What Regular Investors Need to Know About Options Flows | Brent Kochuba

[00:00:00] Welcome to the OPEX Effect, a joint podcast from Excess Returns in Spot Gamma, where we take a deep dive into the world of options and the flows to generate in the markets.

[00:00:06] Join Brent Kochuba, Jack Forehand, every month on options, expiration week as they look at the major developments in the options world and how they impact all of our portfolios.

[00:00:14] The only information on this podcast should be construed as investment advice to carry these to step to the podcast to maybe hold things of clients of a big account.

[00:00:20] So Brent, we're going to change things up a little bit this week because we've been doing this a lot of it's shocking, but we've been doing this for a year now, I believe you've ever close to it.

[00:00:26] It's a lot of it. It's our 12th episode.

[00:00:28] Alright.

[00:00:29] So, all of those are the top 10 video views.

[00:00:33] They are the most popular things of all time on an Excess Returns already 12.

[00:00:37] But what is interesting is that I was just going through the day like one of the things I like to rank our episodes by as I looked

[00:00:43] to like look at like the average watch time because that kind of tells us what people are engaging with.

[00:00:48] And I think we are now three of the top 10 and we've had 375 episodes and number one overall is an OPEX Effect as well.

[00:00:55] Alright.

[00:00:56] So keep our listening to this, are like listening through to a lot of it relative to our other stuff.

[00:01:01] I appreciate you trolling for whatever metric puts me at number one to make that go wrong.

[00:01:06] I'm just starting until I found the right one but I think that is one of the most important ones because that shows people are actually engaging with the stuff that I was looking at.

[00:01:13] And that was our number one quick through for it though.

[00:01:16] But anyway, we're going to change things up a little bit because one of the things that's been great for me about doing this is

[00:01:21] I've learned a lot about what's going on behind the scenes and we're going to see some stuff this week so often you'll see you know the market will move and everybody will say you know see NBC will say here's why it moved you know the Fed did this or this anticipation the Fed is going to do this.

[00:01:33] And a lot of times that is not going to do it.

[00:01:35] A lot of times there's something going on behind the scenes with respect to flows that's driving the market and it is a long term investor like I found like a lot of solace in knowing that at least.

[00:01:44] You know when I see these crazy moves of our integer day reverse rules and all kinds of stuff happening that I used to have no idea what's going on and I still can't say exactly what it is.

[00:01:53] But I feel better about it now because I know what's going on and so that's only what I want to do today is we were going to go through options dealer flows we're going to do an options dealer flows one on one at the beginning.

[00:02:03] And we're going to talk about how all this stuff works and why it's important for investors to understand it.

[00:02:07] Yeah, I'm going to keep it.

[00:02:09] We'll keep it light here so this is not a super intense course so those of you already know this stuff you won't have to sit through ton of it but the idea here is just to explain.

[00:02:18] I like to say the transmission mechanism between options hedging or options trades and hedging flows in the underlying stocks that we all watch and to your point you know when you look back at a date like August 5.

[00:02:31] And the options market conditions into August 5 you know they were they were breaking way before Jim Cramer and everyone else was you know freaking out on on on August 5 itself so you see that the table set a lot of times we actually see it in a similar fashion from our all just a quick quick one that.

[00:02:48] We break this 5600 level in the S&P and there's negative game on right which everyone started this term but that means dealer's got a sell and all should jump and things to get a little squirrel in or there so you know these dynamics are still at play.

[00:03:01] Even as they become a little bit more understood across the equity landscape or investing landscape I should say to kind of your point.

[00:03:10] Someone like yourself who is in an options guy no pays attention.

[00:03:13] And just for a regular viewer we are going to get into this expiration which I believe is one of the biggest of all time if I'm correct is that right.

[00:03:21] Yeah, you know it's funny because if you look at sorry I'm flipping through the pot on the presentation to earlier but if you look at the way so goleman somehow got the jump on detailing up with these expiration's are so they'll say it's five trillion dollars and what they're doing is essentially taking the amount of open interest and translating that into stock equivalent.

[00:03:38] Assuming that no one open interest is equal to 100 shares a stock or one contract that that's not the best way to measure it but based on that metric we are at a very very large expiration were bigger than March quarterly expiration but little bit smaller than June so this is a this is a large expiration a matter how how large you measure it.

[00:03:56] But you know the Goldman quotes of the in the financial media will say five trillion but.

[00:04:01] We think that the delta size which is a little more accurate way to measure it is is in the hundreds of millions not quite a trillion.

[00:04:09] And so to step into why is important you've got a great slide in here about the increase use of options activity.

[00:04:14] I'm going to show myself first.

[00:04:16] Oh yeah, that's important too that's going to look like a star there in front of the next thing.

[00:04:22] Yeah, I'm honored to be working with a media star on my mom said I look very handsome when that photos let's one then we stick.

[00:04:29] Anyway, sorry to be.

[00:04:31] But anyway you've got a you've got a slide here about like I think the pandemic was kind of a big turning point with this right like the use of options is going up a lot.

[00:04:39] Yeah, 100% 2020 we had the pandemic so everyone got their stimies and then you got electronic trading.

[00:04:45] And then you're going to be working on your own and that really electrified excuse the pun volumes and that turned into.

[00:04:55] So we went from like me mania and GameStop craze to zero DTE's and zero DTE's are now 50% of volumes roughly not only in the SPS and B5 100 but also in the biggest single stocks or we talking a lot about Nvidia today.

[00:05:12] Which you know even if you don't trade options, you're going to want to see some of this in video content it's really pretty interesting so volumes are increasing which means bigger hedges and more active hedges.

[00:05:22] Uh, are taking place there's more hedging activity and that's really why we're so focused on this not just for the opposite trading community but but they get it for all for all traders.

[00:05:32] You mentioned zero DTE so they've also because there's more options activity there's also more expressions now is that right.

[00:05:38] Yeah, every day in the S&P 500 the NASDAQ complexes so spiders, Qs, etc.

[00:05:44] There's an expiration every day also an IWL and there are there's a expiration every Friday for most US single stocks.

[00:05:52] There's a scuddle but that there's going to be daily listed options for single stocks as well.

[00:05:58] Matt Levine had a hilarious Bloomberg comment column about this recently where you know you're talking about zero DTE's and how retail traders really want this and how.

[00:06:08] You know the market makers of the world couldn't be more happy to you know roll out the red carpet for these guys I think one guy was like a volleyball coach slash zero DTE trader so that was kind of.

[00:06:18] Those kind of is angle on how the market makers of the world are welcoming the volleyball coach slash zero DTE traders with open arms.

[00:06:27] But it's at any rate those volumes are likely to continue those short dated volumes are likely to continue to increase.

[00:06:34] So one of the things that I think stock people will probably not totally understand about this is when I when I buy a stock sometimes I'm getting matched with like a seller on the other side who wants to sell a stock.

[00:06:43] With options is not the way it works right if I'm buying an option I'll rents now on the other side like selling me that option I'm dealing with a market maker in the middle.

[00:06:51] Like an option is dealer right 100% so the the latest data saw which is admittedly about a year old but there's no reason to think this changed is that 90% of options volume is traded against a market maker and if you think about how many explorations are hard how many strikes there are.

[00:07:08] You know it would be very random for another you know retail trader or institutional trader even to be on the other side of your or you can look and find those people there's some markers in the in prices that I think allow you to reveal that a little bit but.

[00:07:20] Odds are 90% of the time you're going to interact with the market makers to jack when you go buy you're probably getting.

[00:07:26] The contract sold you by Citadel or Wolverine or you know there's really a couple of really big market makers out there and so that is a real that is a to your point that that's a difference in the options market versus equities.

[00:07:39] And so when I'm you're lowing my my games. Call options here yeah.

[00:07:43] That that market maker on the other side doesn't necessarily they now have a risk right and they don't want to have that risk that's right to take action right to do something about that risk that that's exactly right so in the example that we have here is look if if.

[00:07:56] If it's just me buying 10 AMC calls the market maker that's a small order they go whatever and they don't even probably bother hedging that but if we all get together on on Wall Street bets if I think that's still around.

[00:08:08] And we all buy at the same time right ten lots well that can add up very quickly and so the example here shows a bunch of small orders coming in from interactive brokers retreat or whatever and the market maker sitting there saying oh I just sold a hundred thousand calls because of some you know fin to it.

[00:08:24] Put out some message.

[00:08:27] So you have a hundred thousand calls that you sold as a market maker you're sitting there saying I don't want to be short this stock.

[00:08:33] I don't know why I'm short this stock I you know I don't know what the catalyst is and so what do I do and for that you turn to what's called delta hedging and what delta hedging is is it.

[00:08:44] You plug your contracts into or you're you plug the parameters of an option contract into a calculator like black holes and it basically spits out this number is a very simplified example.

[00:08:57] But you say okay all these fellows came out they bought these calls from me for AMC my options calculator tells me these are 50 delta options so what does that mean that means I need to buy 50 shares of stock for every contract I sold the hedge money so.

[00:09:11] So in our example here if there's a hundred thousand calls that you sold as a market maker you can have to buy five million shares of stock.

[00:09:18] To hedge that position right but the critical thing is that hedges you right now at this very time at this very price if the price of the stock changes you got to change your hedge if time passes you got to change your hedge if.

[00:09:33] The volatility comes down right or implied volatility goes up you know the anticipation about you know what's going to happen the future changes for example.

[00:09:42] The amount of shares that you need to own.

[00:09:46] Changes as well so you think about for example when roaring kitty came out recently had a webinar that he did.

[00:09:53] And yeah options implied volatility was that I don't remember the exact number so you know stick with your but.

[00:10:00] You know options implied vault into him in his webinar was like 400% for like an at the money one month option let's say and then as soon as he came on it was just like.

[00:10:08] What's up everybody like there's no master scheme here I just want to say what's up implied vault just like tank and suddenly if you had own say by a million shares to hedge yourself.

[00:10:18] You only needed like two million shares to hedge yourself because all some people go oh this is this means nothing right and volatility came way down so again you're justing your shares based on underlying price movement time passing and changes to volatility.

[00:10:31] And what that means for us on the other side is where these flows are impacting the underlying thing beyond that they're impacting the market.

[00:10:37] Yeah so the most basic way that we look at this through delta and gamma so delta is the initial head you have to put on to get what's called delta neutral which means that at this price.

[00:10:46] Right now if the stock goes up a dollar I'm hedged because I have these underlying shares but what happens is if the stock goes up two dollars then suddenly I may need to buy more shares of stock as an example or sell more shares of stock.

[00:10:58] So what this matrix here shows you is very the most basic implementation of this is if for example a trader buys a call the dealer or the market maker has this short call right they sold to call to you.

[00:11:10] The way that they hedge or they would buy stock and the way that it had to continue hedging is by chasing the stock so in this example if I'm short a call as a market maker and the stock is going up.

[00:11:20] I got to keep buying shares of stock to maintain my hedge right this is the gamma reposition that would have to take place so what that essentially means is the more the stock goes up.

[00:11:30] The more stock I have to buy and you can imagine that if I am buying millions of shares of sums of stock particularly some illiquid stock i'm going to be the market there i'm really moving things right.

[00:11:40] So these break into you know the way that we get him hedge breaks into the idea of positive and negative game hedging but through this matrix here hopefully explains exactly why options volume translates into trading in the underlying position.

[00:11:58] And then we also hear these terms vana and charm you'll hear those a lot on on Twitter.

[00:12:02] Yeah, excellent question here so delta we explained it's the obvious you know the number shares we have to own changes as the stock goes up and down.

[00:12:13] But I also mentioned time and volatility is the other parameters the idea of charm or theta decay there linked ideas is that as time passes the delta of the option that I own changes and so if the stock does not move at all.

[00:12:28] But time is passing then it makes me adjust my hedge ratio and so what you can see here is some very you know crude examples of this on the bottom in terms of time.

[00:12:39] But basically what you see happening is that as time moves out of the money options the delta starts to decrease right because the odds of that option being in the money essentially changes.

[00:12:51] So out of the money options will lose some delta in the money options will gain some delta that's a complicated way of saying that look if nothing happens even if it's not a volatile stock.

[00:12:59] There's delta are shares that have to trade as a result of time passing and the closer you get to expiration the more trades or more shares could have to change hands as a result of time passing so if you think about a zero d t e zero d t is like the microcosm of a you know a one year option expiring there's lowly delta's change over the course of a year well zero d t options are.

[00:13:20] You know like on steroids where the delta's can change very very rapidly over the course of hours and minutes into expiration so again the point here is that time makes.

[00:13:30] Created delta flows or hedging flow and then the second one is the delta verse implied volatility in this chart would just show you an example of all we did is all you do is adjust implied volatility which is a key parameter into pricing option.

[00:13:42] If you just adjust that implied volatility it changes hedge ratios so think about tomorrow with the FOMC.

[00:13:50] There's a vault implied volatility premium because traders are waiting for FOMC to come out if pal just literally didn't show up and just said hey you know the rate cut is 25 bips and then the meeting ended.

[00:14:01] Vault would come down because of that right because the event passed and that would create delta hedging flows that would have to shift as a result of that volatility coming down.

[00:14:10] So those three parameters price implied volatility are really critical to understand these hedging flows and you know create this kind of wall interim woven dynamic of of how these those flows shift.

[00:14:22] And obviously, it's part of how we're doing

[00:14:24] or trying to model these flows and estimate

[00:14:27] when and how they're impactful to the underlying stocks.

[00:14:30] And they change in somewhat predictable ways, right?

[00:14:32] Like I know the week before expiration,

[00:14:34] Jim Krasano is has that out of the politically correct way

[00:14:36] to put this, but he has the video

[00:14:38] of the larger person trying to fit through the inner tube

[00:14:40] and always getting through.

[00:14:41] Like it's like, but the market always threads

[00:14:43] the needle the week before,

[00:14:44] but then as we get into the week of,

[00:14:46] you run into like the window of weakness people call it.

[00:14:49] So the activity around this, right?

[00:14:52] Is higher risk or lower risk?

[00:14:54] 100% you know,

[00:14:56] VIX expiration tomorrow morning obviously.

[00:14:58] So there were some big VIX trades

[00:14:59] that went up yesterday and it was well today

[00:15:01] and you can see that the actual

[00:15:03] the VIX trades move the market themselves

[00:15:06] as they're being added and removed

[00:15:08] and then that time decay really picks up

[00:15:11] particularly into options expiration week.

[00:15:14] And you know, there used to be these dynamics

[00:15:16] that you could kind of set your watch to

[00:15:17] and they shifted now due to zero DTEs

[00:15:19] but I also think that the market makers

[00:15:22] and all our participants have adjusted some of the ways

[00:15:24] that they trade because the, you know,

[00:15:26] Mark's smarter market players started to catch on

[00:15:28] to some of these flows like, you know,

[00:15:30] the window of weakness for example,

[00:15:32] or different ways that prices are just.

[00:15:33] So, you know, there's a game being played here

[00:15:35] and the dynamics are constantly shifting

[00:15:39] but from a high level, your point of

[00:15:41] opposite expiration, mattering it's because

[00:15:43] big positions are changing.

[00:15:45] Time decay is a much bigger factor in those moments

[00:15:49] and both those link back into volatility

[00:15:53] because statistically speaking,

[00:15:54] there are certain hedging flows

[00:15:55] with suppressed volatility or expand volatility

[00:15:57] and so, you know, again, all these concepts

[00:15:59] are linked together.

[00:16:01] Yeah, that was great.

[00:16:02] And I think the biggest takeaway from me

[00:16:03] from this is like a lot of times

[00:16:04] what I said at the beginning, which is a lot of times

[00:16:06] you'll see these things in the market

[00:16:08] like we're gonna see all kinds of movement

[00:16:09] around the FOMC meeting

[00:16:10] but a lot of that movement may not be, you know,

[00:16:13] they may say on C and Vc it's because

[00:16:15] the market's predicting this

[00:16:17] for the market's predicting that

[00:16:18] but a lot of times that this positioning

[00:16:19] is what's driving these things

[00:16:20] and so I think as a long-term investor,

[00:16:22] it's good to just take a step back

[00:16:24] and say, you know, maybe whatever the economic reason

[00:16:26] for this people are talking about

[00:16:27] is not really the reason.

[00:16:29] Maybe these flows are actually driving

[00:16:31] what I'm seeing in front of me.

[00:16:32] Yeah, that's exactly right.

[00:16:34] And in the last few slides here,

[00:16:35] we'll certainly not to be an immersive course in this stuff

[00:16:38] but just to relay that exact idea, like,

[00:16:41] okay, give me examples of exactly

[00:16:42] how these hedging flows move markets

[00:16:44] and there's a lot of resources

[00:16:46] that you can dig in more on this

[00:16:47] but that is the key takeaway.

[00:16:49] There are times when the options market

[00:16:51] is calling the shots, I think that is really exemplified

[00:16:54] on the day of today's exploration,

[00:16:56] occurring tomorrow morning

[00:16:57] or these quadwitching or triple-witching options

[00:17:00] operations like we have Friday

[00:17:02] or if you look at an event like August 5th

[00:17:05] where you can see these pressures build up right

[00:17:07] and the options market's screaming at you,

[00:17:10] you know, this is about to happen

[00:17:11] and these big flows are dominating what's occurring

[00:17:14] and I think that is invaluable information

[00:17:16] for even long-term investors, right?

[00:17:19] Because, you know, is this a time

[00:17:20] where you wanna allocate some money

[00:17:21] or do you need to be defensive here, for example?

[00:17:24] A lot of what we talk about is on shorter timeframes

[00:17:26] but when you zoom out there are a couple times a year

[00:17:29] there are these moments where even longer term investors

[00:17:32] will probably wanna sit up

[00:17:33] and see the signal that the options market is sending.

[00:17:37] So as we move into our regular presentation

[00:17:38] that we've gone through some of this

[00:17:39] but this is the idea of the ethics cycle

[00:17:41] kind of in the correct angle here.

[00:17:43] Yeah, so options are about to expire

[00:17:45] as they're here on Friday

[00:17:46] as we just kind of outlead here.

[00:17:48] And the idea that the monthly options

[00:17:50] explorations, the third Friday of every month

[00:17:52] and positions generally speaking

[00:17:54] build up into that option's expiration,

[00:17:56] those options flows get larger

[00:17:57] and more impactful as we get towards options expiration

[00:18:00] and then the whole system kind of resets

[00:18:02] generally speaking on the third Friday

[00:18:04] of the month obviously that is September 20th here

[00:18:07] and this has marked some significant turning points

[00:18:09] in markets.

[00:18:10] I highlighted the most famous of them

[00:18:12] generally on quarterly expiration's,

[00:18:14] we find these big bottoming cycles.

[00:18:16] Not every option's expiration matters

[00:18:18] but certain once really do, December 2018,

[00:18:22] March 2020, June of 2022,

[00:18:26] you can go through these dates and each red X here

[00:18:28] is an option's expiration

[00:18:29] and so, particularly if you see an extreme move

[00:18:32] into an expiration, you can generally count on that

[00:18:36] being a turning point.

[00:18:39] And so, those are the types of things

[00:18:41] that we look for big imbalances in market prices

[00:18:44] and implied volatility into these explorations

[00:18:46] as a signal of a turning point.

[00:18:49] So the general rule is the bigger

[00:18:50] or the move into the expiration

[00:18:51] and the bigger the expiration itself,

[00:18:53] those two things increase the chance

[00:18:55] we get in turning point.

[00:18:56] Yeah, that's exactly right.

[00:18:58] And so, you know, think about March 2020

[00:19:00] is the most extreme example

[00:19:01] and there was these massive put positions on, right?

[00:19:04] I mean, huge.

[00:19:06] And so, all of sudden,

[00:19:07] on options expiration day,

[00:19:08] the third Friday of March,

[00:19:10] all of those puts expire

[00:19:11] and then any related hedging flows

[00:19:13] suddenly aren't needed anymore, right?

[00:19:15] And then what happens on Monday,

[00:19:16] we put it in a low in the market just rips

[00:19:17] because there's not that downside hedging

[00:19:20] that cycle is broken, right?

[00:19:22] The cycle is,

[00:19:25] dealers and market makers need to sell shares of stock

[00:19:27] and they're so big that they're pushing the market down

[00:19:29] but as the market goes down,

[00:19:31] they need to sell more.

[00:19:32] So we call that reflexivity

[00:19:33] because by me being the whale

[00:19:35] and I'm selling big shares of stock,

[00:19:37] I'm pushing the market down

[00:19:39] which means I need to sell even more shares of stock, right?

[00:19:41] And that becomes the cycle

[00:19:42] that can't get snapped until the positions expire, right?

[00:19:46] Options expire and then suddenly,

[00:19:47] I don't need all these hedging flows anymore.

[00:19:49] They, for anybody who's skipping this,

[00:19:51] the two dozen 20 things

[00:19:52] is what I always like to turn to

[00:19:53] because basically the exact market top

[00:19:55] was an options expiration

[00:19:57] and the exact market bottom

[00:19:58] was also an options expiration.

[00:20:00] So, you clearly, there's something going on there.

[00:20:03] Yeah, and you can look at July,

[00:20:04] I mean, July 17th was a fixed expiration

[00:20:07] and that was this past July

[00:20:08] and that marked the top to the morning, right?

[00:20:10] Because suddenly you get this destabilization

[00:20:12] in the market when these fixed positions expire.

[00:20:16] So there are these moments in time

[00:20:17] and yes, you look at this and say,

[00:20:19] well, there's a lot of these red Xs that don't matter

[00:20:20] and yet not every option is expiration matters.

[00:20:23] For single stocks, individual stocks could,

[00:20:26] et cetera, but there are these turning points

[00:20:27] again that really do matter as a two to your point.

[00:20:31] So on the next slide,

[00:20:32] we're getting into the current expiration.

[00:20:34] Yeah, I made a little mistake here

[00:20:37] on this chart, this should be 5,500, excuse me,

[00:20:40] 5,657 or so.

[00:20:43] We'll apologize for that.

[00:20:44] But the key here is that under 5,600,

[00:20:48] we enter this negative game of position in the market

[00:20:51] and that means that the window of weakness,

[00:20:55] if you want to call it that, oh, the window weakness

[00:20:58] and the price area of weakness really picks up at 5,600.

[00:21:02] So we're just above that level today

[00:21:04] it's Tuesday, September 17th.

[00:21:06] So if we break below that level,

[00:21:08] there are a lot of dynamics that we've discussed

[00:21:10] earlier this year that come back into play.

[00:21:12] So we talk about correlation

[00:21:13] in terms of correlation coming back down after

[00:21:17] and video and all these stocks have been rally.

[00:21:20] That could really break up.

[00:21:21] We're gonna talk about 60, 40 portfolio allocation here

[00:21:24] in a little bit.

[00:21:25] But there's a lot of themes that come into play

[00:21:26] if we break 5600 and dealers have to start selling shares

[00:21:30] of stock and volatility, IE the VIX really likely

[00:21:33] starts to spike in our view.

[00:21:34] If we can't hold 5600.

[00:21:37] And so we were talking before this started about

[00:21:39] what is the outcome of the FOMC

[00:21:41] and we're gonna dig in this a little bit more later?

[00:21:43] It's 50, 50, roughly right now

[00:21:45] whether we get a 50 bit cut or 25 bit rate cut

[00:21:48] and I don't know what outcome matters for bulls or pairs here

[00:21:51] and you were saying the same thing.

[00:21:52] But I could tell if we break 5600,

[00:21:54] I personally am gonna be looking for a pretty sharp quick drop

[00:21:58] in the market.

[00:22:00] So the idea is, if we think about this kind

[00:22:01] of in the same way technicians think about support

[00:22:03] and resistance is that right?

[00:22:04] Like these are areas you've got to break through.

[00:22:06] So the odds are, you might stop there

[00:22:08] but if you don't stop, there's more room

[00:22:10] to move in both directions.

[00:22:12] Yeah, that's exactly right.

[00:22:13] And so we're constantly monitoring the impact

[00:22:16] of volatility and time and all those factors

[00:22:19] and what we found is basically when we just say,

[00:22:22] look, this is the level you wanna watch

[00:22:24] it sounds like a technical level

[00:22:26] but it's really us looking at positioning

[00:22:28] to understand what happens

[00:22:29] if then kind of statements.

[00:22:32] 5600 has all these positions.

[00:22:33] If we break that level, we think dealers need to start shorting.

[00:22:36] So it's not a moving average thing

[00:22:38] or a fibonacci or traceminer or something like that.

[00:22:40] It's simply saying at this level, flows are locked

[00:22:44] which should lead to markets being sold

[00:22:46] or equities being sold.

[00:22:49] So on this next slide, we're looking at the current topics

[00:22:50] and this is interesting for me

[00:22:51] because if we look at our criteria from before,

[00:22:54] we do have the huge topics part of it.

[00:22:56] Now we haven't really had, I mean,

[00:22:57] the market is definitely at highs

[00:22:58] but we haven't had some massive run into the expiration.

[00:23:01] It's kind of this bloat and around a little bit

[00:23:03] and then it's call-heady

[00:23:04] so you do think maybe some of the components

[00:23:06] of a reversal are here.

[00:23:08] Yeah, we could go, we didn't have this much of a call-in balance.

[00:23:14] Obviously, the move off of September 11th generated

[00:23:17] a lot of call values relative to the puts.

[00:23:19] I've also seen over the last couple of days

[00:23:21] and I imagine we update this slide tonight,

[00:23:23] this imbalance is gonna be,

[00:23:25] well, decreased a lot

[00:23:27] because I think a lot of people are closing up calls early

[00:23:29] in front of FOMC, which is tomorrow.

[00:23:31] The idea being that there's a lot of short-dated flows,

[00:23:34] I've made my money on the 10% Nvidia Rally over last week.

[00:23:38] Let me close up that position, right?

[00:23:40] So we are planted towards the call side of the equation.

[00:23:43] It is a little toppy.

[00:23:45] It's not a screaming top like you mentioned before

[00:23:47] but there's a really soft underbilly of this market

[00:23:51] and my TLDR on the September positioning is

[00:23:55] I would look for to be a period for consolidation.

[00:24:00] Following this, obviously the grill in the room

[00:24:02] is FOMC tomorrow and that's really gonna dictate

[00:24:05] a lot of what happens, I think.

[00:24:07] On this next slide, you really are able to look at what's going on

[00:24:10] and you're able to predict the kind of volatility we're in having

[00:24:13] and we're not seeing, for the most part,

[00:24:16] we've been doing these, we've been seeing things to the right

[00:24:18] which we're seeing now.

[00:24:18] We saw a couple times we got to the left

[00:24:20] but we're not seeing high levels of predicted volatility right now.

[00:24:23] Yeah, that's right.

[00:24:24] So this chart shows our gamut index

[00:24:25] which we just look at how much S&P 500 gamut there is

[00:24:28] and we compare that to forward volatility,

[00:24:31] forward one day of volatility with the Y-axis is.

[00:24:33] So at five in the morning our model spits out

[00:24:35] here's what dealer gamut is and the S&P 500

[00:24:37] and we can forecast with some accuracy

[00:24:41] what the volatility should be for the upcoming session

[00:24:43] and the deal is that when we have negative gamut,

[00:24:47] we have higher levels of forward volatility.

[00:24:49] So right now we're whaffling around zero gamut

[00:24:53] where below 5600 we could there's negative gamut position

[00:24:56] which is statistically to spikes in volatility.

[00:25:01] So on the next slide, this is kind of what we talked about

[00:25:03] which is this idea that more often than not

[00:25:06] you do get performance flips at topics.

[00:25:08] Yes and what's interesting is that there is a 68%

[00:25:13] of 68% of time the market reverses

[00:25:15] from whatever the prevailing price action was into topics

[00:25:18] to out.

[00:25:18] So the market flips around options expiration.

[00:25:21] 68% of time when the VIX expiration is after options

[00:25:24] expiration.

[00:25:25] So that is not happening this time.

[00:25:27] If VIX expiration is before optics then the performance

[00:25:30] flip is 58% so it's a little bit more of a coin toss

[00:25:33] and what's interesting about that is that the VIX

[00:25:36] option's expiration becomes a kind of destabilizing force.

[00:25:41] And so this is why I think it matters

[00:25:43] whether VIX expiration occurs before or after.

[00:25:46] In this case here we're losing a lot of VIX put positions today

[00:25:51] into tomorrow's VIX expiration

[00:25:52] and I think that those flows have been pushing volatility

[00:25:55] either VIX down.

[00:25:57] And so you sort of wipe the slate clean a little bit

[00:26:01] and so with the Fed isn't appeasing to markets

[00:26:05] that to me tells me that we could get a little bit more

[00:26:08] jumpy action in the volatility space

[00:26:10] as a result of VIX expiration happening today.

[00:26:13] So VIX expiration again is destabilizing

[00:26:14] to markets on this situation.

[00:26:17] And then the next one we're looking at the price action

[00:26:18] and in the most recent expiration is then as we head

[00:26:20] into both the FOMC now and the September of X.

[00:26:24] Yeah and I talked about VIX expiration in July.

[00:26:26] I mean literally the morning of was the high

[00:26:28] that was July 17th.

[00:26:30] August expiration, you know,

[00:26:31] you could say that markets topped out

[00:26:33] after August options expiration

[00:26:34] slash VIX expiration.

[00:26:36] Oh the monthly op-X so it wasn't huge

[00:26:38] but now we're kind of creating at a triple top

[00:26:41] of the kind of area into FOMC in op-X, et cetera.

[00:26:45] And so you know line this up as a turning point obviously

[00:26:47] given the FOMC clearly there's gonna be a move here

[00:26:51] after the XP days and it does sync up

[00:26:55] with all these various events.

[00:26:57] So we always like to look back at what we've done

[00:26:59] in previous episodes before we look forward

[00:27:01] and this one we've been talking about correlation

[00:27:03] like a lot in various ways or a different episodes

[00:27:05] and then we kind of had this vitulation.

[00:27:08] So what do we see here?

[00:27:09] Yeah I mean, August was,

[00:27:12] August was crazy and we saw a big spike in correlation

[00:27:16] after the July slash August drawdowns.

[00:27:21] And my view was that the correlation trade was dead.

[00:27:25] That is what I thought.

[00:27:27] And what I meant by that was this idea that AI

[00:27:30] and the chip sector was just gonna be this massive

[00:27:31] out performer for the rest of the year

[00:27:33] and everything was gonna look the same way it did

[00:27:37] in 2024 where if you didn't know in video

[00:27:39] you just basically were got an F in terms of your equity

[00:27:42] allocation.

[00:27:44] That theme was dead and that this idea of 60, 40 portfolio

[00:27:48] was gonna start to matter more due to rate changes

[00:27:51] which are upcoming.

[00:27:53] That view was not correct because we saw a big brush

[00:27:57] into the semis on September 11th,

[00:27:59] you know, Jensen along came out and said look

[00:28:02] customers are fighting over our chips

[00:28:04] and that led this unbelievable rally

[00:28:07] off of the September 11th lows

[00:28:09] where the S&P, you know, is a 5.6% in video game,

[00:28:13] 10 plus percent in a heartbeat

[00:28:15] and correlation decreased a little bit.

[00:28:18] What's interesting though is that we're gonna show

[00:28:19] a slide a minute correlation didn't give all the way back.

[00:28:22] So I haven't, you know, the first couple rounds here

[00:28:25] I've taken a couple punches to the face of this view

[00:28:28] but I'm not knocked out yet.

[00:28:30] And this matters because correlation

[00:28:31] is only likely to snap higher when all stocks sell off

[00:28:35] and that's why this matters.

[00:28:37] So correlation going up,

[00:28:38] this is the CBO Coral One metric.

[00:28:40] Signals that the Vix is likely to go up

[00:28:42] and things are likely to get nasty.

[00:28:44] We saw we called this correlation spasms

[00:28:46] and you saw April, July, August and September

[00:28:49] all had these spasms where suddenly,

[00:28:52] you know, correlation freaks out and jumps higher

[00:28:54] and the Vix seems to go, you know,

[00:28:56] volatility seems to jump more than one would normally expect.

[00:28:59] And there's a lot of reasons we're gonna talk about this

[00:29:03] but that's why watching this correlation seems to matter

[00:29:06] because it's the signal of a trade

[00:29:08] or a predominant theme in the market.

[00:29:10] I, E, semi-saving us all from certain disaster,

[00:29:14] you know, does that theme break down

[00:29:15] because of, you know, recessionary impulses?

[00:29:18] It's interesting because I've noticed that too.

[00:29:19] Like we saw some Vix spikes too.

[00:29:21] Like you mentioned and Jimmy Jude had a funny thing on Twitter

[00:29:24] he was talking about like,

[00:29:25] after you got that initial Vix spike,

[00:29:27] if like a grease fire,

[00:29:28] like if you put the rag over it,

[00:29:29] like you don't know what's gonna happen

[00:29:30] until you take the rag back up.

[00:29:32] Like whether there's gonna be further spikes in the future.

[00:29:34] So it's kind of one of those things

[00:29:35] we had that massive spike and then you don't really know

[00:29:37] what's gonna happen after that.

[00:29:39] Yeah, that's exactly right.

[00:29:41] And the August cell-off,

[00:29:43] our, you know, August fifth was met with massive Vix shorting.

[00:29:47] People bought a ton of puts in Vix,

[00:29:49] they bought these Vix in Vercet, TPs, et cetera

[00:29:53] and what this reminds me of is 2017

[00:29:55] because you would get these flare-ups in 2017,

[00:29:59] particularly Q4 where the Vix with spike

[00:30:02] and you'd short it and you make money

[00:30:03] and be that great.

[00:30:04] Next time this happens,

[00:30:06] I'm crippling down, right?

[00:30:07] Oh God, I did it again.

[00:30:08] I made more money.

[00:30:09] I'm gonna, you know, 10 times my money

[00:30:11] I'm putting down and then suddenly

[00:30:12] that ball doesn't mean reverse, right?

[00:30:14] And January of 2018 and we get volume again.

[00:30:16] And that kind of feels like what we're getting here, right?

[00:30:19] It's like, ooh, Valspec, short it.

[00:30:20] Ooh, Valspec, short it and then eventually,

[00:30:23] we get this move where Vals doesn't settle right back down

[00:30:25] and some people kind of get carried out.

[00:30:27] And you get to build that imbalance

[00:30:30] and that I think is this kind of lurking risk

[00:30:33] that maybe more for like start of the year

[00:30:36] kind of thing that you want to watch for.

[00:30:38] So as you look at this,

[00:30:39] and you're looking at all the indexes

[00:30:40] are you updated this since the last one?

[00:30:42] Yeah, this is in just the August view again

[00:30:45] that still choosing which weapon you choose,

[00:30:49] I do you allocate in the tech heavy space

[00:30:51] or so that I'll be one of those,

[00:30:52] that really matters for positioning.

[00:30:55] I didn't think that would matter that much

[00:30:56] because correlation was sinking back up.

[00:30:59] Obviously off these September 11th comments from in video,

[00:31:03] we got a short term out performance in this semi space.

[00:31:07] So again, I admittedly taking a little bit

[00:31:11] of an L early L here, I'm not folding on that view yet

[00:31:13] but certainly it's not going my way in terms of,

[00:31:16] you know, the semi-trade dying in favor

[00:31:18] of more macro flows.

[00:31:22] The big thing that the way that I would categorize

[00:31:25] I guess flows coming out of this September drawdown

[00:31:28] is this idea of traders essentially sold

[00:31:33] tons of puts, awful those August lows

[00:31:36] that was a predominant flow.

[00:31:37] So it's kind of like a, you know,

[00:31:39] you're trying to, it's like a lever, right?

[00:31:42] We pushed down on the put side of the equation

[00:31:43] that it's selling puts below

[00:31:45] and that jacks the market up on the other side.

[00:31:47] And as the market got jacked up on the other side,

[00:31:49] we did see some call start to get sold in the S&P.

[00:31:54] This chart here is from August 12th

[00:31:55] but you can just see that there are these big positive strikes

[00:31:57] here which tells us that at those lows and August,

[00:32:01] again people are selling puts in size

[00:32:03] and that was a predominant lift.

[00:32:05] This is the kind of the Vana component here

[00:32:08] is ball got shorted and that really helped to lift the market

[00:32:11] that added a lot of fuel to the upside into September.

[00:32:16] So let me see on this next one, this August paths.

[00:32:19] Yeah and the other thing in August

[00:32:21] we were talking about what is going to happen

[00:32:24] for the upcoming rate cut

[00:32:25] and I include this slide

[00:32:26] because I thought it was fascinating.

[00:32:27] This was a chart from, I believe August 13th.

[00:32:31] It was a 5050 odds whether we get 25 bit rate cut

[00:32:34] or 50, right?

[00:32:36] So 2050, 20, 25, 50, so no one knew.

[00:32:40] And then we got CPR retail sales, optics.

[00:32:42] Some of them are all those things in August

[00:32:43] and guess we're at well we're at 6040,

[00:32:45] I think odds are of a 50 bit cut.

[00:32:47] So really even though we got all these data points

[00:32:49] that people are having an hon about still nobody knows, right?

[00:32:53] And that's the interesting thing.

[00:32:55] And that matters to 6040.

[00:32:57] We're talking about the rebirth

[00:32:58] of the 6040 portfolio in August.

[00:33:00] All of the idea that if you own in this case TLT

[00:33:03] or Long Bonds, it actually pretty effectively

[00:33:05] hedged out your equity drawdown around the August 5th cell off

[00:33:09] and we saw the same thing,

[00:33:10] I have a slide on this moment in September.

[00:33:12] And now if we're going to start getting rate cuts

[00:33:14] cause the economy's bad and while their issues are happening,

[00:33:18] Bonds should start to perform as a viable hedge

[00:33:21] or viable alternative in 2022 and kind of 2023 they didn't.

[00:33:27] Yeah, and then we've been seeing that on our side too.

[00:33:28] I mean they have been, it's interesting.

[00:33:30] Like you saw, we went through this period

[00:33:32] like in my whole career we didn't care about inflation reports

[00:33:34] and then we got in this period where we cared deeply

[00:33:36] about every inflation report

[00:33:37] and stocks and bonds became correlated

[00:33:39] and then it's like a switch just flipped.

[00:33:41] And now we care about employment reports.

[00:33:44] We don't care about inflation reports anymore

[00:33:46] and stocks and bonds have become negatively correlated again.

[00:33:48] So like bonds are your hedge

[00:33:49] and I mean I'm not smart enough to know

[00:33:51] whether that'll continue going forward

[00:33:52] but it's just interesting to see the way it all played out.

[00:33:55] Yeah, and I'm in the same camp of not trying

[00:33:58] to start to put on a macro allocator sack

[00:34:02] cause that's certainly not me.

[00:34:04] But the idea of that there is this now alternative

[00:34:07] to equities and what that means for this correlation trade

[00:34:10] and volatility, those things are all kind of,

[00:34:13] I think link together in a lot of ways.

[00:34:17] So I wanted to focus on what has moved

[00:34:19] and I think a lot of people who listen to this regularly

[00:34:23] probably mostly like this section

[00:34:25] of the presentation where we're kind of forward

[00:34:28] more forward looking.

[00:34:30] I mentioned before that I had taken an early round punch

[00:34:33] but I wasn't knocked out on this idea

[00:34:35] of correlation not all by moving back

[00:34:37] and what you could see here is again

[00:34:38] the C.B. correlation metric in September

[00:34:42] correlation spike backup right

[00:34:43] cause things got really squirrely

[00:34:45] in the beginning of September again, not august squirrely

[00:34:47] but still squirrely and then the September,

[00:34:50] level the comments from Jensen Huang dropped

[00:34:52] correlation back down because I want to pop back

[00:34:53] into the semi trade.

[00:34:55] Well, correlation spike in VIX bike

[00:34:57] in the start of September

[00:34:58] but now correlation is higher this metric is higher

[00:35:02] than has been for 2024

[00:35:03] and I simply use this as a brahmeter

[00:35:05] to describe a lot of trades right.

[00:35:07] There's a lot of different correlation trades.

[00:35:09] There's a lot of different correlation in disguise type trades

[00:35:13] and so this just gives you brahmeter

[00:35:15] or gives me a brahmeter for how extremes

[00:35:18] maybe some of these positions have gotten.

[00:35:20] There's plenty of room for this to get squashed back down

[00:35:22] if A.I. as our saver comes back

[00:35:24] but there's also plenty of room for this kind of spike

[00:35:27] if equity is starting to sol off in favor of bonds

[00:35:30] cause we suddenly have a recession right

[00:35:32] and with that would be volatility.

[00:35:34] So again,

[00:35:36] it's not clear that the A.I. trade is dead.

[00:35:39] It seems like it's kind of on the ropes here

[00:35:41] and I think we're gonna know in the next week or two

[00:35:44] what type of environment we may be in.

[00:35:47] This next thing is interesting because like

[00:35:49] Nvidia for equity investor like Nvidia

[00:35:51] is a pretty big part of the S&P 500

[00:35:52] so it's an important stock but it's not the most important stock

[00:35:56] but it seems like in the options complex

[00:35:57] it is the most important stock.

[00:36:00] Yeah, I might have to have to disagree with you

[00:36:04] on the horizontal board stock, Jack.

[00:36:07] Well at least it's not the biggest

[00:36:09] we needed stock in the index.

[00:36:10] You're 100% your homers are the ones

[00:36:12] that I want to have a higher weight than Nvidia does.

[00:36:14] Yeah, you are absolutely one arm set right about that.

[00:36:20] I'm gonna present a couple ideas here for you in the next

[00:36:22] slides and we'll see how you feel about that

[00:36:25] but the point here is that off of the September 11th

[00:36:28] lows you saw S&H is now up 8%

[00:36:31] this is as yesterday, Q's up 5%

[00:36:34] and then I know you have spies and dowels of 2 to 4%.

[00:36:36] So if you own that tech sector that chip sector

[00:36:40] you feel really good about what's just happened.

[00:36:43] If you own the dowel you're kind of like

[00:36:45] your loopworm on this most recent rally

[00:36:48] and so this is the epitome of the correlation trade

[00:36:51] right, just the fact that if you own S&H

[00:36:54] you're king of the world whereas you've just on the dowel

[00:36:56] you're probably getting your investors

[00:36:57] are calling you saying like give my money back

[00:37:00] so I can go triple long in video.

[00:37:04] The rate thing we just talked about this,

[00:37:06] this was the probability as of yesterday 59%

[00:37:08] odds we get a 50% rate cut according to CME.

[00:37:12] So 59% say 50 bips, 41% says 25.

[00:37:16] I don't have any idea what the outcome is here.

[00:37:19] I wanted to ask you about this jack

[00:37:20] because the market doesn't know

[00:37:22] and I can't remember a time

[00:37:24] where there's this much uncertainty

[00:37:25] about the level of the cut that we're gonna get

[00:37:28] or level of increase that we're gonna get right?

[00:37:31] And my thing with that is that I don't know

[00:37:34] how you can efficiently allocate in front of this

[00:37:38] and I don't know what the ramifications are for 64

[00:37:41] or other types of allocations writ large

[00:37:44] until you know what the rate is going to be

[00:37:47] and that is uncertainty

[00:37:48] and uncertainty keeps volatility implied volatility elevated.

[00:37:53] So how much does this matter

[00:37:55] whether we get a 50 or 25 bit rate cut?

[00:37:57] I mean you're definitely more of the macro man here.

[00:38:00] So what do you use there?

[00:38:01] What is there one of us are?

[00:38:01] What's interesting to me about this though,

[00:38:03] this is the opposite of Powell.

[00:38:05] Powell has been pretty good about saying

[00:38:07] there's usually no doubt going into these meetings

[00:38:09] what they're gonna do and he has to put governors out there

[00:38:12] and have them give speeches to say what they're gonna do

[00:38:14] if he has to leak it to Nick Temerales to Wall Street Journal

[00:38:17] like usually something happens before the meeting

[00:38:19] where it's like people are pretty locked in on what's gonna happen

[00:38:22] and if we're they've let it go to this meeting

[00:38:24] where it really is a toss-out.

[00:38:26] Yeah, and I think that uncertainty is concerning to me

[00:38:31] because it makes a very difficult position in front of it.

[00:38:35] And I think that the upside is pretty clear

[00:38:38] in the S&P, you get a 5,700 area.

[00:38:40] There's a lot of positive gamemma

[00:38:42] and that's probably where the rally

[00:38:43] in the short term quite down

[00:38:45] but this downside is very exposed in this environment

[00:38:48] and so I don't know if it's 25 cut is not enough

[00:38:51] and people get upset or 50 bucks says like 50 bits

[00:38:53] excuse me, he says, hey we're in a recession

[00:38:55] and things aren't that great.

[00:38:57] So we saw off of that, I mean,

[00:38:58] you can make a case for either.

[00:38:59] So from our lens it's this uncertainty

[00:39:03] is a breeding ground from more volatility than people expect

[00:39:06] or anticipate.

[00:39:08] And so I think going into this puts are probably under price.

[00:39:12] It doesn't mean that we get downside movement.

[00:39:14] I have no idea.

[00:39:15] It's just that if we do get downside movement

[00:39:17] I don't think that the options market is pricing in

[00:39:20] the level of volatility that we could see

[00:39:22] because of the correlation dynamics

[00:39:24] and some of these other things that we're talking about.

[00:39:26] And to your point, this is like a three-dimensional chest thing

[00:39:28] because first of all nobody really knows

[00:39:30] what the market wants here.

[00:39:32] I could make a case 50 basis points is good for stocks

[00:39:35] and I would lean the other way probably

[00:39:36] that maybe it's seen as a little bit of a panic

[00:39:39] if they do 50 basis points and maybe it's bad for stocks

[00:39:41] but on one hand you've got what do people want

[00:39:43] and on the other hand you've got the stuff you're familiar

[00:39:45] with which is how are people positioned into this stuff?

[00:39:48] And so to try to figure out what's gonna happen

[00:39:49] you've gotta take that whole thing

[00:39:50] and try to put it together into a puzzle

[00:39:52] which makes me happy and a long term investor

[00:39:54] and I don't have to try to figure that out.

[00:39:57] Yeah, and I like volatility.

[00:40:00] I don't want prices to go down

[00:40:03] but I find that when you get these moves

[00:40:05] and I don't think the market is pricing in the appropriate

[00:40:09] or signing the appropriate volatility to a market,

[00:40:13] those are the types of trades that I generally do best

[00:40:15] and so I am kind of hoping for that we get a little bit

[00:40:18] of a draw-down here.

[00:40:19] I mean equity markets are not allowed to decline

[00:40:21] over the long term anyways

[00:40:22] so as a long term investor you don't care.

[00:40:24] Yeah, I can make a few bucks.

[00:40:26] I can make a lot of money.

[00:40:28] I can make a lot of money.

[00:40:30] It's also interesting, like you'll see

[00:40:32] and this is also goes into the options market

[00:40:34] like when we did have periods where we had uncertainty

[00:40:36] about what the Fed would do

[00:40:37] a lot of times like the first move on the Fed day was the wrong move.

[00:40:41] Like you'd have some massive move in one direction

[00:40:42] and then I'm sure this has to do with options

[00:40:43] and stuff and then it would just completely go the other way.

[00:40:46] So like if it's not even like the way they react

[00:40:48] when this first comes out

[00:40:49] is gonna be what the final reaction is gonna be.

[00:40:52] Yeah, you're 100% right.

[00:40:53] And I think that to that point

[00:40:56] you could have a very volatile reaction on her 5,600

[00:41:00] and these options business get cleared out

[00:41:02] and people buy zero DT calls

[00:41:04] like they tend to do on big dips like August 5

[00:41:07] and then suddenly the market like rallies back

[00:41:10] and then you're back into a stable zone.

[00:41:12] So these moves can happen very fast

[00:41:15] and I think writ large unless we're clearly in a recession

[00:41:19] or there's some type of a credit event.

[00:41:21] The odds of a long-term pro-tracted equity drawdown

[00:41:25] is moment or probably not all that high.

[00:41:27] So a correction here or another spasm

[00:41:30] is certainly in the cards but as far as saying,

[00:41:33] hey we're gonna drop 20% by the end of the year.

[00:41:36] I don't see the positioning for that.

[00:41:39] If anybody wants to subscribe

[00:41:40] the Jack and Brents macro newsletter 99 95 a month

[00:41:43] we're offering a free discount offer.

[00:41:47] Probably the last two people you want us to subscribe to

[00:41:49] the Techram newsletter for them but I give it a go

[00:41:51] to our best shot.

[00:41:53] Yeah, but look if we go on our 50's

[00:41:56] 100 make a couple bucks and send 995 to Jack.

[00:42:01] This again is the 6040 portfolio idea

[00:42:03] that we saw bonds perform very well

[00:42:05] in the August or out out and again

[00:42:07] in the September drawdown

[00:42:08] and so there isn't all turn of now

[00:42:10] to the equity space which is a different dynamic

[00:42:12] than we've had.

[00:42:13] And so it makes me think about equity hedging

[00:42:16] how much equity hedging will there be

[00:42:20] if people can start to allocate the bonds.

[00:42:22] It changes I think a lot of the dynamics

[00:42:24] that are at play in the markets

[00:42:25] and I'm not here to say, hey,

[00:42:28] I fully understand the implications of this

[00:42:30] but I am here to say that we're seeing these flows

[00:42:33] in this change in trend or a change

[00:42:37] in investment opportunities for people

[00:42:39] and I think that can have some long term long term effects.

[00:42:44] So as we move forward you guys have things here

[00:42:45] that we're watching as we head into September.

[00:42:46] Yeah, so I hinted at the beginning of this room

[00:42:51] we talked about in video in a big way

[00:42:52] and that's because for my seat

[00:42:55] it is the only stock that matters really

[00:42:58] and we wrote about the 911 move on 912.

[00:43:02] So I show our 912 founders,

[00:43:05] no, in basically what we said there is that

[00:43:06] it was the Nvidia CEO comments in the morning

[00:43:08] that spurred on an unbelievable amount

[00:43:11] of options activity in Nvidia.

[00:43:12] Hundreds of thousands of short dated next expiration

[00:43:15] slash zero dt, what I'm gonna call hundreds of thousands

[00:43:18] of calls for bought.

[00:43:20] We saw about $2 billion worth of Delta's bought

[00:43:23] in the S&P select implies that there's billions

[00:43:26] of dollars worth of stock that has to get bought

[00:43:28] by market makers and we discussed the route line

[00:43:31] the knock on effects of this.

[00:43:34] Coincidentally, Charlie McGelligut

[00:43:36] who is the OG of Gamma analysis

[00:43:40] and puts out a very famous, you know,

[00:43:42] daily note from a Numeria said a lot of the exact same things

[00:43:47] and he put it and he called it the Nvidia Industrial Complex

[00:43:50] so I stole that tagline from him

[00:43:52] but they basically outlined the same idea

[00:43:55] and the reason I bring this up is because a lot of times

[00:43:57] I write some things or put some ideas out there

[00:43:59] that seem a little wanky or seem a little extreme

[00:44:02] and if I can get a big bank analyst to line up with me

[00:44:06] then I feel a lot more secure about my position.

[00:44:09] Market so Charlie probably doesn't this but thank you sir

[00:44:13] if you did I have an right similar notes.

[00:44:17] And so a lot of the notes, a lot of the charts

[00:44:18] and here were interesting

[00:44:19] and the other thing that I want to talk about

[00:44:21] and this is that CBO just put out a piece

[00:44:24] and what's funny about this is we talked a lot

[00:44:26] about the correlation, you know, dynamic

[00:44:28] and the impact of markets there

[00:44:30] and we talk about a lot of themes here

[00:44:32] and we put them out into ether specifically

[00:44:34] on this monthly call that we do

[00:44:36] and you often don't get a lot of feedback

[00:44:38] on these ideas, right?

[00:44:40] Like people may talk about them

[00:44:41] but you don't get a lot of direct feedback.

[00:44:43] Some of the direct best direct feedback

[00:44:45] is in the CBO exchange notes

[00:44:47] they will respond to something indirectly

[00:44:51] and you know the theme is getting out there.

[00:44:53] So before it was hey, correlation doesn't matter,

[00:44:56] don't worry about it

[00:44:57] and in this one it is hey, the zero DTE

[00:45:00] in video calls on September 11th didn't matter

[00:45:03] and that's when I know we're getting somewhere

[00:45:05] because if the CBO feels like they get

[00:45:06] to defend zero DTE options or whatever it is

[00:45:08] then I know like okay, we're poking the right bear.

[00:45:12] And so their comment here was that look,

[00:45:15] don't worry about Nvidia

[00:45:15] it was only 7% at most of Nvidia's daily volume

[00:45:19] on September 11th

[00:45:20] and they say that the gamma rebound

[00:45:22] is only 7%.

[00:45:23] This leaves out respectfully to the CBOs.

[00:45:27] I know that Tom, who wrote this piece,

[00:45:29] he's sort of credits with he can run academic circles around me

[00:45:33] and I know doubt about that.

[00:45:34] And so I respectfully push back against this idea

[00:45:37] that 7% and number one doesn't matter much,

[00:45:40] they claim it only was responsible

[00:45:42] for 70 cents of impact.

[00:45:45] I'm gonna push back against that idea

[00:45:47] in the pursuing slicer.

[00:45:50] We measured Delta Impact which is dollars

[00:45:52] that have to be bought for these short data

[00:45:55] in video calls at around 1.3 billion

[00:45:57] and numerals note how it closer to 2 billion.

[00:45:59] So that inferred that roughly a billion dollars

[00:46:01] that the Nvidia would have to be bought

[00:46:03] just due to new positions being added.

[00:46:06] So that would be in addition to this 7% of gamma

[00:46:08] hedging that would have to take place.

[00:46:10] So you're talking about a pretty substantial amount

[00:46:12] of flows in addition to the limited view

[00:46:16] that the CBO offered there.

[00:46:20] This obviously has a bunch of knock-on effects

[00:46:22] that I'm gonna talk about.

[00:46:23] It's not just about the fact

[00:46:24] that people are buying in video to your point before

[00:46:27] Nvidia is the biggest stock in a lot of different indices.

[00:46:31] I'm gonna talk about that in one second.

[00:46:33] I just wanted to highlight first how crazy

[00:46:35] these Nvidia volumes are.

[00:46:37] This is just September volume as of Monday.

[00:46:40] You can see the amount of call volume calls

[00:46:42] and Nvidia and a lot of people listen

[00:46:43] to this on a podcast and not video.

[00:46:46] So this is 25 million calls traded in September

[00:46:50] for Nvidia.

[00:46:51] The next highest is the SPY which traded 16 million calls.

[00:46:56] And then you go to Tesla,

[00:46:57] which is the next equity that's 8 million

[00:47:00] in apples only four.

[00:47:01] So triple the next one is basically.

[00:47:05] Yeah, it's like Nvidia is crazy.

[00:47:07] It's an entity unto itself.

[00:47:09] A lot of people have also pointed out

[00:47:10] that it's weird that the Nvidia call volume is first

[00:47:14] but SPY to put volume at 22 million

[00:47:17] isn't eerily same number.

[00:47:18] Those noxial values aren't the same.

[00:47:20] But I've talked to a few people,

[00:47:22] particularly smart guy Sam from Oppenheimer

[00:47:24] who has said that there is a correlation trade

[00:47:27] between Nvidia options and SPY to options.

[00:47:28] It's funny that the number of SPY to calls

[00:47:30] is almost equal to the, excuse me,

[00:47:33] the number of video calls that equal to the SPY to puts

[00:47:34] like they're kind of related.

[00:47:36] And there's a couple of people like my friend Sam

[00:47:39] at Oppaier's point of, hey, there's a link trade

[00:47:43] here between zero dt and Nvidia and zero dt SPY to write.

[00:47:46] I don't have enough to conclusively say anything on that.

[00:47:50] It's just Nvidia is a world unto itself

[00:47:52] if you just look at volume.

[00:47:55] Okay, this is from the mirror on September 11th.

[00:48:00] They say in the math is pretty simple here that Nvidia

[00:48:03] was 44% of S&P's return.

[00:48:06] So that accounted for 44% of the 1.1% return on 911

[00:48:10] Nvidia accounted for 27% of the return

[00:48:13] for the NASDAQ on 911.

[00:48:16] And if you look at the other names

[00:48:17] that were responsible for the big movement

[00:48:19] of the equity indices that day,

[00:48:23] you have Microsoft, Avgo, AMD, Meta, Apple, A-Met.

[00:48:28] Those are all chip AI related names, right?

[00:48:30] So Nvidia's comments of chip demand is in stationable,

[00:48:34] sporks a chip rally led by Nvidia

[00:48:38] that just shoves the entire equity complex higher

[00:48:43] just as a fact of those stocks went up.

[00:48:46] And then we obviously are sitting here trying to say,

[00:48:48] look, these options trades are forcing Nvidia.

[00:48:52] So it's a chain reaction of options force,

[00:48:55] Nvidia up in video forces, everything else up.

[00:48:59] And if not just a matter of S&P NASDAQ being dragged higher,

[00:49:04] the only thing being dragged higher by Nvidia,

[00:49:07] I looked up, I should have asked you this quiz question.

[00:49:09] I don't know if you read this slide already,

[00:49:11] but how many for our listeners out there,

[00:49:14] how many ETFs do you think Nvidia is part of?

[00:49:18] 528 is the answer, I've got a shocking.

[00:49:21] Including a bunch of just Nvidia,

[00:49:23] but I'm not thinking I was in them,

[00:49:24] there's a couple that are only in a video and they're lever.

[00:49:27] So that's 2.3 billion shares are owned by Nvidia ETFs,

[00:49:30] the biggest being spiders, and the public float.

[00:49:35] So the idea here that I've been trying to mathematically

[00:49:38] kind of pin down, but the public float of Nvidia's

[00:49:41] 23 billion shares, and 66% of that institutional ownership,

[00:49:46] which is about 15 billion shares.

[00:49:49] Obviously these ETFs are adjusting all day long,

[00:49:51] but you have some people who just own Nvidia

[00:49:54] and they're fun and they're big holders,

[00:49:55] and so that figures into that 66% number.

[00:49:58] And then the average ADV is 344 million shares.

[00:50:05] So per the C-bone note, they said 7% of ADV

[00:50:09] was traded because of gamma rebalancing at most,

[00:50:12] and so that's about $2 billion worth of shares.

[00:50:14] So if you believe in addition to that,

[00:50:16] we had one to $2 billion with the Delta's

[00:50:19] that had to get hedged.

[00:50:20] Remember the star of our video said

[00:50:21] if people buy calls, dealers got a buy in video stock,

[00:50:25] that kind of doubles that ADV to certainly something close

[00:50:28] to 10% to 15% of ADV.

[00:50:34] And on the right as a chart from the mirror

[00:50:35] talking about the leveraged ETF rebalances

[00:50:39] that have to take place because of Nvidia,

[00:50:41] and you can see it's $8 billion rebalancing

[00:50:44] in these levered products as a function of this Nvidia move.

[00:50:48] And it's not gonna fix.

[00:50:50] And so the point here is that Nvidia by itself

[00:50:53] is a small component of the S&P,

[00:50:55] but it is a massive component of the equity complex writ large.

[00:50:59] And so when you take a lot of options,

[00:51:05] hedging flow and jam it into the market,

[00:51:07] remember these guys buy large

[00:51:10] if Nvidia's up 10%, you can't sit there and say,

[00:51:13] I need to buy stock.

[00:51:14] I'm gonna wait for a stock to come in a little bit, right?

[00:51:16] You need to buy stock.

[00:51:17] You're gonna buy it now.

[00:51:17] It's a margin calling away these hedging flows

[00:51:19] in these active environments.

[00:51:21] So you have let's say $4 billion worth of dealer hedging

[00:51:25] flows that occur after the Jensen Juan comments

[00:51:28] at 11 and morning,

[00:51:29] and then suddenly all stocks are being shoved higher

[00:51:32] and that creates this feedback loop of buying

[00:51:34] in the equity complex because of this butterfly effect

[00:51:38] of options trading.

[00:51:39] And the other point here about the float

[00:51:41] is that I think that the tradeable float for Nvidia,

[00:51:45] instead of being call it 15 billion shares

[00:51:47] as a fraction of that, right?

[00:51:49] Because there's a lot of retail people that hold it.

[00:51:51] There's these more active ETFs that don't probably

[00:51:53] fagal into that institutional ownership number.

[00:51:56] There's dealer hedging flows that they're long.

[00:51:59] These deltas, there's a whole bunch of other people

[00:52:01] that are probably reducing the float.

[00:52:03] The tradeable float of this name significantly,

[00:52:06] and that is into the face of massive call volumes, right?

[00:52:11] I mean, you have decreasing float

[00:52:13] and I actually ping Charlie on this idea.

[00:52:15] And he's like, yeah, to the idea of buybacks

[00:52:17] into this, right?

[00:52:18] There's a big buyback in all these names,

[00:52:20] which reduces the tradeable float.

[00:52:21] And then you have record call volumes at on top of that,

[00:52:24] which refers that there's more active dealer hedging flows

[00:52:26] that are driving the Nvidia bus here.

[00:52:30] So I don't know if you could put all that together

[00:52:31] in this matrix of a word style, but hopefully that theme

[00:52:37] is clear in the way that I kind of see

[00:52:40] the importance of Nvidia or how it lays out.

[00:52:42] It ties really well on what we did at the beginning,

[00:52:44] which is we talked about the importance of options flows.

[00:52:46] And this is a real world example

[00:52:47] of how important those flows are,

[00:52:49] like in a particular stock, which is,

[00:52:51] and I was wrong saying, I mean,

[00:52:52] it is not the biggest wheat in the market,

[00:52:55] but it is kind of even in my world

[00:52:56] that it's the bell weather of the market now.

[00:52:58] People care less about Apple and Microsoft

[00:53:00] than they do about Nvidia.

[00:53:02] So although it might have a smaller wheat in the index,

[00:53:04] like Nvidia tends to drive the market,

[00:53:05] I think a lot more than those bigger names do these days.

[00:53:08] Like everybody's watching it.

[00:53:08] It's like the bell weather for stocks at this point.

[00:53:12] Yeah, what 100%.

[00:53:13] And it ties into even forgetting the linkage of these flows

[00:53:16] and everything.

[00:53:17] I mean, from a sentiment perspective,

[00:53:20] you know, if you're underperforming the market this year,

[00:53:24] you don't have a choice, but to probably allocate more

[00:53:26] to Nvidia in the same space, right?

[00:53:27] Because that's all that's performing.

[00:53:28] So, you know, there's a chase that is involved there.

[00:53:31] As well as just retail flows,

[00:53:32] one end to chase.

[00:53:33] I mean, there's just a lot of chasing.

[00:53:35] It's a giant momentum trade at the end of the day,

[00:53:38] driven by an increasing options complex

[00:53:40] in a decreasing float.

[00:53:43] And the other reason that this is interesting

[00:53:45] is because when you had these risk off events

[00:53:48] like August 5th, that zero DTE or short-dated options volume,

[00:53:53] it's like the bid gets pulled and also

[00:53:55] and you get this liquidity vacuum

[00:53:56] that Nvidia just falls into, right?

[00:53:59] And so what happens is when we go risk off

[00:54:01] these flows that drive in video higher,

[00:54:03] these momentum trades disappear, the plug is pulled on those

[00:54:06] and then all of a sudden you go,

[00:54:08] woo, and we just fall into a vacuum.

[00:54:09] So you have a situation where like in April

[00:54:11] and I think it was the same in July and August,

[00:54:14] S&P was down 5% over the matter of a few days,

[00:54:16] but Nvidia was down 20% over those same periods, right?

[00:54:19] And that's the situation here that we sit here with the Fed

[00:54:22] and whatever is going to happen is,

[00:54:25] if the plug is pulled in correlation spikes,

[00:54:28] then Nvidia's going to get absolutely pounded

[00:54:30] and that's going to force the rest of the equity complex down

[00:54:34] and then it shoots of all up quite a bit.

[00:54:36] So go back to our original criteria though.

[00:54:37] We talked about if you've got a big move into expiration

[00:54:40] if you've got a huge expiration,

[00:54:42] you could have a reversal and it is that true

[00:54:43] of Nvidia coming to this one.

[00:54:45] I think that there's a soft underbell here, right?

[00:54:49] We've rallied a lot into an area of uncertainty to the upside

[00:54:53] where the predominant trade now has been

[00:54:55] to be selling calls into this latest September rally,

[00:54:58] reducing maybe some of the calls

[00:55:00] short-dated calls that people have bought into.

[00:55:02] So the call positions are light right now

[00:55:04] or lighter relative and there's no one really betting

[00:55:08] on a ton of equity downside at the moment

[00:55:10] and there's this kind of this point of this game

[00:55:11] at chart here.

[00:55:13] You can see that there are some short calls

[00:55:17] which are these positive game of bars up here in Nvidia.

[00:55:20] But there's no real positioning to the downside, right?

[00:55:22] There's a little bit of local positioning.

[00:55:24] People don't believe in protracted downside

[00:55:26] until it's kind of like the first shot is fired.

[00:55:29] So we have this short call complex on

[00:55:32] that's sort of like the upside is stalled

[00:55:34] and we need another catalyst here besides Jensen's comments

[00:55:37] and I don't know if 25 Bipses the answer

[00:55:39] or 50 Bipses the answer to restart the bull

[00:55:41] but in the short term I think that if the market gets a little disappointed

[00:55:44] then you immediately get one of these kind of like correlation spasms

[00:55:47] where suddenly Vol gets very jumping

[00:55:49] and people are under prepared for it, right?

[00:55:52] And that is the issue

[00:55:54] or that's the risk that I see lurking right now

[00:55:56] that you get this left tail move

[00:56:01] because people aren't watching for

[00:56:02] and they're not positioned for it in the right way.

[00:56:05] This next slide is interesting

[00:56:05] because this is something you've been hearing

[00:56:06] for a long time now which is basically beneath the surface

[00:56:10] there's not a lot of liquidity in the market.

[00:56:12] So what are you getting at with this one?

[00:56:15] This chart is from August 5th.

[00:56:16] This is ES Topical Booklccooty

[00:56:18] that's the ESE mini future

[00:56:20] and this is from Goldman

[00:56:22] and it basically showed that you see the E mini future

[00:56:26] liquidity evaporate.

[00:56:27] We also saw zero dt volume in the S&P on August 5th

[00:56:30] was only 25% which was the lowest really such zero dt

[00:56:33] started trading.

[00:56:35] So this ties with this idea of liquidity,

[00:56:37] liquidity is an illusion in this market

[00:56:43] and the result is that as soon as volatility starts

[00:56:46] to pick up IE, the VIX starts to catch a bid.

[00:56:48] Bids and offers disappear really across all products

[00:56:51] and then suddenly you're seeing selling into this vacuum

[00:56:54] and that is a theme that is very consistent in this market

[00:56:58] and something that people need to be wary of

[00:57:00] and if you're a long-term investor

[00:57:01] you know that price is going to be more agitated

[00:57:04] when there's less liquidity, right?

[00:57:06] Price is overextended to the downside

[00:57:07] and sometimes the upside, but particularly downside

[00:57:10] in this case because you know this momentum trades

[00:57:12] seems to shut off when VALS bikes

[00:57:14] and then you really see big drawdowns

[00:57:16] and so you know when you talk about VIX 65 on August 5th

[00:57:20] that's a product of poor liquidity.

[00:57:21] Bids and asks an option of widen out

[00:57:23] and that creates the VIX 65 calculation.

[00:57:26] September we saw that liquidity evaporate

[00:57:28] and again if I think we break 5600 tomorrow

[00:57:30] that's this you know flare going up that hey

[00:57:33] liquidity is probably gonna disappear

[00:57:35] and VALS gonna spike correlations, gonna spike

[00:57:37] and in the market it's gonna have kind of a nasty couple

[00:57:40] of sessions.

[00:57:41] Is there more of a major risk like we've talked about

[00:57:43] like a short-term nasty couple of sessions

[00:57:44] and that's kind of the way it's played out so far

[00:57:46] and these spikes and then things have recovered

[00:57:48] like this lack of liquidity is it more of a risk

[00:57:50] we could get like a more major event because of this?

[00:57:54] I think that the largest volatility events

[00:57:57] looking back are tied to credit events

[00:58:01] and you know the fed seems to be easing here

[00:58:03] in some former fashion which I think would ease credit markets.

[00:58:07] Again, I'm stepping into a zone that I'm certainly not qualified

[00:58:12] for non-95 and can offer you great insight.

[00:58:17] But when you see credit events or credit issues

[00:58:19] that's where you got a brace for higher VIX essentially right?

[00:58:24] August 2015 those types of wild markets

[00:58:28] or 2018 we had these weird bank issues right

[00:58:31] and monetary system issues.

[00:58:33] And so none of that seems to be an issue right now

[00:58:36] and so I think what you're getting is

[00:58:37] volatility's being exacerbated by these correlation

[00:58:40] spasms again in positioning right

[00:58:43] as opposed to they're being a systemic risk.

[00:58:45] So we could very easily see a 5 to even 10% drawdown

[00:58:49] in markets and then we rallied

[00:58:51] to the end of the year based on whatever else

[00:58:53] is floating people's boat at the moment.

[00:58:57] There's not a great reason for equities

[00:58:59] and I don't think to reprise if Nvidia starts to say,

[00:59:02] hey actually we lied about chip sales going up

[00:59:04] they're going down then maybe but there at the moment

[00:59:07] doesn't seem to be credit issues.

[00:59:09] You know if you get a carry trade blow up

[00:59:11] of some kind that of course you know

[00:59:13] that can cause certainly some decent drawdowns

[00:59:16] but those moves seem to reverse

[00:59:18] and I don't know why we wouldn't see big mean

[00:59:20] reversion off of drawdowns heading into the end of this year

[00:59:24] without some type of true risk event.

[00:59:29] Let me just refer to that another way like the

[00:59:31] positioning itself is not enough to cause a protracted

[00:59:33] prolonged decline.

[00:59:34] Let me sense.

[00:59:36] As we wrap up this last slide you always

[00:59:37] like look at some potential outcomes as we hit forward.

[00:59:41] Yeah this chart was from yesterday and we had 56

[00:59:44] 50 as our risk off area and that's where we like

[00:59:47] to hedge or be more neutral in our positioning.

[00:59:51] We upgraded this level to 5600 this morning

[00:59:53] because of new positions that came into the market

[00:59:55] and so the idea here is that if we break 5600

[00:59:58] we believe that you should be long puts, long vix calls,

[01:00:02] short future, some type of having some type of short

[01:00:06] exposure to the market or reduce long equity exposure.

[01:00:10] If we hold 5600 they're generally speaking

[01:00:13] as positive gamut in that area.

[01:00:14] That positive gamut creates supportive flows

[01:00:19] that tend to lift the market up kind of positive drift

[01:00:22] and there's a big position particularly 5750

[01:00:25] which would kind of be the end of month target.

[01:00:26] So the way that we're playing this is simply

[01:00:29] if we go through the Fed, FOMC and we don't break 5600

[01:00:32] stay long and look for kind of a 5750 area by end of month

[01:00:36] and if we break 5650 we're playing the shorts on.

[01:00:42] That sounds good so yeah so to wrap up

[01:00:44] we break 5600, we break 5600

[01:00:47] I think I just said 5600.

[01:00:48] So hopefully our risk of transition

[01:00:50] we're putting this out in the audio feed you know

[01:00:53] understood this part of this but I think it was great

[01:00:55] for us to do that at the beginning

[01:00:56] and to really understand why this matters

[01:00:58] and why even if you're not trading options

[01:01:00] I mean I've never traded an option in my life

[01:01:03] but I do like I learn a lot from this

[01:01:05] and it helps me better understand what's going on.

[01:01:08] So hopefully our regular access

[01:01:09] with turns listeners got that part about

[01:01:10] and then our loyal listeners is Jason Buck called them

[01:01:13] at our FOMC cast, are our people hopefully

[01:01:14] Jason you're still listening here at the end

[01:01:16] but hopefully they got a lot out of these second part here

[01:01:18] where we looked at the current expiration

[01:01:20] but I really enjoyed doing these like I learned a lot every time

[01:01:22] like I would have never had any idea

[01:01:24] like the degree of what's going on within Vidiya.

[01:01:26] It's something like if I saw what's in Vidiya moving

[01:01:29] I would think like there's some fundamental catalyst

[01:01:31] or something going on and without looking at this stuff

[01:01:33] I wouldn't fully understand it.

[01:01:36] Yeah well thanks so much for that Jack

[01:01:38] I really appreciate the sentiment.

[01:01:41] We hope we're able to distill

[01:01:43] why these flows matter

[01:01:45] and immediately a lot of the flows

[01:01:47] are offset seen like they're short dated

[01:01:49] but you do get these big moves right

[01:01:51] and they seem to be happening with a little bit more occurrence

[01:01:53] where longer dated investors may want to sit up

[01:01:56] and take notice of again the options market signal

[01:01:59] so thanks very much for that

[01:02:01] and also shout out to Jason Buck

[01:02:02] because of him I drink liquid death

[01:02:05] which is very expensive

[01:02:07] so he's a supporter of that

[01:02:09] and hopefully he gets a feeling.

[01:02:10] I'll never try that.

[01:02:12] I don't know if I should maybe he sounds like

[01:02:13] he's delicious water.

[01:02:14] He said it was delicious

[01:02:15] and that excellent mineral content

[01:02:16] and here I am the sucker

[01:02:18] that's adding to the billion dollar liquid death empire

[01:02:21] so liquid death is looking to sponsor a show

[01:02:23] maybe they will come on and help us out Jack.

[01:02:25] Well for yeah we'll think any sponsors we get this way

[01:02:28] right next to that chart we can have a nice little liquid debt

[01:02:30] but logo up here we're happy to do it

[01:02:32] we are very reasonable rates

[01:02:35] but anyway for anyone who is listening

[01:02:36] on the excess of turns feed if you want to listen

[01:02:38] to any of these in the future

[01:02:39] there is an audio feed of the optics effect

[01:02:41] it's also on the excess of turns YouTube channel

[01:02:43] we do these once a month on the week of options expiration

[01:02:45] and I always find it interesting to see what's going on

[01:02:48] and thank you everybody for joining us and we'll see you next time

[01:02:51] Thanks Jack this is Justin again

[01:02:53] thanks so much for tuning into this episode

[01:02:55] if you found this discussion interesting and valuable

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[01:03:04] the opinions expressed in this podcast do not necessarily reflect the opinions of the LVA capital

[01:03:07] no information on this podcast should be construed as investment advice

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