up about 1 and a3%. All it's done is go back to the price levels it's done is go back to the price levels it was trading on Friday. Um and as with uh bonds um it's been in its own private bare market, although much much uh
[06:51:15] bare market, although much much uh younger. This one peaked on January 29 in a very dramatic fashion. And you can see over just two trading days an enormous range. And uh it's been just stumbling its way lower. And uh it's uh
[06:51:30] I imagine the next level of support will be something like around this area with this convergence of this long-term uptrend as well as this big price gap something around here. But um it's still got a little ways to go I would say. Uh,
[06:51:44] as far as silver goes, it also is up, but it also has been down for months. And it is below this major price gap and a very important right triangle top. I'll see if I can whip up a um quick. There we go. Bang. Uh there's a nice
[06:52:01] neat descending trend line showing where resistance has been. And you can see the right triangle very clearly. And we broke below it. We pushed our way higher. Couldn't even get to the base. and are are bleeding out lower again. So
[06:52:15] I don't think silver's done selling off either. Now with the onag again offagain either. Now with the onag again offagain war uh crude oil has been um dynamic. war uh crude oil has been um dynamic. Crude oil right now is um this is a
[06:52:29] really cool chart from the perspective of seeing how support and resistance can change roles cuz just let me point at this one trend line. This trend line anchored like so. As you can see, it was resistance for a very long time. It
[06:52:42] resistance for a very long time. It never got above it and then it exploded above it naturally right after the war was announced on the weekend. So, here's before the war was announced. Had the weekend and then it it uh for the first
[06:52:55] time ever zipped above that trend line. Up we go. And then down, down, down. Check this out. Look what happens. Look where it stops. Is that amazing? It stops to the penny at that trend line. Show you a different angle of this here.
[06:53:09] little bit tighter. There's blue trend line. Resistance, resistance, resistance. Change rolls. Now it's support. And so boing, up we go. And so about done, I would say. I mean, if you
[06:53:24] look at all this overhead supply, it's probably just about done with its lift. So, uh, that's, uh, I don't have any energy positions now, but that that that oil pop is probably just about done. And if you believe that you could
[06:53:39] do worse than thinking about say an XOP short, uh, cuz it too is coming up against its own resistance line. Um, yesterday was a really good day on the short side for for semiconductors. Uh, there's definitely some some uh, fight
[06:53:52] back today uh, in that area. Uh, for example, AXTI up almost 14%. Um, AMD, which actually is I haven't touched in a while. This is uh it's so
[06:54:04] robust. It's very very strong. So, I'm not going near the thing. It's not even my my bare pen watch list, but this is also up. Um, SMH is up about 2 and 2/3%, but this is a still pretty broken uh behavior right here. So, I don't think
[06:54:19] entirely possible we're going to cut below yesterday's lows. uh before this week is out. Um and ARM uh isn't even benefiting from the semibounce. We have cut below to a new multi-month low uh below that green support level for ARM
[06:54:35] below that green support level for ARM holdings. Um and Intel on the other hand is recovering some of yesterday's loss. But here again, this is the key price gap and it's been falling for a couple of weeks now. And so I I think this this
[06:54:48] uh bounce today is kind of a kind of a one-day wonder. Um over in hyperscaling land, uh still seen some weakness in spite of the strong day. Cororeweave spite of the strong day. Cororeweave down about 3 12%. And [snorts]
[06:55:01] worked out yet, which is why I don't trade the thing. But it's interesting to see this start to break down kind of as it's supposed to. Um you know, will it right now? But I don't trust this thing. It's too uh um it doesn't follow through
[06:55:17] in my experience. Uh, Credto Technology, CRDO, very pretty pattern. I'm short this right now. It opened strong today. It's trading weak right now. Um, I'm already short. I might just add to this cuz this
[06:55:30] is a very, very good-looking uh, rounded top. top. Um, changing gears real quick. Uh, Um, changing gears real quick. Uh, Carvana CVNA having a strong day. Um,
[06:55:42] I've got January puts on this. This thing has been just bouncing around like a pingpong ball. So, this is one of those really strong days, but my my view here is that ultimately this will break away down from this diamond pattern. Um,
[06:55:57] a year on them. So, I've got lots of time to wait. A similar company is CarMax KMX, which interestingly is coming right up against its uh major price gap there. So, that's a new short for me today. CarMax over in SpaceX
[06:56:12] going to say it's having a much needed recovery. Not anymore. Uh it's at a new low and the gentlemen were asking me this morning my views on it and I'll think you're just going to see new lows after new lows after new lows. There is
[06:56:28] after new lows after new lows. There is nothing holding this chart up. New highs beget new highs. New lows beget new lows. Here we got new lows. This is could be a double-digit stock before autumn. Um I mean this [snorts] base
[06:56:42] [clears throat] ugly stuff going on here. And um you can see that the the the companies that were trading alongside before there was a SpaceX, anything with a rocket engine on it, um those are doing quite poorly as well.
[06:56:55] Not only because there is a SpaceX now, but because they're, you know, not doing well. So Planet Labs, for example. Rocket Labs up a bit today, but this is Rocket Labs up a bit today, but this is is a very ugly chart. Um China still
[06:57:07] like on the short side now. FXI um got a got a short on this ETF today. I would say that stop loss to be right around that line level. Um, Baba I think is another interesting individual Chinese short and one that is already
[06:57:22] doing nicely today is BYU BU which is breaking below that very well formed head and shoulders pattern right there. Um, and here's a new one for you PDD. I just shorted this one about an hour ago here too. We've got a nice uh reversal
[06:57:36] going away from that dashed red line. Um, last symbol. We're going to bright Bottom of the hour. Uh, plain old spider. And uh, this is still a little
[06:57:50] scary for the one or two bears left out there. We are quite close to lifetime highs. It would take one good day to cut us above this range we've been trapped in for a couple months. Hope it doesn't happen, but it absolutely could. Um, but
[06:58:03] it's uh, we're kind of at a state of equilibrium right now in that level. the past four trading days, we're just kind of stuck right now. So maybe it'll take All right, folks. Well, that's it from me. I'll see you here tomorrow. Thanks
[06:58:16] me. I'll see you here tomorrow. Thanks as always for coming by. Good night.
[06:58:28] >> Mike, what does it mean to be assigned? When you are assigned, you are ultimately short an option that's in the money and the counterparty has the ability to exercise that option. So if you are assigned, it means your option
[06:58:43] against your will ultimately has turned into 100 shares of long or short stock. >> What does a green scratch mean? >> Ooh, a green scratch refers to stubbornness getting the best of you. And when I say you, I mean me. Uh, green
[06:58:57] scratch refers to rolling a position, defending a position, and instead of just closing it for less than uh loss that you're seeing, or maybe a $100 loss, $50 loss, a green scratch is when you close it for maybe a 5-cent winner,
[06:59:10] 10-cent [music] winner, 15-cent winner. Just the ability to see that green number on your screen and get out in a profitable way as opposed to a loss.
[06:59:27] We built Tasty Trades web platform for today's traders. See it, click it, trade it. Research with fundamentals, endless forecasts, and more. Drill into data, find opportunity, and track the action with hundreds of indicators. Track your
[06:59:42] options, profit, and loss history over time per symbol. Note your progress, and plan your tactics with a trading journal. See probabilities, max profit, and Greeks in one click. Fund your account and start trading right [music]
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[07:00:21] >> Hey, bring the alarm, [music] >> boys. Turn up the charm. Listen up, last call. >> Hey, the last call. The last call. The last call. >> TP. We're back. It's time for Last Call.
[07:00:36] Final 30 minutes of a trading day that has quieted down. Not even a million ES traded so far on our screen after 500,000 in the first hour of the day.
[07:00:50] was enough to get the market up today. Uh 75.89 here, 26 point higher on ES. Uh 75.89 here, 26 point higher on ES. Your NASDAQ is up 310 points. That's 1%. Uh oil today has had quite the session. TP, I know you and I are feeling a
[07:01:03] little bit better there. Hey, how are those uh 74 puts? You finally get out of them? >> I closed them at um 5:30 or 6:00 this morning uh central time. cuz I you know I wake up and I
[07:01:16] him trading yesterday. I told you I wanted to buy that put spread back for wanted to buy that put spread back for 14 and I let it go and bought them back this morning for I think it was 9 cents. So I save saved 50 bucks on it again.
[07:01:31] I'm not showing up. That's not my point. It's you know you let these things go. It's a defined risk trade. I had been waiting long enough Chris like you have. I figured uh what's another what's another what's another overnight session
[07:01:46] and I was rewarded by another with another 50 bucks and uh that pays for dog dog food for like a week or something like that. So anyway, I was something like that. So anyway, I was happy about that. Um but but this these
[07:01:58] S&Ps Chris they basically traded in a fivepoint range for the past what time is it like 6 hours. 6 hours. They haven't been doing anything and
[07:02:12] that's been good for me. So, I sold my little iron condor this morning, made money on that. I did a a broken wing butterfly um uh did that did that for I was I bought the um with the zero DTS. Bought
[07:02:27] the um 7495 put. sold two of the 75
[07:02:43] 05 puts and bought one of the 7515 puts. So I was short a 10 um 10point um uh put So I was short a 10 um 10point um uh put spread. Bought that back for a dime. So um took it to did the whole thing. Took in a 35cent credit net. So, I'm left
[07:02:59] with that long butterfly. I'm I need the S&Ps to drop about 20 points here. If you can arrange that, Chris, in the next 25 minutes, I'd greatly appreciate it. >> Preferably not, given where I stand. Yeah, TP. I mean, today was a day for me
[07:03:13] to do a little bit of um shopping, if you will. I saw a bunch of uh things criteria for trying to take a little swing at a dip. Price below the one month, still above the 50-day. Broadly speaking, uh positive return over the
[07:03:27] past 3 months. So for me it was uh a few of the semi-names ASML caught my attention today. I sold a put spread in here on 38 days to expiration 1680 1640. I went over to WDC Western Digital uh 38 days to expiration. So the five 10
[07:03:43] >> WDC >> I haven't traded Western Digital in a while. You know what, Chris? WDC pops up on a lot of lists of um of stuff that's on a lot of lists of um of stuff that's trading that I see. Um that's been
[07:03:56] getting that was that was that's been pretty pretty flat over the past couple of weeks. What did you do in there? Did you lock >> uh selling a put spread at $500 just below there? Um thinking that maybe we
[07:04:09] hold the 50-day like we've been holding since late March. And I mean, times. We hit the bump in there in March, right? But this has been ongoing for the year. So, I'm betting on the year-long trend continuing. Maybe that's
[07:04:23] know what the expression is, but what matters is that I'm long now. So, >> yeah. I mean, seriously, it's it's it's just another symbol. And it's you're longing it. Awesome. That's um the markets are a little wide in there for
[07:04:37] me, but hey, if you got a decent fill, Chris, more power to you. So IBM, nobody loves IBM anymore. Chris, I don't know if you ever remember the old saying about IBM that nobody got fired. Nobody has ever been fired for buying IBM. In
[07:04:52] other words, if you were if you were like in the 60s or 70s and you were some IT person with some company, nobody knew what a computer was. None of your managers did and you had to buy something. You bought IBM because
[07:05:06] "What the hell did you spend our money on? on? IBM would be there to back you up. So those days are over. It today it had its biggest one-day drop in almost 60 years,
[07:05:20] Chris. >> I think it's 1965 or 66 I saw. >> I think it's 1965 or 66 I saw. >> That's insane. That's insane. Um, >> That's insane. That's insane. Um, and you know, is it overdone? I'm I'd be
[07:05:32] very cautious about standing in front of this selloff. I was thinking about selling a put spread in there, but you know what? I don't know. I I I just thinking maybe discretion is the better part of Valor here. And I'm going to
[07:05:46] wait and see if the sell-off continues because it was pretty it was pretty because it was pretty it was pretty convincing. The market hates IBM. just I'm looking here in IBM at the 3 days to expiration. It's trading at 218.
[07:06:00] $7ish dollars in either direction gets you to 210 222 and a half, right? Um it's not like the market has thrown in the towel today and gotten super bearish at least vis the short-term options structure. Is that anything to move the
[07:06:15] away% down stay away >> with what do you with the three days? With the three days earnings are going to earnings are coming out next week >> July 27th. At least this is before
[07:06:28] earnings. If I sell and I'm looking at the expected move. Um, if you look in the upper right hand corner, Chris, you see that $10.19, $1022? That is exactly how I use that number I
[07:06:44] was talking about yesterday. That that expected move calculation. I use that for three-day trades. So, if I were going to go $10 down to the 205s, I were going to go $10 down to the 205s, $10 up or $10? Yeah.
[07:06:58] $10 up or $10? Yeah. $12 down. $12 up to the 230s. Yeah. I mean, collecting about $300 of credit for $3,000 of capital requirement. Maybe I turn that into a 10point iron.
[07:07:15] Yeah, I mean, you you could certainly do that. um you don't get enough you don't get a big credit for it. Um given the given the overall implied volatility that's why I'm saying Chris I'm not I don't
[07:07:28] find it compelling right now you'd have to take a pretty big amount of risk bullish bearish or neutral um to get a decent credit um sawing premium in >> Yeah. And there this was an earnings warning today right? So, to be clear,
[07:07:44] that, by the way, next week could maybe not be so great. Uh, maybe it's 40 chess TP. Maybe they just want to lower expectations. That way, it's easier to expectations. That way, it's easier to beat them. [laughter]
[07:08:00] all I know is that I believe it also took down Adobe and I was short some call spreads at Adobe. um just cuz I just hate the software stocks and Adobe is is is a is a benchmark for the software stocks. I was short the uh was
[07:08:17] software stocks. I was short the uh was it the 22 have 25 puts with three today 3 days to go and it had rallied up through my strikes. It was looking through my strikes. It was looking pretty grim. I was wrong today. Um I
[07:08:30] woke up and it was like trying to get what's Adobe now 219 AD. >> Yeah, 220. they opened up about, you know, down nine bucks and down nine 10 bucks. I was like, geez, I'll take it. And then I saw IBM.
[07:08:46] Um, and so I think that's probably maybe Chris, I don't know, carrying over from Chris, I don't know, carrying over from IBM or something else. Um, driving Adobe down, but I think it's against that whole sort of old school software
[07:09:00] know. >> Yeah, CR CRM was off today. uh service down IGV is up though which is the
[07:09:12] to figure that IBM is the reason why the Dow is doing so poorly today especially considering the uh outperformance of Goldman Sachs [snorts] >> well yeah
[07:09:24] right now given why we've fallen the way that we've fallen in the context of the calendar >> so you know what's interesting with the banks so Goldman up 93 bucks Everybody Everybody hates IBM loves
[07:09:38] Everybody Everybody hates IBM loves Goldman Sachs. Um let's B let's um Wells Fargo FW FWC down. Wells Fargo is down. Cityroup is down. So I had sold I
[07:09:50] Yeah, I got out. I took it out. >> So did I. I saw my winning trade and I took it and I said, "Okay, great. Thank you, Chris Veio." Okay, the ice cream you, Chris Veio." Okay, the ice cream cones on me. And so bought the put
[07:10:05] spread back and then it completely turned around and because I I was I it back a little bit after the open and I didn't really think of it cuz I was doing some other stuff and then I saw it down in the day mid morning. What the
[07:10:18] down in the day mid morning. What the hell's going on with Croup? Um and you know I don't know I Chris I didn't see any news about it. I didn't granted Chris I didn't look for any news. Um, but
[07:10:31] >> you were going through that that the the the 10 Q's reports [laughter] anymore. >> No, I don't. Oh, the 10 Q. No, no, I do >> No, I don't. Oh, the 10 Q. No, no, I do not. Um, I don't have time for that. Um,
[07:10:45] not. Um, I don't have time for that. Um, but yeah, so you had what's um XLF? >> XLF is up a little bit and that's just, you know, the financial ETF has a lot >> a complaint here from Frank. Frank has a a pretty uh nice comment here. The XLF
[07:11:00] options market makers are a bunch of babies as the stock is a penny wide, but the options are 25 cents wide. I actually think that's a pretty they're they're 50. Why are we doing >> which which August
[07:11:12] >> XLF? Yeah, >> XLF. Am I looking at the same thing? 38. >> They're a dollar. [snorts] >> They're fairly tight. XLF >> I'm looking at four cents here. five
[07:11:25] >> Yeah. I mean, no. And you know, Frank, but but see the thing is Frank is never >> That's also true. >> And when and when Frank says somebody's being a baby because the stocks are tick wide and the options are a mile mile
[07:11:39] wide. Yeah, that's I I'm believing Frank is seeing something that I'm missing here. So I'm going to go with Frank. But yeah, I mean >> I I Liz used an expression yesterday that she's like, "Oh, the stock trades a
[07:11:53] all when you see that kind of market structure where you have tight bit on the actual stock itself but the options are are >> Yeah. Yes. So, so as an old market
[07:12:06] maker, granted I was in the in the board of trade. I wasn't I was main markets at 10-year and 30-year options. I was not doing stocks. doing stocks. What you see if if in order to get tight
[07:12:19] bid spreads, you need a tight underlying market. You need a tight future. You need a tight stock. In other words, narrow bit ass spreads for the you're not going to get tight option markets. When you do have a tight bass
[07:12:35] spread in the stock and a wide option market, yeah, that's it's like, come on, folks. Um, let's let's tighten those things up because you have the thing you need, which is a tight stock, liquid stock. Um, and if you're not, forget it.
[07:12:51] I'm not gonna I'm I'm gonna take my ball and go play somewhere else because there are tight markets, tight bid ass spreads in the options that match the tight bass my money. >> TP, I'm looking at the options pricing
[07:13:04] through the rest of the week for the S&P 500 futures. Uh plus or minus 63 points, we'll call it in either direction right now. Market's trading in at 7593. So that's less than 1% effectively through the end of the week. I'm looking at the
[07:13:17] got through CPI, we got through the bank earnings, the earnings the rest of this week, we have ASML, which probably matters. Maybe TSM, Netflix, those >> Yeah. >> How do you approach a week where I mean
[07:13:29] today? Still >> quiet. Too quiet. >> quiet. Too quiet. >> This is brutal and it's killing the VIX. So, yeah, it's I'm still sawing premium here, Chris, because volatility doesn't
[07:13:42] here, Chris, because volatility doesn't lie, right? the whatever volatility is, it is the best estimate. I think the best estimate of how much the index or stock is going to move over a certain amount of time, day, week, month,
[07:13:55] whatever you pick. Um, so yeah, the VIX being 1641 right now, and I'm short a being 1641 right now, and I'm short a VIX put spread in the um in the uh 7-day expiration in the July 22 expiration. Um, I'm short these 15
[07:14:12] half 16 half. So, it's in the money by 10 cents. I'm hoping for a little bit of a selloff in the market that's going to, you know, push it back up. That's what my bet is. Again, it's a it's a lowrisk trade. I'm not, you know, I'm not
[07:14:25] selling naked puts in in the VIX. I mean, I could, but I don't. I'm certainly not selling naked calls in the VIX. You don't want to do that. You don't want to be open-ended short deltas in VIX or volatility products. But the
[07:14:42] in VIX or volatility products. But the point is um the VIX is down today. Um point is um the VIX is down today. Um this complacency is it's whatever it's there's there's low volume. People are get maybe they're on
[07:14:56] vacation. Chris, the biggest thing that I see though and why I think I think this is more maybe what's driving the market is with the inflation data that came out and you can say it's good, bad,
[07:15:11] otherwise but the Fed funds futures are the probability of a sustained rate hike dropped. So in the next one, the next one coming
[07:15:23] out in a couple of weeks, the FOMC meaning the probability of a 25 basis point rate hike dropped. Uh looking further out to the October, November, whenever the whenever the next ones are, the probability is was basically the
[07:15:39] same for a 25 basis point uh increase, but the probability of a 50 um basis point rate hike dropped sharply. So it there's still bias
[07:15:51] towards a 25 point 25 basis point increase um but not anymore. That changed pretty dramatically overnight. >> That I mean that's the SR3 here on the platform like I've pointed out before but for uh new listeners the uninitiated
[07:16:06] screen you subtract that from 100 it gives you your implied Fed funds rate for the expiration cycle. So trading at 95.99 we're effectively saying that the market believes in December expiry 4.01% 01% Fed funds rate. Um going into today
[07:16:20] it was closer to 4.25. So TP to your point the market has lobbed off a second hike for this year. One is still expected to come. I'm curious does this change anything for the bond market for you? Because while those cut odds have
[07:16:35] odds have been receding all day long, it's not like it's been good for yields. over the course of the session again. We're no longer looking at that big decline in tens, twos, 30s. pick a part on the spot on the curve.
[07:16:47] >> Yeah, I I closed some short put spreads I had on in ZN, so it rallied up today. I had on in ZN, so it rallied up today. I took those off for a small profit. Um ZBS? >> Uh I am I'm And you know what? It's
[07:17:03] still technically working because it's the 112 1111 uh long put spread and we're we're below the short strike still. It's 110 and 30 ticks. >> Yeah. See, that's Yeah. then it's I would I think I might join you on the on
[07:17:17] the 30 years here. I I'm not so convinced um um that they're that this that the lower rates or the fear of higher rates that seems to be diminished
[07:17:31] in the short end of the curve is going to continue out through the longer end. I think we could just see, you know, I don't think the 10 and 30year yields are going to drop much further from here. I just I don't know. I just don't
[07:17:46] my little macro monkey brain very easily. If they're not going to cut if two-year yield is probably going to stay pinned, but because they're not hiking going to be looser for longer, relatively speaking. And so, we're going
[07:18:00] to get more inflation and growth. And so, what happens to your yield curve? It gets steeper. And what are we seeing here today? Where's more of the weakness session, twos are holding on to most of their gains. Tens and 30s are not.
[07:18:13] >> So kind of like in real time seeing that textbook like economic textbook theory steepening yield curve would be interpreted. Less Fed hikes, more inflation, perspective. It's an interesting dynamic. And to Chris Chris
[07:18:29] to your point and to make look to make sure everybody's clear about how the bond prices move when we're talking about a steepening of the yield curve that can happen a couple of ways but what specifically it means is that the
[07:18:41] long rates in other words the 10 and the 30 those yields are going to go up a little bit. The the the slope of that curve from the 1 month all the way up to the 30-year yields is going to get steeper. In other words, the right hand
[07:18:55] side is going to be up more relative to the left hand side. And because the 10ens and the 30s have more duration, they're more sensitive to a change in the um to a one basis point change in the yield. Yeah, you could see some
[07:19:09] downward pressure on the 10ens and the 30s. So that's the that's the mechanics of what Chris is describing. >> And this is the yield spread itself, the 10ens minus the two. We can see here how the curve has went from 25 basis points
[07:19:21] >> over the past two weeks. So, we're go we like it's it's showing up now. There's evidence to support this view that the curve may continue to twist and it's So, yeah, I'm still leaning my short deltas here at the long end of the
[07:19:35] of reaching for something out of the money, why don't you just do something that's closer to the money? And it's, you know, long 108 puts wouldn't have worked, but this particular put uh put spread in ZB is.
[07:19:47] >> Yeah. And and that that's just it, Chris, you know, and and we're we're just we're just looking at stuff and looking at opportunities, potential looking at opportunities, potential opportunities in whatever, bonds, notes,
[07:20:00] opportunities in whatever, bonds, notes, right, in IBM, in whatever. And it's right, in IBM, in whatever. And it's really the strategy that Chris and I may let's say we do have completely different views about something. He's
[07:20:14] bullish, I'm bearish, or vice versa. We can use a smart strategy and both going to have huge profits on these my goal is, oh, I'm going to make a million dollars on this trade. It's not
[07:20:27] what I do. I hit a lot of singles. I hit a lot of singles. How much did I make in a lot of singles. How much did I make in that little put spread in in in um in crude oil? I don't know. Like, well, that was a little bigger, but because
[07:20:39] bucks, but it was a big it's a big contract. Something smaller. My Adobe trade, I made 30 bucks on it. Okay, I was happy to make that. These little iron condors that I sell with zero DTE, things like that, I'm happy to make 40
[07:20:53] things like that, I'm happy to make 40 bucks and I do 40 of them a day. Okay, it's that's how it is. I spread the risk out. So, what we're what Chris and I are talking about is we see opportunities and we use a certain strategy, hopefully
[07:21:07] a smart strategy to express that that outlook. You know, we I talk about this little um uh this little dip buying mentality that you could do here. Uh you know, if the price is below the one
[07:21:22] and buy the dip. But that surely works out on the other side, right TP? Like if the price is above its one month but below the 50 and well I it brings up we find ourselves today. We've had this little counter trend bounce in the
[07:21:36] middle of a downtrend bot top left to bottom right. Where are we stalling out here? right near 50-day, right near the former swing low here. This just reads >> to me right now. >> So, it's funny how you got to that like
[07:21:48] I'm looking at the 38 days to expiration. I want to join you in here right now. Um the recent swing high we had is 232. So, just going to the other had is 232. So, just going to the other side of that, you know, could we collect
[07:22:02] >> that's 235 >> 230 235 for 215. I mean, I'd like to see >> 230 235 for 215. I mean, I'd like to see it a higher obviously, but you you you you get what you get and you don't get upset. I don't know if you use that with
[07:22:14] your with your kids, Chris, when handing out popsicles, you know, the different colored popsicles. You get a pink one or whatever it is. And it's like, you know, you get what you get and you don't get upset. Partly because all the popsicles
[07:22:26] really matter. I don't know if you use that line, but it's >> not in this house. I mean, I I can't those grape and lime flavor ice pops. No, thank you. The kids get those. I get the cherries and the blues.
[07:22:39] your your >> I'm the big dog. I'm the big dog around >> That's right. Your your paternal right. You know, you can step in there and take the charity. Anyway, so I agree. Selling a selling call spread in
[07:22:53] agree. Selling a selling call spread in Adobe. And the point is Chris uses technical analysis. Awesome. That just reinforces that I just Okay. I just hate Adobe. [laughter]
[07:23:05] And we both get to the same place. >> And we both get to the same place. Yeah, many stocks that fit this criteria, particularly if I'm looking at like the mega cap, but Baba and Microsoft also above their one month, below their 50. I
[07:23:17] don't know. Should we should I sell a call spread here in Baba? Can we do >> Sure. Fire away. I tell you what I did. >> 2125. >> 2125. >> So I did a lot of trades today. I sold a
[07:23:30] put spread in Oracle. I sold a put spread in Palunteer. Sold a put spread in SKH Highix. Is that Did I just say that correctly? >> Thank you. I've been I've been I've been
[07:23:44] >> Thank you. I've been I've been I've been practicing. I sold the uh 7580 the 1751 180 uh put spread in there for $160. 3 days to go. I just Chris, I was days to go. I just Chris, I was impressed that those markets and I don't
[07:23:57] you're not following him on Twitter, you should. I don't know what Frank thinks about the SKHY options. I think they're pretty tight given that it's a brand new stock and that it has 160% volatility.
[07:24:13] 10-centent wide markets are pretty impressive. I was filled right at the mid price on that put spread. I was pretty happy with that. Uh sold think of the SKHY options? Good and tight or bad? So, we'll get his feedback
[07:24:26] >> No, he's going to I don't know. I don't I don't like to I'm I'm not going to guess what Frankie says. He's very unpredictable in that respect. He's he keeps he keeps you guessing, Chris. So, I sold a put spread in Rocket Lab, sold
[07:24:39] a put spread in corn, um sold a naked put in SoFi. There's a lot of just little trades I did. Um and I'm waiting waiting to get rewarded in my S&P butterfly. I don't think that's going to happen in the next 5 minutes.
[07:24:53] So >> with respect to S&P at the end of this week, what do you think about doing like um you know I'm looking at the options interest has been and you can see at 7 7600 just north of there you're getting
[07:25:07] What do you think about doing like a call fly up at 7600 for the market to week? >> So that's the 17th. >> Yeah, 17th. >> Yeah. So yeah, like buying the the the
[07:25:21] [sighs and gasps] 75 I got to go up here. Buying like the um the 7570, selling the I'm just This is how I do it, folks, is I just put in some strikes. I buy the
[07:25:36] I just put in some strikes. I buy the 7570, sell two of the 7580s, 7570, sell two of the 7580s, and then I'll buy uh the 7590. And I just see what that is for a 75 cent debit. That's not bad for a
[07:25:49] 10-point butterfly. Um, butterflies get expensive when volatility is low. So, just just be aware of that. You could stretch that out. You could stretch that
[07:26:01] out to the 7595 call and do it for a$15 credit. You could do an unbalanced butterfly. Buy the 70s, sell the sell two of the 80s and buy one of the 95s. Um, you do that for a 95cent credit. I
[07:26:18] Um, you do that for a 95cent credit. I kind of like that. >> Fire. >> Let's see what happens here. 7594. Hey TP, you mentioned earlier that uh next ice cream's on me, but hey, with the ZB
[07:26:33] trade, I think the next ice cream should be uh well, vice versa. Here, we're >> Oh, bully me. >> Don't believe you. Hey, [laughter] tell you. >> And I and I got to say it's I want
[07:26:47] >> And I and I got to say it's I want everyone to make money trading, okay? This isn't this isn't me versus Chris. It's not me versus the customers or the viewers or whoever. That's not the [clears throat] point. I hope we all
[07:27:02] make money. And in the big picture, you know, people think it's a zero sum game. know, people think it's a zero sum game. I I don't necessarily buy that. Um, but hey, if Chris makes money being short bonds, awesome. If I didn't do it and I
[07:27:17] way it is. There's there's something else to do. But I don't begrudge anyone making money trading. I hope you all make as much money as you can. every morning is my uh Ape Wisdom website, which brings me together the
[07:27:33] >> [snorts] >> One of the names that I haven't seen in there in a while is Nimbus. NBIS. >> Nimbus. [clears throat] >> Nimbus. [clears throat] >> Nimbus. Uh 99.4 IVR. 16 and a half
[07:27:45] million shares traded today. Down 7.8% so far in today's session. It's a it's not a great looking chart right now. That and Lucid Motors are the two that going through bankruptcy or going private talks right now. So share prices
[07:28:00] have been all over the map today. But it's a low volume day. What is is is it's a low volume day. What is is is Nimbus a um is Nimbus an EV company? >> Uh you know I I believe so it's a it's AI infrastructure
[07:28:13] >> cuz All right. Well, nobody cuz nobody wants electric cars anymore. >> That's the word. Um Nimbus I've never traded it. that more in a little bit. Markets closed. S&P finishes 27 points higher.
[07:28:26] VIX back below 17 oil gy rates but stays below 80. TP, we will see you tomorrow. or for everyone else. Stick around. Over time coming up Next.
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[07:30:37] >> Explain pots. >> Pot odds is my favorite term. Uh, but pot odds in the poker world or gambling world refers to having a greater payout than your implied odds would would suggest. So let's say I have 3 to one
[07:30:53] odds to win a pot, but the pot is giving me 4 to one odds to make that bet. I would have a positive expected value over time. So in trading, let's say you have a defined risk debit or credit [music] spread that's currently at a max
[07:31:07] to go. There's not really a reason to close that position because you're from there. So in that scenario, that something that would give us pot odds to stay in.
[07:31:41] million contracts traded today in ES. Where is everyone? It's still Tuesday, July 14th, 2026. This is over time. I'm your host Chris Vacio in New York. IAP SPC in San Francisco. We're here to take you through the next 27 minutes as we
[07:31:54] wind down uh the trading day, a trading day that was largely defined, Ilia, by what happened this morning at we'll call it the 7 a.m. to 8:30 a.m. Eastern block when we had all those bank earnings come out when we had the US inflation report
[07:32:07] everyone, inflation came in weaker than expected, especially at the core, which attention to the headline after oil's big collapse and an ultimate big rebound >> Well, and and it's interesting how that happened. Uh too, we're going to have a
[07:32:24] deep dive on these numbers on macro money next. Uh and um it feels like it's core, but it's not core is uh the short answer because there was a ton of answer because there was a ton of scarring in the services uh bit from oil
[07:32:38] things like warehousing and and transportation services and freight and that seems to be where you got the weakness in services. But to your point, this was the first month-on-month decline in headline CPI since 2020,
[07:32:56] >> six years. >> So, yeah, this was um this was >> It was certainly something. It moved around the rate cut odds, rate hike odds for the next few months. The December hike odds uh take a big step backwards.
[07:33:11] We were potentially looking at what, like a 60% chance um at one point overnight of uh uh 50 basis points worth of hikes in 2026. We effectively eradicate that 60% chance of two hikes today. We're back down to 95.99,
[07:33:26] today. We're back down to 95.99, which means there's a 4% chance of uh 50 So the CPI report certainly changed the conversation, at least in the short term, for the bond market. Push things back. Two-year yields, they're pinned.
[07:33:39] I went shopping today in the stock market with a bunch of things on discount on my little watch list there and they had some pretty nice sessions happening here at the long end of the curve where we have this mix of hike
[07:33:52] odds and always always always the framework Ilia September 24 the Fed cuts rates bond yields go higher why the market sees reflation so here today as
[07:34:04] the market digest the inflation data yay we don't need hikes 2-year yield gets pinned the 10-year-old goes we don't need hikes oh wait that means we're and higher growth so we can't eliminate that.
[07:34:18] >> the curve >> because it's not just this that has an influence here. It I mean I I'm certainly very sympathetic to that um interretation. U but it's more than that here clearly
[07:34:33] because CPI is not the only thing on this menu. CPI is not the only thing on this menu. >> No. uh get one Kevin Walsh out uh on Capitol Hill >> today and
[07:34:47] >> today and really doing his absolute best to be as hawkish as possible. You wonder if um You wonder if um if perhaps he is attempting to jawbone
[07:35:01] as a policy tool here while his task forces figure out which bogeies they want to pick. Isn't that Isn't that the best case scenario for him? He can talk policy. They don't actually have to deliver it. So, his first move as Fed
[07:35:16] chair is actually a cut. >> Wouldn't that please the boss? >> That would be very smart if it works. It's a it's it's a difficult needle to do. >> You know, I I do need to take a step
[07:35:29] back and just complain for a quick second here, Ilia. It's very clear. I I Committee because these are people who can't legislate themselves out of a lunch bag, right? The Senate is usually the more um the more serious of you you
[07:35:43] have I think it wasn't French Hill, he's the chair. There was someone else who was talking about how like supply side economics demand that you know uh with and that's going to bring down inflation.
[07:36:00] what do you mean? That's not how any of this works. Haven't you learned anything >> I was waiting to see how you would land that ship. I'm like, right. And when you that ship. I'm like, right. And when you get to the end of the nonsense, you feel
[07:36:13] of course on the other side of the aisle, Peter, like Rashidita Talib to give a readout of every single private conversation he has because in her district will have the time to meet with him. Can the House kind of
[07:36:25] like take their job seriously for once? Can Congress actually do what's in their remitt to have oversight for the executive branch and these independent and buttering the role? I mean, it's just it was just I was I was sick today
[07:36:39] but here's what doesn't make me sick, I aside from the fact that we have a justestating old political body in DC that can't accomplish anything. Um, we have a [clears throat] bond market here that's reading through to me like Fed's
[07:36:52] not hiking anytime soon. And even >> here's the interesting thing here is you get this back and forth, right? So you get the soft C uh CPI number, dollar get the soft C uh CPI number, dollar goes, "Oh my god, bonds rally and then
[07:37:05] goes, "Oh my god, bonds rally and then Worsh comes out and goes, who done now?" and tells everybody just how unacceptable inflation is. I mean, how many ways could this man find to say that he's hawkish? We will deliver price
[07:37:19] stability. Higher inflation is not acceptable. We intend to deliver price stability. We have the tools. Our commit to inflation as a taxes and unstick >> He's referred to inflation as a tax on the poor. Like he's going that down the
[07:37:33] rabbit hole. >> I mean, the euphemisms were just I mean, they were like alter egos for Wuang Clan members. They were endless. And so, you
[07:37:45] members. They were endless. And so, you got to this uh situation where the bond market said, "You know how I had a breakdown yesterday? I'm gonna keep that breakdown yesterday? I'm gonna keep that because the CPI is old and what he said
[07:37:58] is new. And so you get this interesting shift where you still have one hike on the menu for this year, but next year you've gotten more hawkish. And so the curve has kind of shifted to
[07:38:13] your point to say maybe you don't get two hikes this year. You're going to get one. Maybe you don't get to, maybe it's spaced out longer, but you should expect these rates to be stickier at higher
[07:38:29] these rates to be stickier at higher levels. So any kind of a a cut is now levels. So any kind of a a cut is now way further out down the line. I did has this become such a problem. He's like, well, listen, a few years ago the
[07:38:42] Fed changed their academic framework for viewing inflation [laughter] and like that was probably bad timing. bad timing. Right. Uh, you know, so
[07:38:54] first principles, which I thought was interesting. Um, first principles of a Jackal Island Fed, I don't know, apply into today's markets, but ultimately at the end of the day, he he seems like he's trying
[07:39:07] >> good. >> He's trying not to be too even. He's or the other. And he said, he's been very clear, unemployment and or rather the employment mandate and the inflation mandate, they can coexist peacefully.
[07:39:19] They need not be um they need not be in contrast with one another. But he did very specifically and explicitly point out the Fed has an easier time addressing the inflation side of the mandate than the labor market one. So
[07:39:31] right now, what does that mean? Well, the labor market is pretty strong still. I know the labor force has come in and it's not, you know, but prime age workforce participation is still at multi-year highs. Um, that's pretty
[07:39:44] obviously in the 4% handle. So, that gives the Fed all of the excuse to focus on the inflation fight right now until we get to like a 5 and a half% unemployment rate. Odds are that the Fed is going to keep trained on
[07:39:58] that particular side of its mandate. So, um, the good news is we're not getting um, the good news is we're not getting >> this ought to be negative for sentiment. >> Downwind. >> Downwind. Yes. Because it means that
[07:40:11] whatever may be happening on economic growth, if it is anything less than peaches and cream all of the time, the Fed is going to be late to respond to any crisis. The Fed's always late. Yes. But here, he's really digging himself
[07:40:26] in. >> Yeah. Yeah. Well, he's going to be late like there's a six-month window where the Fed We don't get anything done until December and then they're going to hike once in December.
[07:40:38] I think if you had a gun to the head, water gun to the head, you know, uh mean, so like SR3 is probably perfectly priced right now. >> Either way though, I mean, yeah, today, you know, I do these little scans. I've
[07:40:54] trading process and put more of those trades out on air." Okay, fine. um below the one month still above the 50. 50 has to be above the 200. So correction within a larger uptrend here. Uh a few things met that criteria this
[07:41:09] at the open. We were talking about this on the morning show before the market open. Unfortunately, I hope some other people got filled. I just couldn't. I was looking to sell the 32315 put spread here today thinking that the market was
[07:41:23] showing those signs of that technical little jiggle. Right? We had fallen open and we were still above the 50 and the 50 is pinned right near the former accumulation zone for the way that I like to trade. I couldn't get filled. If
[07:41:37] market ripped to new highs, I'm here just missing it. Aside from JP Morgan though, a few other stocks did fit that criteria for me. ASML, which has fallen below its one month and is holding up at its 50. um, Take Two Interactive,
[07:41:52] which I can't think of the last time or if I've ever traded Take Two Interactive if I've ever traded Take Two Interactive stock, but it fits the criteria and the volatility is high enough. So, I went in there as well. Western Digital, uh, all
[07:42:05] Digital, likewise, same criteria. It's below its one month, above the 50. It's been in an uptrend. And then, uh, Google, the old Google, which this not quite there, but ever briefly flashed into the screener. and I needed an
[07:42:19] excuse to get long. Uh, finally rolled my M andQ position. It's been the past against its 50-day moving average. You know, I've been doing short put spreads short call spreads against the highs. Both of us are making money here despite
[07:42:33] being on opposite positions. You're short, I'm long effectively, and we're both walking away winners. I rolled my position. Was at 2 days to expiration. No reason to stare this thing in the face. And I took the opportunity to
[07:42:45] adjust the strikes here ever so slightly in MNQ. Instead of being uh 28250, in MNQ. Instead of being uh 28250, 28500, I'm back to 28250 28750 to increase the potential profit profile of the trade. So for me, that was really
[07:42:58] longs, which I was able to get out of in profit today. Can't believe that after few days ago. I'm going to keep saying that. I'm Thank you, Mr. President, as I
[07:43:10] >> texted me that last [laughter] night. Thankfully, President Trump, Thankfully, President Trump, >> thank you. Thankfully, thankfully, I was not sitting on oil longs from way back when. Uh I was getting long oil last
[07:43:23] week. So, I did not get out of my oil longs. I added to to them. Um it looks like we're uh still positioned to go higher here. Um it looks like we we had
[07:43:35] higher here. Um it looks like we we had a breakout. I started uh to buy last week um as we were rounding out that bottom uh doing it through um USO call bottom uh doing it through um USO call verticals. I bought some um more but the
[07:43:50] verticals. I bought some um more but the way I did this today was I actually sold puts and what that did was it brought down uh the overall cost of the position. Once again, by the way, the skew in this market
[07:44:09] is really something people need to look at. again. Now in oil today, you could at. again. Now in oil today, you could go and sell a put vertical and get go and sell a put vertical and get better than one to one riskreward,
[07:44:24] which again means you're getting paid more upfront than the max loss on the more upfront than the max loss on the trade. Now again, not free money, but really great riskreward. And so
[07:44:40] I went in here today, got more long, but did it this way. That took down the overall cost of the position from where I bought a call vertical last week. And I bought a call vertical last week. And I just have more upside exposure, but
[07:44:55] I just have more upside exposure, but with less money. So NASDAQ, I actually u extended my duration and rolled out today as well. I
[07:45:09] had um a couple big pieces of that exposure that were um coming up for expiration in something like 15 or 17 days. So, uh, I just took those off,
[07:45:22] days. So, uh, I just took those off, booked, uh, the, um, the wind there and, uh, put more on, uh, and extended duration out to, um, 48 days more. And duration out to, um, 48 days more. And again, you could go there today and sell
[07:45:36] again, you could go there today and sell calls with better than one:1 risk reward on the vertical. I mean, it it this is one of those things. I mean, this is one of those things. I mean, while it's working, I'm going to do it.
[07:45:53] tomorrow. We We just Is this the biggest event risk day of the week for us? >> We got a lot this week. This is This is like a week of event risk. We got PPI tomorrow. We got retail sales. We got consumer confidence. It's one thing
[07:46:08] >> Is anything as important as I mean, maybe PPI has a little bit of weight headline inflation? Let's see what's moving through the pipeline to actually >> Yes. >> So PPI probably has a little bit of
[07:46:21] And >> retail sales. I think honestly uh for me >> retail sales. I think honestly uh for me the biggest thing this week isn't even the biggest thing this week isn't even the CPI report. It's not even worse.
[07:46:35] It's retail sales and the University of Michigan consumer confidence reports because the biggest thing forget this war the biggest thing happening in the economy this or that way on the
[07:46:50] straight of Hormuz is what's happening with the consumer and the degree to which the consumer is choking on the inflation that is being generated by the inflation that is being generated by the AI boom and if retail sales get whacked
[07:47:03] and they're going to get whacked because there's going to be uh the influence of oil in the equation. So, we're going to have to take gas stations out of the equation and see where core retail sales are. If core retail sales
[07:47:19] are getting whacked and consumer uh sentiment doesn't meaningfully improve sentiment doesn't meaningfully improve even though oil came back in, that's going to be a tell. >> It could be a tell. Yeah, that would be
[07:47:34] the tell. I mean, oil here is up a dollar, we'll call it what, a$126 today. I mean, I this chart here, thinking about the trade component of this, I I still have some long deltas on. I just had a abandoned ship for everything that
[07:47:48] looking across the board here, I'm going to hold these things at a at 34 days to expiration at 62, 63, 70, 71. There's going out at 65. We put this on at the start of the week in the CLV6 contract,
[07:48:01] right? um with first call on Sunday night when the market was still in uh the 6667 just below the recent lows. It looked like we were going to get some upside convexity out in the December contract holding the pre-war lows. So,
[07:48:15] I'm comfortable right now. I had far too much oil on my book. My P&L has swung awfully a lot the last few sessions. Um thankfully thankfully in a favorable wasn't feeling too good a week or two ago. Um, I feel I honestly feel so much
[07:48:31] lighter today than I have in in a while. It's crazy. Uh, so I'm not going to get any new long deltas in oil here, but if I was not an emotional headcase, I would look at that like $77
[07:48:44] a barrel number 77.25 and it is pretty clear over the past month. This has been >> Yeah. >> And we made that we did that pullback earlier today and we could not get below there. 7739 was the swing low for the
[07:48:57] constructive action here. If we get below 7725, I mean that to me would be this week, that to me might be the alarm bell that maybe the short-term supply
[07:49:09] disruption fears that was provoking this backwardation in the oil market today. Maybe that dissipates then because CLU6 Ilia up 1.6%. Uh we can go to CLZ6 only up by 0.21. So this is still very much that
[07:49:24] short-term supply fear type of trade. If it dissipates back months will be more stable. The front month is going to be a little bit
[07:49:36] more problematic. >> Yeah. I mean I think you look at this and you say okay hold on so far you have a trend that's
[07:49:48] building really across maturities in a clean stair step higher. So, as far as I'm concerned, this doesn't need to become duplicate.
[07:50:00] doesn't need to become duplicate. You're looking whether it's CLZ6 or CLU6 You're looking whether it's CLZ6 or CLU6 or even the the the dregs of uh CLQ a few days before expiration. >> They all look the same. It's a stair
[07:50:16] >> They all look the same. It's a stair step higher. This is a breakout and there's room. So, as far as I'm concerned, you get a pullback to concerned, you get a pullback to support, you look for a buy here. You
[07:50:29] look, you see a break of resistance with some headroom, that's a breakout to buy. This isn't complex. And so when we got a break through the
[07:50:42] And so when we got a break through the uh most recent swing high, I added uh most recent swing high, I added especially when you're able to add by selling put verticals with better than one to one risk reward and lock in
[07:50:57] one to one risk reward and lock in excellent conditions. Why not? Uh you know maybe we get a rally back up into the mid 80s. CLQ6, I'm not trading anymore because obviously we're just three two days off Monday for the most
[07:51:10] >> But in in CLU6, I mean, we could I could probably make a compelling case. If we're in a forever war with Iran, which I'd like for someone to tell me that we're not in a forever war with Iran at this point in time. I mean, I think if
[07:51:23] we go out 6 months, we're still going to be talking about the same things we're talking about today. Straight open, straight closed, drone attacks, this that the other thing. Uh, we probably I still think we have a floor here. So,
[07:51:35] let's say this most recent episode passes us by Ilia, >> right? Because there's now a new blockade. No more 20% tolls. Apparently, setting up an easy pass in the street of Hormuz 9,000 miles away from home is
[07:51:48] particularly when the enemy has shoreline right next to it. Really? >> I know. I know. I know. >> Go. I mean, wow. So that, you know, "Yeah, that the the blockade won't apply to, you know, any allied countries, I
[07:52:03] uranium parts." I know he's been tilting at that already, but he comes out and all this market cares about. The market does not care about the war. It doesn't we figured out that there weren't going to be significant grain disruptions and
[07:52:19] energy disruptions. And as time passes and more energy is rerouted away from was going to be 20% of global supply. In reality, it's only been about 10%. Right? If that supply keeps getting
[07:52:32] rerouted, then we're just fighting a war with no market implications again. right now. >> So maybe >> per a permanent cold war, lukewarm war, ceasefire war, whatever we want it floor
[07:52:48] under oil. So, if we get a pullback on this Ilia, I will then jump back into sell some puts and buy the dip. But not today. I need an emotional break and I a certain way. Yeah, I I think we have a situation here
[07:53:04] that lends itself to some sort of a finding of um a middle ground. At least as far as the war is concerned,
[07:53:18] the headlines are coming so quick that all you can really do is trade the price action. But the readout seems to be relatively clear. Again, stocks don't seem to be paying attention to anything and are waiting. They've been waiting
[07:53:35] But what the bonds are telling us today and what the bonds are telling us today and what the dollar is telling us today,
[07:53:48] sooner or higher rates later, but it's going to be higher rates. And so I think going to be higher rates. And so I think those moves now look interesting. The breakout has survived yesterday's breakdown in the uh bonds and rebound in
[07:54:02] the dollar. They've survived the big event risk so far. frankly in adverse circumstances given the CBI. What's interesting for me is what's going on in gold,
[07:54:17] which against the backdrop of all of this is trying to bottom because I'm short. So, I [laughter] don't want it to happen.
[07:54:31] >> At this point, I don't have a position. Uh, I'm long I'm long silver. >> And because I'm doing that through options, um, I can let that sit. So, I'm
[07:54:45] just sitting here looking to see if this is a bottom. >> Yeah. Yeah. Well, I can't do it still. This is just real rates are are just so high right now.
[07:55:00] elevated, it's it's so difficult for me to justify looking longer. Forget the whole narrative around Iran and everything. Last year, you had >> real rates falling to the floor and now they're at multi-year highs. So, Ilia,
[07:55:13] here, I know I'm in a little bit of a particular mood today. Maybe it's the uh, Fuji, Apple, Celsius that's doing it for me, but did you happen to see the budget requests right now? >> Yes. Uh Mike Johnson says the Pentagon
[07:55:27] >> Yes. Uh Mike Johnson says the Pentagon is requesting another $350 billion to fight communism on our own shores. >> Is that so? >> Yeah. You know, I I [clears throat]
[07:55:40] $350 billion to fight communism. It you know, communism is a very specific >> It's a lot of dollars to fight communism. communism. >> State ownership over resources.
[07:55:53] Maybe they can go to the Oval Office and find the guy who's been taking public companies shares and putting them onto the government's roles. I mean, I was told that Republicans opposed
[07:56:05] businesses. Uh, you know, we shouldn't pick winners and losers. Well, I mean, look, if if if [laughter] the government can tax you, it can regulate you, it can subsidize your competitors, it can award contracts, it
[07:56:20] can take stakes in your own company. Um, that's not capitalism anymore. That's communism. That's $350 billion worth of research right there. Pentagon, give me the money. The communism is coming from 1600 Pennsylvania Avenue. Overtime is
[07:56:36] out of time for this Tuesday, July 14th, 2026. will be back tomorrow, same time, same place, 400 p p.m. Eastern, 3 central, right after last call. So for Ilasc, I've been a spicy Chris Veio. See you tomorrow. Up next, more tasty live
[07:56:49] macro money with Ilia. Stick around. >> See you there.
[07:58:52] between the numbers. [music] Some watch from the safety of the sidelines, but others saddle up and ride sidelines, but others saddle up and ride that one ton rowdy ribeye for all he's
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[08:00:45] information that we got today between the CPI report and the first testimony the CPI report and the first testimony in Congress from new Fed Chair Kevin Walsh. What did the markets make of it? Well,
[08:00:59] that depends. Going to try to figure out what it all means and where this is going. This is Macro Money. I'm I Speak, head of Global Macro here at Tasty Live. And the first thing that we are going to do as ever is look at the price action
[08:01:16] do as ever is look at the price action and try to figure out what it all means and try to figure out what it all means from the market's own lips as it were and try to see what the markets are attempting to say with the way that they
[08:01:31] attempting to say with the way that they moved on this information. uh and then of course see if we can't figure out what is coming next because of course
[08:01:43] the key question that we ask ourselves now is okay well now is okay well that was a lot now what that was a lot now what so if you're the stock market you really
[08:01:57] didn't get much of a lead today as a matter of fact not from Kevin Walsh not matter of fact not from Kevin Walsh not from the CPI report, not from the bank earnings that came out today, which were generally good. Uh, and
[08:02:14] none of these things really seem to inspire. Uh, a response. Volume's very low. Uh, barely clearing a million contracts. Um, changing hands on ES
[08:02:26] contracts. Um, changing hands on ES futures. uh we are still sitting in this futures. uh we are still sitting in this um sort of diamond or wedge looking uh consolidation here still in the same range we've uh been broadly occupying
[08:02:40] range we've uh been broadly occupying since mid May and conviction seemingly ebbing the ranges getting narrower volume continuing to decline um and the
[08:02:53] market seemingly deaf to uh what else is going on. Uh deaf to uh what else is going on. Uh crude oil manages uh to pull back intraday after another big surge but uh generally the rebound continues. Uh we
[08:03:08] generally the rebound continues. Uh we are still aiming here uh perhaps uh for are still aiming here uh perhaps uh for a test north of the 83 figure uh on uh a test north of the 83 figure uh on uh WTI because it doesn't look like we had
[08:03:23] any kind of a meaningful reversal more like indigestion uh that follows news that maybe we're not uh going to uh charge a toll uh for the straight of Hormuz maybe the shipping there that the US is now um blockading is only going to
[08:03:42] US is now um blockading is only going to be uh a blockade for uh Iranian vessels and not others and maybe allies don't have to pay. Uh the news is coming hard have to pay. Uh the news is coming hard and fast here and so crude oil at first
[08:03:56] rallies sharply higher and then manages to find its way mostly back. But the gains are sticky. It's just we don't quite make the same kind of headway once
[08:04:09] quite make the same kind of headway once the moderating headlines begin to hit. the moderating headlines begin to hit. And so with that, we end up with a very And so with that, we end up with a very curious situation happening in the bond
[08:04:22] curious situation happening in the bond market. Now, initially we get a soft CPI market. Now, initially we get a soft CPI report and the bonds rally sharply attempting to essentially negate yesterday's
[08:04:35] yesterday's breakdown. Then one Kevin Walsh hits Capitol Hill and the comments that come out out overturn this move almost completely.
[08:04:48] But most importantly, they push the 10-year note here back 10-year note here back below this support. In other words, the intraday rally starts to look corrective. The breakdown yesterday
[08:05:03] starts to look like the real move and the path of least resistance starts to the path of least resistance starts to look like lower bonds, higher rates. Uh look like lower bonds, higher rates. Uh that's not what you get in gold where
[08:05:16] stabilization seems to be the name of the game. We're still holding this broad the game. We're still holding this broad range, but we do manage against the range, but we do manage against the backdrop of this um somewhat pullback on
[08:05:30] rates. Though of course, as we've just discussed, the structure seems to ultimately favor higher rates and lower bonds. We do still get a little bit of moderation versus yesterday. And you can see that here uh in gold it's a little
[08:05:43] bit higher but still looking for conviction uh here but pointedly not running away on the news flow. Uh the US dollar has a bit more of an
[08:05:56] active session. uh it initially gets pounded back into this support uh that pounded back into this support uh that was the uh year-long range from July
[08:06:08] was the uh year-long range from July last year into um June July this year uh where we finally took it uh over with a break on the upside. We continue to find support here though because as we get
[08:06:23] that reversal intraday in the bonds, thank you Kevin Walsh. So too, we get a reversal in the dollar and it's down on the day but it very much still is
[08:06:35] holding the bounds of the up move since late April, early May and again this former resistance turned support level. So So what is it that came in the news flow
[08:06:49] that inspired all this fire and fury in the bonds and in the dollar? Well, we the bonds and in the dollar? Well, we get a much softer CPI report than get a much softer CPI report than anticipated. Uh much softer uh by a good
[08:07:03] margin. As a matter of fact, the headline number comes in, as one might headline number comes in, as one might expect, with the almost 18 19% decline in uh crude oil prices in June and an almost 9% uh decline the month before
[08:07:19] that. All told, between May and June, crude oil fell more than 25%. And so, these numbers were always going to show some sort of a adjustment in the energy component. And it looks like it was a bigger one than anticipated. Uh
[08:07:34] 3.8% was expected. 3.5 is where it came in. But the real story here is what happened at the core. That number came down also from 2.8
[08:07:47] down also from 2.8 uh% expected. Uh we actually got 2.6% and that was down from 2.9. So, the expectation was a very minor wiggle lower and we got a much more significant decline. Uh, if we look at the
[08:08:02] decline. Uh, if we look at the month-on-month figures here, courtesy of U Michael Mcdana over at Bloomberg, we're looking at uh the energy component of course being the dominant source of the decline. core services and core
[08:08:18] goods basically a wash which is how you end up with basically a flat reading on core inflation whereas whereas the overall month-on-month number
[08:08:33] is a decline overall prices actually fell month on month in fact this was the first decline since all the way back here
[08:08:45] since all the way back here at the onset of the COVID outbreak. at the onset of the COVID outbreak. Now, this of course makes for a very everything that we've been talking about visa v the war uh visa v the AI boom has
[08:08:59] visa v the war uh visa v the AI boom has really been focused on what does all of really been focused on what does all of this mean for inflation? And the thing that probably was not really on anybody's bingo card here was that
[08:09:14] inflation was going to actually fall amidst all of this. Now this makes uh amidst all of this. Now this makes uh the of appearance of the internals that
[08:09:26] much more important because you might see this at the headline figure but once you look under the surface to what actually matters for Fed officials this actually matters for Fed officials this is the breakdown that you get. So energy
[08:09:39] is the breakdown that you get. So energy as expected comes in. Food is basically steady. Core goods are basically steady. This pull back in core ends up being something that seems to be occurring in
[08:09:55] something that seems to be occurring in core services. Indeed, if we look at the contribution here, we can see the core uh is coming down. It's weaker really uh is coming down. It's weaker really across the categories but its services
[08:10:10] because it is a much larger component of the whole that really does the heavy lifting on the downside once we take energy out of the picture and what kind
[08:10:23] of a services decline this is starts to matter quite a bit. If we look at just a matter quite a bit. If we look at just a broad breakdown of the core services uh
[08:10:37] situation here relative to goods relative to housing. What we find is uh relative to housing. What we find is uh this is actually a negative month outcome for the core services component. Goods have been easing for two
[08:10:53] Goods have been easing for two consecutive months now. Housing has the smallest month-on-month increase in quite some time. Now, what's all of this disinflation in
[08:11:08] services all about? Well, it seems like when we start to look at the components that it is things adjacent to crude oil. that it is things adjacent to crude oil. And in particular, for example, we see a
[08:11:22] second consecutive month of decline for example, in transportation services. Now, we've talked about the scarring from this meltup in energy prices in
[08:11:35] into things like, for example, shipping services, warehousing services. shipping services, warehousing services. As we look at this kind of a thing, the
[08:11:47] implication is that at least some of the decline in core services is a knock-on effect from oil. The way that some of the increase recently in
[08:11:59] that some of the increase recently in core services. Um we can see of course a sharp jump here comes to some extent from the knock-on
[08:12:11] comes to some extent from the knock-on effect of rising oil. And so there seems to be a sort of back and forth here before this can wash out of the data more clearly and a more clear-cut sort of underlying base for where inflation
[08:12:26] is presents itself. But if we look at is presents itself. But if we look at where the Cleveland Fed's now cast has this going forward, it's anticipating another decline in both core and
[08:12:40] headline inflation in the next month's data. What's more, we can see the Cleveland Fed thought inflation would be higher this goound and the actual numbers undersshot and did so by a pretty wide margin. Now,
[08:12:56] for the core, it this was uh going back to uh the latter part of last year, but for a headline, the Cleveland now cast overshot by the the Cleveland now cast overshot by the most again since 2020. So,
[08:13:12] this was a much weaker report than markets expected. It was a much weaker report than the benchmark now cast from the Fed expected. Um, and so the the Fed expected. Um, and so the response in markets to such a big miss
[08:13:27] and one that really nobody had on their bingo card is fairly interesting because bingo card is fairly interesting because again, if we take a look at the bonds here, we can see the response was, "Oh, wow. That was a big surprise."
[08:13:43] Wait, no, it doesn't matter. And so the the drama in this inflation And so the the drama in this inflation data is almost more noteworthy for how
[08:13:55] much the markets both visibly acknowledged it both visibly acknowledged it and then pointedly dismissed it. And so this is really where things become
[08:14:11] particularly spicy. Why did the markets dismiss this spicy. Why did the markets dismiss this report? Well, in part surely it is that report? Well, in part surely it is that this is to some extent aged data. Uh of
[08:14:25] course we now have uh the situation in oil that uh we find with the resumption oil that uh we find with the resumption of hostilities in the strait of Hormuz. Uh and so uh we are now back into a situation where oil prices are rising.
[08:14:40] situation where oil prices are rising. And if this continues this way, then we are going to be in a situation where u all of these negative effects from the price of oil itself u to all those knock-on effects onto the related
[08:14:56] services that we've just discussed, all of that kicks right back into gear. Uh and so perhaps the markets said, you know what, perhaps the markets said, you know what, this is just way too old. Uh as far as
[08:15:10] uh the data is concerned uh this is just not anything that we can say is a thing we're willing to extrapolate extrapolate going forward. So, it smells like good
[08:15:24] news, but we're not going to take it as such as and until there is something more substantive for us to hang our hat on. But of course, another big part of why the data worked out the way it did in
[08:15:40] terms of the policy uh expectations and the response were comments from one Kevin Walsh who could not find enough ways to say that he is hawkish. We will deliver price stability. He said
[08:15:56] We will deliver price stability. He said the Fed won't pass the buck. He said, "We have some work to do on the inflation front. Our job is to make sure price changes don't broaden into inflation. Higher
[08:16:09] don't broaden into inflation. Higher inflation is not acceptable." is to take sticky prices and unstick them.
[08:16:21] them. So, there's all the uh usual language that you might expect that we've all heard. the commitment to Fed independence, the uh explanation for why the Fed is changing communications
[08:16:34] the Fed is changing communications strategy, a relatively um benign view of the economy if with an uneven housing market. All of if with an uneven housing market. All of this we've heard before, but
[08:16:47] the tone could not have been more hawkish as far as policy itself. The Fed is clearly very concerned with what's going on on the inflation front. Now, uh Wars mentioned the soft
[08:17:01] inflation report and said it's a good step, but it's not sufficient and step, but it's not sufficient and there's a lot more work to do. So, clearly this wasn't just a [clears throat] speech he wrote before
[08:17:15] [clears throat] speech he wrote before the data hit. he seems to have seen the data, absorbed it and decided no, no, we still need to focus on price stability. And so when we look at uh what that means for policy expectations here, what
[08:17:32] we find is we still have at least one hike that's baked in for this year. Although the probability softened just a tad, we're still looking at 26 27 uh tad, we're still looking at 26 27 uh almost basis points baked into the
[08:17:49] picture here. Uh so at least one hike still on the menu. Expectations now that still on the menu. Expectations now that it comes uh sometime uh maybe September, it comes uh sometime uh maybe September, October. Um but we're going to see what
[08:18:02] October. Um but we're going to see what uh that is going to pretend going uh forward and we see a much more dramatic adjustment for 2027. There is a sharp hawkish shift. We're now looking at 11 basis points on the tightening side uh
[08:18:19] on the menu. And so we're approaching 50/50 getting baked in by the end of next year, which is not where the markets were. They thought there was going to be a kind of quick unraveling of hawkish sentiment next year and we
[08:18:36] of hawkish sentiment next year and we seem to be changing tack on that. So as we look at what all of this means then in the context of what the bonds are saying, higher for longer.
[08:18:49] If we are going to get a slower onboarding of rate hikes this year onboarding of rate hikes this year perhaps as a consequence of the data and of the Fed seemingly content for now to
[08:19:02] watch, then we are not going to see anything resembling cuts for a long time because the path to higher rates seems to have the path to higher rates seems to have extrapolated out. We seem to be uh going
[08:19:17] toward higher rates just over a slower cadence. And what happens thereafter, of course, we'll see. But the market seem to have been left with the upshot that at least at the longer end, all of this still
[08:19:31] means borrowing costs are going to look higher. And of course, the Fed is left in a clear bias in favor of doing something about it. And this is uh where the upcoming event risk is going
[08:19:47] to start to get interesting. We get wholesale inflation on the menu for tomorrow. Obviously, it has been marching higher as well thanks to all of marching higher as well thanks to all of uh this uh fire and fury on the uh
[08:20:02] warfront uh as well as of course uh the economy's own inflationary tendencies. We'll get there in a second. Uh looking at the expectations for what's coming next, the headline number expected to come in flat, the core number expected
[08:20:19] to inch up just a bit, 0.4%, there's your impact of energy as energy there's your impact of energy as energy comes back. So to headline inflation uh comes back in the headline year-on-year number seen down from 6 and a half to
[08:20:33] 6.2%. the core seen rising from 4.9 to 5.2. the core seen rising from 4.9 to 5.2. And this is where the nature of the
[08:20:45] And this is where the nature of the economy's inflationary tendencies really starts to come into play because as we just saw in the pharmacy minutes, just saw in the pharmacy minutes, the Fed is uh concerned about inflation
[08:21:00] assuming labor markets largely as they are and says that they probably need to hike given the existing baseline. And when we given the existing baseline. And when we look at why, yes, it's the Middle East.
[08:21:14] Yes, it's the tariffs. But before those things, it's AI related demand. Which once again takes us back to a conversation about how we got
[08:21:27] to 2.1% economic growth in the first quarter when the consumer contributed barely anything. when consumption is six uh 68%
[08:21:41] of the total and by far the biggest the biggest contribution came from a sector 15th consumption's size business investment where we have this huge
[08:21:53] investment where we have this huge tailwind from the AI buildout tailwind from the AI buildout here is the speed at which you have to here is the speed at which you have to run that smaller component onent of GDP
[08:22:08] only 14%. It's got to go up apparently north of 10% annualized to get us this 2.1% growth rate in an environment where the consumer shrinks. And as we consider
[08:22:27] then what this means in the context of today's news, if this starts to look like a consumer that is so thrown off
[08:22:40] that we start to get a negative contribution from uh consumption going forward or indeed it shrinks even further and closer to nothing. Well,
[08:22:52] then it's going to be very difficult for investment to compensate given how much smaller it is than the consumer. And with a hawkish Fed and this sense that they are determined to fight this inflationary scare, you end up in a
[08:23:09] situation where if there were to be some sort of a consumer-led downturn in the economy. This Fed would be slow to act because it seems like they are very much concerned with the other side of the
[08:23:25] concerned with the other side of the ledger. And if that is the case, well ledger. And if that is the case, well then we are in a situation where the Fed starts looking like uh they are going to allow a relatively meaningful economic
[08:23:40] downturn to take shape and of course leaves lots of room for markets to leaves lots of room for markets to repric. Now is this perhaps why gold is repric. Now is this perhaps why gold is refusing to fall? Maybe. Um is this
[08:23:54] refusing to fall? Maybe. Um is this perhaps why uh we are looking at um perhaps why uh we are looking at um the incoming consumption data with such interest later in the week. For me certainly uh but for the PPI report
[08:24:14] certainly uh but for the PPI report if the core increase here if the core increase here looks like we are coming from the sort looks like we are coming from the sort of inputs in the equation that look
[08:24:28] of inputs in the equation that look mainly like the AI boom rather than what we are uh getting from this oil story. If this increase here tells us that
[08:24:41] If this increase here tells us that indeed the AI machine is powering more indeed the AI machine is powering more and more Well, then the pressure on the consumer will only mount and the imbalance that
[08:24:59] is inherent here will only get worse and get us closer to the kind of thing that we already see on display. For example, in Australia, the
[08:25:11] Euro zone and the UK, if we look at the June S&P global PMIs, where in all three June S&P global PMIs, where in all three economies, manufacturing is growing, but the overall economy is shrinking because the service sector is in
[08:25:27] contraction mode, which for PMIs is readings below 50. When you see it below readings below 50. When you see it below 50, that's the sector shrinking. 50, that's the sector shrinking. Above 50 is growth. And so we already
[08:25:41] Above 50 is growth. And so we already see in those economies how the buoyancy that you get from this AI buildout in manufacturing is creating inflationary u inflationary pressure that is
[08:25:56] squeezing those consumers and because in most advanced economies the consumer is the biggest engine of growth that has already pushed those economies into contraction mode. It's not quite there yet in the US, but the recipe for how
[08:26:12] yet in the US, but the recipe for how this works is certainly on display. So this works is certainly on display. So with that in mind, uh exposure wise, uh I am still uh of two minds on the dollar, I am long
[08:26:26] the Aussie, but now short the pound and the euro after the dollar's uh ability the euro after the dollar's uh ability to reclaim lost ground there. Uh I am still long silver and I'm waiting to reestablish something in gold. Uh I have
[08:26:43] reestablish something in gold. Uh I have added to my position in oil that seems to be moving higher but whereas initially I put that on with a call vertical where I added today and the details of all these positions are of
[08:26:57] course on the uh the tasty uh trade follow page as usual. Um the follow page as usual. Um the way that I did it this time uh because
[08:27:09] the riskreward was uh was friendly was to sell puts because once again you got better than one to one risk reward here. Um and so that reduced the cost of the trade while increasing the long side exposure. I've also pushed forward and
[08:27:25] exposure. I've also pushed forward and added into uh the short call verticals I have in NASDAQ and in the S&P where again you get better than onetoone riskreward to do that meaning you get more premium upfront than the max loss
[08:27:40] on the trade and that's just excellent riskreward. So, uh, I rotated some positions out, booked the profits, uh, on those, and re-upted for longer
[08:27:53] on those, and re-upted for longer maturities to keep going. maturities to keep going. That is macro money for today. As ever, we are here right after overtime. That's a show that I co-host with Chris Veio,
[08:28:05] looking at the Wall Street close and where things might go there from. I'm likewise writing for the news and insights portion of tasty.com and commenting at Ilaspac on former Twitter and on Blue Sky. If you're watching this
[08:28:18] on YouTube, like and subscribe. Macro Money returns tomorrow. Happy trading.
[08:29:03] show. My name is Mike Butler. I'm here with Jamal Chandler, and it is Tuesday, July 14th. The banks just reported earnings and we just got the CPI report apparently because the E- Minis were down six and then I looked at the screen
[08:29:17] up. We're we're off and running today, folks. Things are happening. CPI is folks. Things are happening. CPI is hidden. Um I need to I got such long deltas. I need to do um a super bear possibly here. Um we'll see. So um yeah,
[08:29:32] I'm trying to figure out how to structure this thing. But uh wow, nice little move into the CPI print here. Things are running. CPI 3 and a half% Things are running. CPI 3 and a half% versus 3.8% expected and uh X food and
[08:29:45] versus 3.8% expected and uh X food and energy 2.6% versus 2.8%. So, you know, hard here, I would assume. >> And they are. >> It was an incredible it was an incredible uh rip on the open. Minis up
[08:29:58] incredible uh rip on the open. Minis up 35, NASDAQ up 400, Bitcoin up, 1100. Uh 35, NASDAQ up 400, Bitcoin up, 1100. Uh quite a move here. And the initial read was uh some of these banks were down this morning. JP Morgan, I had some call
[08:30:11] uh call calendar spreads. $2 debit though, so pretty cheap. Uh those are though, so pretty cheap. Uh those are down. JP Morgan's down to 326 right now. So, >> we will see how the banks react here.
[08:30:23] >> Also, we got to give a shout out to uh not a shout out, it's not a good thing, but IBM's getting smoked. Apparently, they pre-announced. They don't have earnings until July 22nd and they pre-announced and the stocks down 20%.
[08:30:35] going to affect some of the other semi names here. Um, but yeah, wow, things >> They are moving. >> We're at 7,600 once again in the ES. We
[08:30:47] were dancing around the other day before we ended up tanking yesterday, but yeah, >> Uh, but yeah, got it. >> Before Jamal gives us a quick rundown on channel. We're streaming live there. Just throw in your trade ideas questions
[08:31:00] along the right hand side chat and uh we will get some rapid fire questions answered, trade ideas. Uh lots to talk about this week in these markets. about this week in these markets. >> Yeah, for sure, man. Um let's see. Um so
[08:31:14] I'm looking at right now, uh you said you got filled on a upside one, right? >> Yeah, Super Bowl. >> I got filled really I mean unfortunately I it was filled like a minute before the uh CPI came out. 728.50 uh is when I was
[08:31:30] filled for a 10-cent credit. Yeah. >> But yeah, it was a >> But yeah, it was a >> uh 7500 7490 in the one day. 7500 7490 short put spread to finance the 7565 7580 15 point wide call spread. It's up
[08:31:44] 500 bucks right now. Uh with this strength in the market, I think uh we'll see if we can get a little bit out of this. But yeah, quick win so far. Uh maybe I'll maybe I'll secure it and move it up. I don't know.
[08:31:58] What do you think? >> Um, yeah. I mean, uh, I don't know. >> Yeah. I think I might just get get out of this. Just if this thing fades, I'm >> Are you going to be annoyed? [laughter] >> So, let's try let's just try and get 550
[08:32:13] >> So, let's try let's just try and get 550 out of this thing. Um, I think I need to actually route that. Yeah, I mis routed that. I got to do this for 24hour trading here. But yeah, we'll do we'll do a $500 credit that
[08:32:30] >> I know. And you know, here's the thing. We are lining these up. It is getting in the AM are a little bit different. Like I'm lining up that would credit. I'm getting $2 credit right now for
[08:32:44] that just doesn't seem weird. That seems weird to me. Of course, we would have to fall about 50 handles from here for 480. So 500 buck profit. Nice. Crazy. >> Yeah. Yeah.
[08:32:57] >> I uh Yeah, I totally forgot that that the uh CPI came out right at 7:30. Um but yeah, wild markets here. We had a bunch of banks report earnings. If you yesterday on Tasty Live, you can always check that out. We've got a lot of
[08:33:12] written content coming your way uh there. But I wrote an earnings preview for JP Morgan, Goldman Sachs, Bank of America, Cityroup, and Wells Fargo. and all of those reported before the market opened today. But again, I only had a
[08:33:26] position in JPM. Uh two call calendar spreads, but a total debit of 200 bucks. sure. But uh I'll I'll just buy back these three uh 3-day short options that ride out these 10 days. If we get a reversal, it could be a nice win.
[08:33:42] >> That's awesome, dude. I mean, that um you got to love uh when you get a nice win at some point in time, >> for sure. Especially when my uh zero day Super Bowl yesterday expired 35 cents in money completely. [laughter]
[08:33:55] money completely. [laughter] >> So not great. Not great. Uh but yeah, I think when we got uh when we got the E- Minis up, NASDAQ up, Dow is down, which was the opposite effect of yesterday. Uh the Dow seems to be moving in isolation
[08:34:10] the last couple of days. But let's bring on Chris Veio and see what he's got to say about these uh markets here with the banks down, rest of the market up. What's going on here? It feels like opposite day.
[08:34:24] report this morning really shook things up. Uh guys, do you know what the annualized rate of inflation is with 0% month- over-month inflation? >> I bet it checks out. >> Is this like a damn CFA test with that?
[08:34:38] Don't do that to us in the morning, man. [laughter] >> Okay, but 0% month- over-month core inflation is much better than what the cares about the headline right now because it's all about energy. So over
[08:34:51] the past month or two, you got a 25% decline in oil prices and then over the past week, what another 15% to the upside. So how how accurate is going to care about that actually has the energy input into it? Probably volatile. So
[08:35:03] let's strip it away because if energy is causing a problem throughout the system, Did not appear in the core. So, I think the first thing that we have to look to today, guys, if you want to go to the SR3Z6 contract, uh rate hike has
[08:35:15] effectively come off the board in the past 7 minutes. Um we were leaning towards a second to 25 basis point rate hike this year. We're now back to just one. And that's probably going to be the most important thing about today's uh
[08:35:27] today's market that this pressure valve of potential two hikes and rocketing short-term yields. We just put a break on that trade. >> Craziness. Craziness. Yeah. I think uh I I would
[08:35:41] love to see the CME Fed watch tool uh in the the cumulative change over time. See where we're at now. Um because we've been just rising slowly but surely. What do you think of these uh the E-
[08:35:56] Mini and the NASDAQ kind of opposing the financials with the financials that have led us up quietly over the last couple of months and and a lot of these are >> They are. I mean, if you're looking at some of their earnings, if it's Goldman
[08:36:09] Sachs, if it's uh Bank of America, if it's JP Morgan, they made a lot of money trading stocks in recent months, their uh their fixed divisions, fixed income done very very well. But also, this was a very volatile period in the markets.
[08:36:23] kind of revenue stream if you're not going to see what we just saw through March, April, and into May, right? Um probably difficult. That said, guys, I earnings numbers, were these banks expected to do anything big? Yesterday
[08:36:37] on the show, TP and I were talking about a potential trade in uh in City, for example, looking at the relative volatility in this market and thinking these exciting things? What was it? Broadcom or Micron a few weeks back had
[08:36:50] a 14% plus or minus implied move. My City Group was around 3% yesterday. So, um, yes, good numbers, but where do we go from here? So, short iron condor, I'm thinking 3 days to expiration right now,
[08:37:03] 146, 148, 136, 134, we're basically going to be pinned right at the center point of that. Um, I got a question for you then. If we're managing these were directionally neutral to take advantage of a market that probably gets
[08:37:15] pinned and you're at 3 days to expiration, how are you managing your immediately now that the earnings have come to pass or do you ride this into the sun through Friday? Um, I would say if the markets are
[08:37:29] liquid and you're looking at over 50% profit, I would just rip it off. Um, I think I think you might have a little bit of volatility that stays bid here, [clears throat] exactly flat open here in city. Uh so you might you might
[08:37:47] actually get a bigger increase uh in the premium that you can capture right away are really the ones that create the biggest V crushes just because the market's expecting some kind of move and you get literally nothing.
[08:38:00] Yeah. It just depends on the strategy, right? condor. Yeah. Um, I'm not really I'm not really a a uh you know an earnings trader so to speak, but for for some of these banks and particularly these lower
[08:38:15] enormous like almost material putting the business at risk surprise, it's they're not part of the zeitgeist right now, right? So there's not overpositioning and crowding in these names that could generate that type of
[08:38:30] violent girration after earnings. So, uh, yeah, I I found that I maybe it's dabbled a little bit in their earnings trades, the semiconductor stuff has gone mostly sideways in so far as like not working because the V has been so large
[08:38:45] >> late cycle semies, yeah, but when I'm doing it in like the boring stuff, the like the city groups, it seems to be working out a little bit better. at Goldman yesterday. I couldn't decide what I wanted to do. I actually tried to
[08:38:59] what I wanted to do. I actually tried to get in on a super bull trade um that would have started to really take effect above a above um 1,100, but I never got it off because things were so wide. But um I mean it clearly they did well.
[08:39:13] money. Things are going well with Goldman. So uh stocks making a nice hand moving a little to the downside, right? And um I haven't seen exactly
[08:39:26] what they said. But I'm not sure what the reason is behind it, but um it's little bit delineating from the rest. >> Yeah. And it JP Morgan's JP Morgan's trading. I mean, that was that was it. >> 86% higher,
[08:39:42] >> 6 billion on 2.11 billion more than analysts expected. So like again, how how how repeatable are some of these earning streams when they're tethered to a macro and volatility environment that was historic? You know, you gota
[08:39:56] probably not, you know, probably not sustainable. >> Do we still care about net interest income when it comes to banks? >> Do we? Bank of America had a pretty good net interest income. Uh it was up 9%
[08:40:08] here. They are down before the opening bell. So [laughter] >> this is this is the nature of earnings people. Uh you think you can nail it on way, >> right? Um, but
[08:40:23] >> that's the thing. All the analysts missed today to the downside. All the banks beat expectations handily. Most of the shares are still down. [laughter] >> So, >> classic reversal. Um, yeah, I think it's
[08:40:38] really interesting, especially JP Morgan to see it down, but still within the expected move. And the expected move in JP Morgan was only like 3%. Uh, just super low. So the markets the implied volatility was right in this case in
[08:40:51] volatility was right in this case in terms of uh the realized move being less than implied. Uh which >> not so fast my friend. It's not open >> It's not dead yet. It's not over. >> We still have about 40 minutes till the
[08:41:04] days where they're kind of flat like this and then they reverse or go lower or maybe reverse and go higher. Who knows? Uh I guess we'll it it seems like moment because we walk right in. We got CPI immediately. We got a big bid in the
[08:41:18] market. We got their moves. But uh I don't know if the story is done yet. JP Morgan chart here because I have a you know I'm I run a scan every single morning like what do I want to go shopping for today? And as a trend
[08:41:32] for stocks that have pulled below their one-mon moving average but are still suggesting that a longerterm trend is still in place, but we're merely facing a temporary setback here. Um, my scan this morning has 16 tickers on the list.
[08:41:46] this morning has 16 tickers on the list. ASML, Berkxer, Citycat, GEG, Veronova, JP Morgan, Clack, LRCX, MW, Novartis, Sand, San Sandisk, STX, TSM, and WDC. JP Morgan's on that list. It is a nicel looking stock. If you pulled up the JP
[08:42:00] draw a straight line across at the number 320, you would see that likewise, sitting at 3192. Uh that 320 number is basically the high
[08:42:12] that you have from April 21st. So coupled with a former swing high and this zone where the stock's facing a little bit of a pullback. This is to me an interesting place to look for long deltas for a swing back into new highs
[08:42:25] this is the place where the trend should hold. So my I already have a city trade on, but my priority today is going to be looking to fade this move in JP Morgan. looking the 315 310 short put spread right now sitting at 38 days to
[08:42:39] bit more downward drift right now because this position it is a 68% >> Okay. And I'd like to have my short strike below my 50-day moving average. But right now it's offering worse than a 4 to1 risk-to-reward 407 risk to make
[08:42:53] $93 and only generating 89 cents of theta on a daily basis. So, while I know, a tick because they're five points wide and get that more favorable risk-to-reward I want, I'd prefer to see if this market settles in before getting
[08:43:07] a bigger draw down having just done through that through crude by the way [laughter] I can't believe I unloaded all with you. I'm laughing with you. >> I know. I know. I can't believe I
[08:43:20] unloaded all my crude positions in the last two days at a profit considering days ago. So, but I I don't want to like I have a little bit of that scar tissue want to be biased and emotional about things, but 315, 320, 310, 315, we'll
[08:43:35] That's the first thing I'm looking at on my shopping list this morning. Mike knows this. I've been talking for the last couple of days about banks and banks were going to be down after earnings. Even if they did everything
[08:43:47] right, I want to get short deltas in here. I feel like this is an area to pay attention to going forward especially look CPI seem to have saved the day right now but let's be honest the trend for yields is higher it would seem and I
[08:44:00] be some rotation in the financials already got a little bit of consumer defensive I want to get a little bit exposure in financials and the way I short put spreads >> yeah I think uh these markets are have
[08:44:14] been ripping higher and then kind of uh fizzing fizzling out so this morning got fortunate one minute prior to the CPI, got the Super Bowl on, got the rip, and then it closed it. Uh, and we've sold off 10 points since then. So, maybe
[08:44:29] maybe this is kind of a fake out day where the markets meet the bank's selloff because right now the banks are most of them are down with the E- Minis up. Uh, but going back to crude oil, it's been a crazy market. Three times in
[08:44:42] it's been a crazy market. Three times in a row, I've had uh a position in here where I was expecting to see a profit and I saw an exttrinsic value marked loss because I had this uh 76 straddle. I moved it up from a 76 to a 78 straddle
[08:44:55] yesterday and did that for like a 40cent credit. But either way, it's been a scenario where the market's been up moving closer to my strikes, but exttrinsic value has been expanding way more to and it's been completely
[08:45:08] offsetting my delta. So, uh, I have a $300 marked loss right now, but I have a $300 marked loss right now, but I have a 78 straddle with, uh, $1,000 in premium 78 straddle with, uh, $1,000 in premium collected. We look at MCL. So, it's
[08:45:23] collected. We look at MCL. So, it's crazy. Just nuts. Crude has been crud mean, I I'm looking at this tape here today, guys. We talked about it's like 3% higher. >> Yeah.
[08:45:35] >> I don't know. It feels like the market has learned its lesson, so to speak. boy just because we have war headlines or a little bit of tit for tat doesn't mean mean, how Russia, Ukraine, they're still fighting, right?
[08:45:48] years ago and now the market treats it's just like, you know, it's like the weather. Oh, it's sunny today and Russia Ukraine are at war. So, obviously there's greater energy implications here for what's happening. But
[08:46:01] unless we go out into an allout war, I mean, what is the incentive? I'm just a general question. I'm reflecting my own psychology here. In March, you could oil thinking this thing was going to get worse. How do you how do you justify
[08:46:14] taking an aggressive oil long delta position right now and not feel incentivized to fade this thing given the given the reasons why we got here? the given the reasons why we got here? >> Um I think you justify it by making it
[08:46:28] talking my book here cuz yesterday I just finally decided to get back in. I didn't I wasn't interested in getting into oil when it was you know back below 60s. It just seemed like it was a done trades. Matter of fact, you're really
[08:46:42] talking about it. I mean, I was trying to get long oil um at the beginning of last month in June as it was sliding from 90 and I was like long couple call few days, it was clear it was this was heading lower. So, I got out, you know,
[08:46:56] for a lossish or whatever, whenever it was, it wasn't a whole it wasn't that much of a loss and proceed to watch the the the crude oil futures fall to the 60s, whatever. I decided to get back in just yesterday after two strong days of
[08:47:10] this is why I don't follow the headlines. I just pay attention to the the move and right now the move says to me it could it was at least going to 80 and maybe higher. And so as a result I decided to put on a call spread
[08:47:22] yesterday in CL. I did the 70 in uh the July 24th expiration, just a 10day July 24th expiration, just a 10day cycle, 7880 call spread. And then I also did a uh MCL spread, buying one to sell two upside. Uh buying the 80 to sell two
[08:47:37] two upside. Uh buying the 80 to sell two of the 87. So um we'll see which one of on the second one. That's the one that if we fade, I make, you know, money on that one. Uh the one to the upside, I'll just have to cut my losses at some point
[08:47:49] if we don't get this follow through through the 80 strike. Yeah, I mean I have my my game plan here for crude is uh if we you know it's a pretty clean head and shoulders pattern there. Um if you can get back to the
[08:48:01] bouncing around in May and then you know we'll call it 83 bucks or so. So another $2.50 from here. Short iron condor's got to be a ripe ripe ripe ripe ripe ripe morning. Assuming those are the strikes you're going north of 100, you're going
[08:48:16] south of 67. You're still going to get like a risking three to make two kind of still fairly elevated. So yeah, IVR is low, but if you go over into the trade volatility is still in the mid-40s. That's a lot better than some of the
[08:48:28] single stock names that we're seeing right now. Um, but in any event, the CPI today, right, great news for the market temporarily. We're not going to get a hike in July. Fantastic. But Worsh is speaking later today. Okay, Kevin Worsh,
[08:48:41] the new Fed chair, he's giving two days of semiannual testimony in front of Congress uh today and tomorrow. Starts 10 a.m. Eastern, 9 Central time. This is another one of those catalysts where we have to pay attention to intraday inputs
[08:48:53] for moving the yields, right? And if we saw yields, if we see yields go haywire, then chances are the equity markets are as well. The 10 years, the 30 years, the morning, stocks got some breathing room. Now, as those yields have come back up
[08:49:05] in the past 30 minutes, stocks are falling off a touch. So, that to me is It's as good as it could have been for the markets. Now the conditions are set for wars to remind everyone that they're not in a rush to hike rates, which
[08:49:20] to hike rates in this environment. That means we're going to get more inflation and growth, and that means yields are probably still going up. So that that's Will the two-year yield go up while wars speaks? That's all I need to know.
[08:49:33] >> Couldn't agree more. And uh I will be watching how long it takes for that uh beautiful head of hair to go fully gray on wars because it's only a matter of >> [laughter] >> Yeah, you. It's probably going to happen
[08:49:46] the house. Unless you get it under control soon. >> I do like I do like the [laughter] dragonfly uh the dragonfly strategy. It's It's quite It's quite big brain 200 IQ play.
[08:49:58] environment? We can just hire people for this. We have goons to do these things. >> Dragonflies. >> We will uh see you a little bit later. to check out crude oil. Maybe throw on an iron condor. Uh but yeah, the
[08:50:12] backwardation in here has steepened quite a bit. We had uh a nice kind of a signal for lack of better words yesterday when we looked at MCL. Uh we had 74 74 74 74. It was just a flat 74 backwardation across many expirations
[08:50:28] 70. And now you're seeing that backwardation steepen in the near-term backwardation steepen in the near-term cycle. You've got 80, 79, 78, 76, 75. So this is what we saw at the height of the war. Of course, you'll see a steeper
[08:50:42] backwardation in the near-term cycles relative to uh back month cycles, but I think the for us when we saw it was 74 across the board and then it slowly tapered off, it's it shows us that the market is pricing in higher prices for
[08:50:55] market is pricing in higher prices for longer uh at least for this year. So, continue to trade this thing and it'll give us two-sided action uh for sure. But the crude oil markets, I think if you were to look at uh first of all, the
[08:51:11] last 5 days has been astronomical, up 33%. Uh I would just go to the 34day if you want to stay in this uh 796 contract. This contract is going to fall
[08:51:24] off in two days, so I wouldn't trade the Q. I'd just go to the U. Uh but I just go to the August 17th monthly. And uh the nice thing is you can get pretty far the nice thing is you can get pretty far out of here uh out of the money. And if
[08:51:36] we do like a half point wide 70 cents for 430 at 95 955 and then you go down to I don't know 70 >> 70ish like that. >> It it is a trip to see how much uh
[08:51:51] day. I mean literally 24 hours. >> Yeah. 24 hours ago when you were looking >> Yeah. 24 hours ago when you were looking at the term structure it was um I feel at the term structure it was um I feel like uh 73 in the front and maybe you
[08:52:04] like uh 73 in the front and maybe you know 72 for the next month and then again we saw how it was in the 60s. We were talking about how it was very different from 6 months ago but also still starting to
[08:52:16] it was literally flat the week before when it was in the 60s. So, you're you is that when oil gets to 80, something is materially changing. Um, it's possibly about to make a stronger move higher at some point based on the
[08:52:32] way that the different futures are starting to widen out, if you will. And, um, that's why I just pay attention to that more than the headlines. Look, man, headlines whether I mean uh, you know, yesterday it was like the the US is
[08:52:45] going to take control of the straight. Is that a good thing or not? I really don't know anymore. I mean, I can't tell. I mean that. Seriously. And um you know, there's a new blockade. There's a different agreement. The agreement has
[08:52:57] ceasefire is off. I can't keep track of that, but I can keep track of the the move in crude. And I know if the move gets above 80, I know all of a sudden a strong move higher. It's hanging around here now. Um but of course, you
[08:53:10] out and we might see a release in pressure in in this in the price once again. So, I think you just got to structure your trades um accordingly 5% move in either direction. I think really is the answer here. That's why I
[08:53:27] chose to go with the trades that I did yesterday. I paid $600 in premium to potentially make 1300. If it doesn't work out well, I'm down 300. I'll cut it. I'll cut my losses on that. And if it if oil does pull back, then that
[08:53:39] probably making money and I could potentially close that and move on. >> Love it. Yeah, lots of lots of opportunity when these markets are flipping around like this. U so just got to stay stay active and stay engaged. U
[08:53:54] >> I talk about gold too. I'm I'm really pissed about gold. I I didn't put I was really greedy yesterday. I I was gold was down below 4,000 at least in the these these are real things that traders think about. Yesterday when I looked at
[08:54:09] gold, it was down below 4,000. I started looking at buying um the uh MGC contract, but it was uh the Q contract. And if you look at the options, the Q And if you look at the options, the Q expires within 13 days. Now, I I really
[08:54:22] this trade if I'm going to buy the future. So then I could buy the um I which would have been the uh the V contract, right? But it wasn't below matters is because I wanted to buy the contract and do a similar trade like I
[08:54:37] did last time. Buy the future contract and then sell the call spread further the 13-day options. I didn't want to do that. I wanted to do it further out to get more premium on say a 4200 4220 call spread, which is essentially what I did
[08:54:51] last time. I bought below 4,000 on the future and sold a 4200 4220 call spread. That was a better trade for me. I didn't want to do that with 13 days to go. So, it was just one of those type of things where, well, I was going to be patient.
[08:55:04] Well, it backfired. Now, it's back up [laughter] 100 plus dollars. And hey, it is what it is. What are you gonna do? You gonna do? Yeah. I mean, I have a GLD position that's a little bit longer term, a 380, 390 call diagonal spread.
[08:55:18] It's down a couple hundred bucks right now, but um the 380 is in September and the 390 is in August. So, I'm not too worried about it being so long-term and still pretty close to the price here. GLD is trading for five points higher uh
[08:55:32] six points higher almost more than that uh premarket here. So we'll see. But yeah, I think that's the beauty of these markets. You can trade a number of
[08:55:44] different products whether it's gold futures, micro gold, GLD, GDX, uh and you can really fine-tune your your exposure here. Um what do you think this this market in the E- Minis is going to do today? Do you think we fade from that
[08:55:58] already are. >> We kind of have. I know. It kind of questions for us, uh please put them in the chat. We'll get to them as as soon as we possibly can at some point. Um in any one times at any one of these times
[08:56:10] to answer some of your questions. What do I think about here? I think I think I'm annoyed that I didn't get off my super bear earlier. I I didn't and I needed I should have done that, but um
[08:56:24] want to just completely throw it on without it making sense. That said, um I ahead here when you see a big bump up in the morning like that and all of a sudden we're kind of fading. We'll see. I feel like we're going to fade more
[08:56:38] >> should we put on a super bear? >> I don't want to do it here though. See, [laughter] I We probably should something around 7,500. Where are we actually trading right now? We're trading
[08:56:53] >> Yeah, something like that. >> My theory for the most part, my my my my style has been more like I have a lot of I have things that I think work I my book works very well if we go up to half a percent to a percent. So I don't mind
[08:57:08] that money because it completely gets the the loss of that usually gets eradicated via the other things that I'm making money on. But I I don't know.
[08:57:20] making money on. But I I don't know. >> I'm going to put this on uh 75757580 and then a 74757470 long put spread. So long put spread and a short call spread for 50 cents. So this is a super bare uh because I think
[08:57:34] the rip higher we already we were already uh down before the CPI. Then the CPI comes out we rip higher 35 points and we faded from there immediately and the Dow is down, banks are down. I think it could be an interesting scenario
[08:57:48] where we get a a complete fade, maybe back to red here. Uh but if not, if we points, this will still be a 50cent winner. But uh I'm going to see if we >> You know what I'm going to do? Okay, for that I'm going to do I'm going to do the
[08:58:04] short call spread of my gold trade. I'm going to go out on a a whim here. I'm going to do that short call spread thinking that as a result you're talking going to fade back down below and I'll be able to get long the future where I
[08:58:19] want. Okay, that's the hope. That's the that's the play. I like it. Well, as Jamal said, join us on the YouTube channel. Uh we're streaming live there. questions along that right hand side chat. We'll get to them in the next 10
[08:58:32] take a quick 90 second break. You're watching Tasty Live.
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[09:01:41] right now. But uh yeah, this morning's been wild. We got the CPI at 7:30. The markets ripped up 40 points from being down five to up 35 and we've slowly faded from there. Uh the banks are down. A lot of them are down after reporting
[09:01:55] but sometimes it doesn't really matter. Uh they can crush earnings and the the stock market's still going to rip those things lower. So, uh we'll see how the rest of the market plays out today. But crude oil is another story. Crude oil is
[09:02:09] up uh significantly. the backwardation is right back into those markets. Uh yesterday we were looking at kind of a flat backwardation of four points across multiple expiration cycles or contract cycles and now you've got the near-term
[09:02:23] that's at at 80 and it goes down to 79 78 76 uh all the way down to the the low7s. U but I think the interest rate decision flip is really interesting. Uh I've got the CME Fed watch tool pulled up here and just looking at the the
[09:02:38] compare tab along the left side you can see the July expiration uh or the July decision I should say has been tapering off tapering off tapering off. The way to look at this is the lighter shade is a month ago as you get
[09:02:52] darker one week back one day back and then the current. So clearly the probabilities were sliding into a rate hike of to 37540 and then this morning We're right back to where we started a month ago. Um so it's going to be
[09:03:09] pricing in a rate hike at some point, but it's not going to be in July. >> It would seem that way. Um it's it's and and I think some of it has to do with um just how much the landscape has changed, right? like uh it's um well a lot of the
[09:03:25] reason why that we saw interest rates go higher was because of the war and because of oil and because of how much that's changed and and uh then that going to end up being fine. But all of a sudden now you got this situation
[09:03:39] literally changing right as we speak. And so you're starting to wonder um if Are we going to continue to see these pops in oil that's going to lead to me. that consumers are paying or is this going to be a shortlived thing each time
[09:03:54] and we're gonna have to just kind of ignore it. It's kind of hard to tell. Um so I think that's that's been the the big dance that's been going on here with inflation. >> Yeah. Uh but while we let these things
[09:04:06] play out, we have been pretty active. Uh got into a Super Bowl 10-cent credit 15-point wide call spread right after the CPI hit. Uh that jumped up 500 bucks. closed it immediately and that seemed to be a good decision with us
[09:04:20] down 15 points from where that was. You got into a gold short call spread 4200 4225 out in August and then [clears throat] uh I got into a and then [clears throat] uh I got into a CL iron condor 7069 half 95 95 half uh
[09:04:36] collected 200 bucks risking 300. So kind of a kind of a similar scenario to what sell an iron condor but this is just a straight up implied volatility play. But we I've got plenty more room to the
[09:04:48] upside than the downside here. Nine points and change to the downside. Uh and 15 points to the upside. We're getting a lot of call skew infused into plays out. >> And just got filled on a super bare
[09:05:00] here. 75757580 short call spread to buy a 7475 7470 put spread for a 50-cent credit. So, if we fade from up 19 back to flat, this will be a nice winner. I'll just take it off. So, just to illustrate what I was kind
[09:05:15] of getting at, um, if we got this graphic here, and it's, um, we also got some questions to get to right after this, but again, um, we see inflation, you know, popped up. This is the number this morning, 3 and a half%, but um, a
[09:05:29] lot of this has uh, it's it's it's pulled back, but it's it's because the war was had calmed down in the previous month, and oil was lower. It was $60ome dollars, right? And so you see this turn, but what is this going to look
[09:05:41] like in a month? Especially if we go too high, right, on oil. What is this going to look like next month? Is it going to be back at four? 50-gallon drum with gas. >> I mean, I thought about it. I'm not
[09:05:55] lower. >> I thought about it. I was in Elgen this games were when I was my kid was playing games. It was kind of it was a little bit cheaper. U nevertheless, we do have a couple of questions here. Um,
[09:06:08] somebody's asking about uh Service Now, NOW. What would what do we think about it? I know I got thoughts, but uh you you go first. you go first. Uh I haven't traded this thing really uh
[09:06:21] Uh I haven't traded this thing really uh all too often, but yeah, I think regardless of the product at hand, I think you just got to look at what's going on, what's on deck. We got earnings on deck July 22nd. So, uh, that
[09:06:34] eliminates any neutral strategies for me until earnings because I don't like selling a strangler and iron condor in a product that is going to hold on to extrinsic value until they have an earnings announcement. With that said,
[09:06:47] this earnings implied volatility, if you isolate the 10day for July 22nd, has a 15 point implied move. That's a big implied move relative to $111 stock. It's down 10 points pre-market. So, uh, I would say if you're bullish on Service
[09:07:01] Now, you're getting a 10point discount, 10% discount right now, and you have the ability to construct something here where maybe you buy something in September, August, you sell the 3-day with the intention of rolling it, that
[09:07:15] 10day. Uh, you could sell a put in here. Like, you could do a lot of different things, but yeah, I would just I wouldn't do anything neutral unless earnings, in which case I would wait till July 22nd.
[09:07:28] So for me and and like that's that's the uh the product agnostic thought process fantastic. For me it's a little deeper in that I am in these service names. So
[09:07:41] I have Microsoft, I have CRM, I have Palunteer, I have long Super Bowls in those and then I've also got short calls in SNO Snow and um and Adobe. And so that's kind of my complex I got going on with those those situations. So again,
[09:07:57] service sector. This is down right now because I'm pretty sure partly because rocked. They just pre-announced it's going to be a bad day for the service But that's why I have a couple of short calls in some of those names. So I think
[09:08:11] the service sector and what's going on. Um if you're going to put something I mean I don't know what to tell you. You gota you got to make your own bed here. them that I think are going to survive this bout of selling and um I got a
[09:08:27] couple of shorts on others, but um I think you got to think about it in terms individual name right now because they're all moving together and it's >> Yeah, just looking at Microsoft as one of those those uh MAG seven leaders down
[09:08:41] 10 points pre-market and it's had a pretty good run up from uh 350 all the way up to 390, but we're going to be right back at 380 and uh chopping around there. So, I think this is just another reason to throw on maybe the super bear
[09:08:53] everything is telling us that the e- minis will probably sell off here with the banks and softs uh selling off here. >> But we're going to take a quick break. You're watching Tasty Live. Continue throwing in those questions in the
[09:09:07] Liz just on the other side of this break.
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[09:11:12] show. My name is Mike. I'm here with Jamal and uh we got about 17 minutes until the equity market opens, but we've already had plenty of activity here. We got to bring on Liz Dear King and get her take on the early morning moves.
[09:11:26] >> Good morning, boys. Anything going on? I mean, any reports, any moves in the >> Yeah, >> it's been so fun already today. I need smiles on both your faces, but I would kick you both in the shins for shorting
[09:11:40] >> I did. I short >> both of you shorted gold today. Shame. from? >> Well, [laughter] actually, oh, that's >> Yes. Thank you. >> I I'm actually still long gold. I have a
[09:11:54] call diagonal spread, but I did short the market in general with a super bear. >> I I was watching was watching, Mike. Always watching. >> But I got I got super lucky. I totally forgot the CPI was at 7:30. I was like,
[09:12:07] for >> You DID THAT ON ACCIDENT." CPI hit and then it [laughter] jumped up 40 points. I was like, "Oh, maybe I should take this off." >> It was a fun morning. [laughter]
[09:12:21] smart. >> Speaking of, it's probably a good time to ceue up uh a question that we got from the chat here um about uh placing S&P trades before the open. Why would you place SPX trades now and not during
[09:12:36] trading hours especially if prices usually are wide with and uh that well >> oh yeah then it goes on the other >> what do you what do you give you the floor first list to answer >> you know why because you can because you
[09:12:50] can so I agree prices are wide but in the in the pre-market I let it come to me so I decide what I'm doing I set my price and I typically will need a they are a little bit wide pick your pick your spot and put it in because you
[09:13:04] pick your spot and put it in because you can. It's really fun to trade them non not in the in the pre-market hours just like Mike did right before the CPI. That was not attainable to us two months ago. We couldn't trade the
[09:13:18] right before the CPI and S&P two months ago. You had to use the E- mini S&P futures. And I prefer the S&P because you can kind of let it sit. You can let it settle and you can let it go. That's why I like the S&P. But I do like
[09:13:31] trading them premarket. I have a certain trade that I place every day as soon as >> Yeah. And I think uh just bringing it one one step further, I think if it's you're in an account where you're not you can't trade futures or you're not
[09:13:44] whatnot. Now you can get that pre-market action with S&P uh because it's a totally different trading instrument. So >> yeah. Uh and we're there's always stuff
[09:13:56] that just hit. Sometimes it's a nothing burger, but like that was a 40point rally in 5 seconds. Like it's you can have these things on and express your directional assumption or neutral assumption. Uh right now neutral is
[09:14:10] just an accessibility thing. asking question. >> That's what I was going to say. I mean not. >> But I mean earlier in the morning it is
[09:14:23] right now we're almost we're we're frothing at the open right now. So, but bit wider, but that's okay. These are It's a It's a $7,000 product. Pick your pick your price point. But you can I've noticed sometimes if you get the move
[09:14:38] before the open. >> Yeah. Yeah. Yeah. >> Yeah. I just I'm telling I'm going to push back on why it's not wide to me. I product. This looks like part for the course. This is the same width that we
[09:14:50] see during the regular trading day for S&P. Honestly, I wouldn't consider this wide. I would I the only thing I would say is um is uh again I think you got to
[09:15:02] be careful of where you're trading. Don't just look at the numbers like Liz to pay attention to where at the money is. You got to find that immediately and the thing that I think is tricky that a lot of people probably aren't paying
[09:15:15] attention to quickly. and making sure that you uh trade your your ch make sure your time um that you're putting in the trade your trade session is market hours sorry uh 24 hours because again a lot of times we're so quick to cue stuff up
[09:15:29] I've done this I know you did it too we got to make sure that you put that 24 hours in so you got to do those trade checks real quick before you do the trade but other than that you you guys said it perfectly like it's a it's a
[09:15:41] it's it's to be able to trade something like this is great like on a day like this where we got banks moving. We got CPI coming in. We already got a nice question while we're here. >> AND AND AND JAMAL, I want I want to put
[09:15:55] is very it's it is it's very exciting for somebody like me to be able to trade early. And I do keep an eye on where the traders are picking their points in the really do like to look at that and I can look at that on the SIBO or you can look
[09:16:08] at volume in there. But we you got to remember too these earnings earnings season is on deck and S&P trades until 4 p.m. So keep that in mind, right? So you have the ability to have something come out. I know Apple's after 4, but these
[09:16:23] big flyers that have huge volume in these indices, let's say like uh Nvidia move the market, but you can have options that trade until four o'clock >> Yeah. And I think keep that in mind. >> I think there's a big big big deal.
[09:16:40] Yeah, it's great. And there's there's something to be said about a 20 cent wide bid ass spread in S&P and a 20 cent wide bid ass spread in an equity that's lower price equity. Like SPX, it has so much activity. Like the bid ass spread
[09:16:54] Liz's point, you just got to pick your price and let it go and you'll likely probably because the market moved against you uh or for for you in that sense in terms of getting filled on the price you want. But yeah, the the
[09:17:09] liquidity is not an issue in SPX. It's one of the most liquid assets uh in the world. So, uh just keep that in mind. >> Uh we got another question. Let's cue that up. >> What are the closing differences between
[09:17:21] SPX and ES? What happens if you have a spread that is in the money in S&P at closing? What happens with ES? Why do you force closing of ES? This is pretty simple. So, SPX is cash. ES is futures. They settle to futures.
[09:17:37] So if you have a single in the money option in S&P, it's the cash. Whatever you're down, you look at the print. In ES, if you have a single in the money option that settles to futures, you can be the proud owner or proud short of
[09:17:50] future. So that's why I like S&P because I like a cash settled. My two I said lost their mind. My two favorite words in the English language are cash probably loved it >> because No, [clears throat] Kathy Kathy
[09:18:04] Clay the the CEO was like that was the greatest thing ever and they posted it >> Yeah. Yeah. No, I know. Trust me. No, they are. Are you kidding me? They they >> I spent three years there talking about cash settled stuff. That's the They love
[09:18:18] >> And actually, that's one of the reasons why like I was telling Mike like >> I know I have a lot of long deltas and so I was looking to get off a super bear which I did not this [clears throat] morning. [laughter] not um but uh
[09:18:33] >> I'm sorry. But a lot of times I'll put those trades on I just leave it on. Like I'm not I'm not worried about it because if it's going in my favor, that's great. something else anyway. I've already built that in whatever the loss or the
[09:18:46] settle, I don't it's not like a trade I have to manage that often. You guys manage them a lot more than I do. I I really don't most of the times if I do um because I put them on for a specific reason. Look, a lot of times, I'm just
[09:18:59] that I send off to war, okay? And it's just going to have a it's going to be a war. It's just going to be one of those think about >> I like No, I like the way to look at
[09:19:12] that, Jeral. And like I said, I trade so different and different accounts. But when I'm with my kids or I'm teaching them about SPX, the cash settledness makes it a lot easier to let it just go. Let it go. Like you said, this is you
[09:19:25] keep lather, rinse, repeat. You keep doing it and eventually you will eventually the numbers work out. So that that's not a bad mentality with it. That like that with them than I do in my own account because this the bigger the
[09:19:39] >> I know. I love that. I love that you do that. I'm the same way with it. Like I I it's like you put on different hats as soon as you pull that account down and what's going on here? How am I thinking? What am I looking at?
[09:19:53] other day. I was like, "When when do I close it? What do I do?" I'm like, "Listen, Glenn, Microsoft's at 350. Just go ahead and, you know, buy some leap options and then change your password, but send it to
[09:20:06] >> Yeah. [laughter] >> He can has full access to your account. stop yourself out. You can't Your hands are tied. Then you just let it go. attack, man. Or Microsoft and Palunteer position. This guy This guy, was that
[09:20:20] It might have been him sending service now. He's looking at he's super [laughter] >> Well, what about is he okay? Was he in No, >> he's okay. Okay, good.
[09:20:33] >> I think I don't think he was in IBM because Mike and I have never talked >> Yeah. >> Oh, so you guys take him down. Okay, I >> We just talk about these things and he sees it and he sees the opportunity. We
[09:20:45] don't It's It look, it's just like we talk to people all the time in the chat. We don't tell you to follow us. We just tell you to make your own decisions, but that we put on are talking about makes sense. We can't help that.
[09:20:58] >> Yeah. Yeah. >> Real quick, just to really make it super micro e- minis, they're all cash settled, but there is no underlying day, the two-day, whatever expiration you're looking at, will be a cash
[09:21:13] settled financial transaction at at the expiration of your contract. But the e- minis and the micro e- minis, there are contracts that settle to this. So yes, even though the option itself like a zero day, one day, two day, 3-day, these
[09:21:28] will if it's in the money, it will turn into the E- mini U6 contract, but then >> Yes. >> So that's the the differentiation there is everything's cash settled eventually, but S&P is immediately cash settled. the
[09:21:43] micro e- minis and the e- mini futures will settle to the contract itself and >> Yes. >> Which means you have to watch your cash that means and you want to be long or short that if you are long or short that
[09:21:57] >> Yes. >> Than if you were if you had a defined middle. >> Yeah. Yeah. And this is the main reason because of that cash settlement right away. Like it doesn't settle to
[09:22:10] anything. So, it's it is what it is. >> Yep. >> Settles to cash. >> Yep. There. I mean, it there I I really do like the cash settled. Uh and you know what's crazy, too? I know I'm going
[09:22:22] Wait, do you have somebody from the um trade desk coming on later? >> Yes. >> Yes. Right. Okay. So, um we've I've gone had a tanker of natural gas delivered to my house. So, I'm pretty safe to say cuz
[09:22:37] I trade natural gas options so much and I've never taken delivery, so I'm safe here. Um, those also those options, that's why I leave those till the bitter end because those also settle to cash. The natural gas options, you never take
[09:22:49] that's another great point. If you're trading zero day stuff, uh, and let's your spread's about to be in the money and out of the money, in the money, out of the money. The beautiful thing of S&P is that it aligns with the brokerage
[09:23:05] firm's risk profile, too. Like if you have a ton of contracts on and you're at you're at whatever broker, if you have a ton of contracts on in like Tesla and you've got a hundred contracts on for two pennies, if that option starts to
[09:23:19] and the brokerage the brokerage [snorts] risk team recognizes that you don't have the capital to hold the shares, whether they're long or short, you can get stopped out before 3:00. Where S&P because it's in it's immediately cash
[09:23:31] settled. That's another reason why those trades can be more beneficial because expiration. It can it can expire in between your short and your long option to where in any other product you would have acquired shares. In S&P it's still
[09:23:47] nothing to worry about in terms of settlement risk, expiration risk with XPX in terms of acquiring something else after the fact. >> And Mike, that is why you are you need your whiteboard. You are very calm when
[09:24:01] articulating it. >> Like I said, I just thought it is what the cash or you don't. But Mike, you very very well said. Very well said. very very well said. Very well said. >> Thank you. Uh we got about five four
[09:24:15] minutes exactly until the market opens the equity market. Uh E minis are trying to rebound from the recent selloff. If we look at a one minute chart and here's your 7:30 smash and we've tapered off ever since then. Uh, but we've been
[09:24:29] wide range ever since. Where do you think we go from here? >> Um, what is what? Let me see your Can I see [clears throat] >> Oh, by the way, I talked to the the
[09:24:43] product team. I'm We might have a little something going on there to add this >> We'll see. >> No, you if you you have to say it you say it on air three times, it happens. That's how that's how things get done.
[09:24:55] >> Yeah. I mean, we're still in a pretty steep contango here. Uh, the opposite of what's happening in the the crude oil markets, but yeah, VIX futures still in markets, but yeah, VIX futures still in contango and the VIX is at 16. So,
[09:25:08] volatility information, my prediction for today is we are going to I mean, I'm I'm giving it in spo. We're going to close up 47. We're going to go up 20 >> I hope you're right. That would be great.
[09:25:21] >> That's definitely fair. I mean, look, we've been dancing around 7,600. We did it all day yesterday until we fell. Um, I think it's it's it's definitely I not going to it's not going to give me the opportunity to get on the super bear
[09:25:34] the realm. >> I think what just happened. I mean, I we got a little above 67600. Things got a little exciting and then you're like, here. And then they [laughter] >> Yeah. Yeah. But markets move. I mean,
[09:25:49] the place with you guys today, but it's kind of like look at all the banks. They all all the banks outperformed all of them. Every single one you get the news, it's like we killed it. We killed it. We killed it. Everything's down.
[09:26:02] >> It's insane. It's the market is irrational. It does it does what it >> Yeah. And that's why I think I think we'll have an inside day regardless of because it seems like we're getting a little conflicting info with the e-
[09:26:16] minis and NASDAQ up, the banks down after posting good numbers, the software stocks down uh service now, Microsoft, like there's there's things that are pulling and pushing in opposite directions and I think that eventually
[09:26:29] >> That's a great point. This is definitely going to be a day to watch the heat map to see what kind of rotation happens. And before I hand to Liz, I just got to make fun of you real quick. You're all over the place today. I had in my mind
[09:26:43] like this. Good night moon. Good night sun. Good night. You definitely did. >> Your mom. I do. To my defense and I feel like I have to say this to the chat. I was born this way. Fast and loud and use my hands. And everyone my entire life
[09:26:58] >> And once I walked on that trading floor, I was like, I have met my match. There wasn't anybody I couldn't beat in the speed department. And it stayed with me. it. >> Yeah, that's why 14 years, 15 years down
[09:27:13] there, I was taller than them, faster than them, and louder than them. So, it >> So, yeah, we got a bunch of things here. We got the IBM making a move so far um software, and that's going to be great. We got um I mean, already it's it's
[09:27:30] another one of those days. SMH is up 4%. We got software down 3%. So if you just look at your SMH and versus IGV, that's the push and pull we got going on already. That's been the same push and pull we've seen every single day though.
[09:27:44] different. When semis are up, the software is down, vice versa. Uh the only question is whether or not uh the consumer staples, the Walmarts of the world will be down. My guess is they are it'll be fascinating to see if that
[09:27:57] reverses at some point today. But this is going to be the thing. I'm going to say it right now. This is going to be the thing that eventually when we have a >> Watch out. >> Yeah. Um before the market, before the
[09:28:11] bell rings, what do we what do we collectively the three of