$60 expected move on the S&P today
Mr. Toad's Wild Ride The S&P expected move for today is $60. Here is what that is telling you. My power went out at 5 am this morning. Construction crew cut a cable and the whole area was down. When you lose power in Phoenix, you have until about 9 am before things get ugly.…
Fast 35% win while the world panics (+ a $1.8T problem nobody's watching)
I paid 80 cents on a Starbucks In/Out spread. This morning I sold it for $1.08. Done. 35% profit in one day. Meanwhile, oil is ripping, and the tape is whipping in every direction. None of it mattered. I knew the expected move. I knew the range. I traded it, took the money, and…
3 Trades I just broke down on Schwab
I just got off air with Schwab, and I had to get this out immediately. The market's in full volatility mode right now. Up 300. Down 400. Back up 200. And here's the thing — in this kind of environment, you don't need to be bullish or bearish. You just need to be positioned. I…
What happened to tech?
The S&P gapped up this morning. End of quarter. Some short covering. A bit of relief after five straight losing weeks. You want to celebrate that? Go ahead. I was looking at something else. Tech was not there. Apple flat. Nvidia underwater. Microsoft barely moving after getting crushed for weeks. Broadcom unchanged. Google nominal. Tesla…
You are buying puts because the market is falling. The math says you need to be right 75% of the time just to break even.
Every time a market like this starts rolling over, I get the same question. Why not just buy puts? Markets are falling. Puts make money when stocks go down. Seems obvious. It is not. When implied volatility is sitting at 50 to 60 percent, the premium you pay for any option is enormous. Implied volatility…
Eleven Consecutive Weeks Inside the Expected Move. You See Calm. I See a Trap.
Eleven consecutive weeks inside the expected move. You see a calm market. I see a trap. Here is the number that should be keeping you up at night. The expected move is what the options market prices in as the likely weekly range for the S&P 500. When the index closes inside that range at…
Three trades I just walked through on Schwab — one's falling apart, one's about to snap, one can't catch a bid
I just got off air with Schwab, and I had to get this out immediately. The market's in full volatility mode right now. Up 300. Down 400. Back up 200. And here's the thing — in this kind of environment, you don't need to be bullish or bearish. You just need to be positioned.…
The weekly expected move was $188.88. The market tested both edges this morning.
The weekly expected move for the S&P this week is $188.88. That means the options market, before a single tweet dropped, before a single headline ran, priced in a range of roughly 6,508 on the downside to 6,695 on the upside. Write those numbers down. Because everything that happened this morning fits inside that range…
$5.7 trillion expires today. Not in the morning. At the close.
$5.7 trillion expires today. Not at the open. Not a typo. $5.7 trillion in options contracts clear today. Roughly $2 trillion hit at the morning open when the SPX AM settlement fired, and the rest rolls off at today's close. Most traders spent the morning watching oil prices and reading headlines about Iran. Here is…
Fed Day, Negative Gamma, and 3 Setups That Could Explode Today
I just wrapped my segment on Schwab, and I had to get this out right as the Fed makes its announcement. Fed Day. Zero rate expectations. And the S&P is sitting on a gamma time bomb. Here's what nobody's talking about: dealers are sitting in negative gamma right now. That means if the market starts…