Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Tracy, we have been in a leather jacket.
Speaker 3: Yeah, well it's not just a leather jacket. It's a
Speaker 3: black leather blazer with sort of braided edges. It's got
Speaker 3: a little bit of a wait, is this an insult
Speaker 3: or a compliment? I don't know, a little bit of
Speaker 3: a little bit of a Ren fair Field.
Speaker 1: Absolutely, that's a big to a volatility nerd. That's a couple.
Speaker 3: Okay, good, all right. I was a question.
Speaker 4: This is like one of it that would be a
Speaker 4: very polarizing not to me.
Speaker 2: I do not have renfair vibes. But look, I respect it.
Speaker 2: These are renfair time, These are fair times. I get it.
Speaker 2: I get it.
Speaker 1: Absolutely. There's pictures of me on Twitter in you know,
Speaker 1: Nightingale armor with his swords, So I think this is
Speaker 1: a fair game.
Speaker 2: I did a deadlist.
Speaker 3: I'm both the most popular trader and most successful trader
Speaker 3: at Citadel. That is going viral, barges.
Speaker 2: This isn't after school special.
Speaker 3: I've decided I'm going to base my entire personality going
Speaker 3: forward on campaigning for a strategic pork reserve in the
Speaker 3: US Black Goal. These are the important questions that robots
Speaker 3: taking over the world.
Speaker 4: No, I think that like in a couple of years,
Speaker 4: the AI will do a really good job of making
Speaker 4: the Odd lotch podcast. One day that person will have
Speaker 4: the mandate of heaven.
Speaker 3: How do I get more popular and successful?
Speaker 2: We do have.
Speaker 3: You're listening to lots More where we catch up with
Speaker 3: friends about what's going on right now, because.
Speaker 4: Even when the Odd Lots is over, there's always lots More.
Speaker 3: And we really do have the perfect guest.
Speaker 4: We are, of course with Ben Eiffer qv R Advisors.
Speaker 4: Then who's been getting steamrolled the most by this market?
Speaker 4: And I have some thoughts on this market, but I
Speaker 4: want to hear your No.
Speaker 1: It's a super fun market. I mean really, First you
Speaker 1: had the deep seak thing, yeah, right, and that was
Speaker 1: really interesting because equity markets went down, but the fund
Speaker 1: was all under the surface, right, what did we sell
Speaker 1: off eight or ten percent? And index? It wasn't a
Speaker 1: huge deal, but there were like eight standard deviation moves
Speaker 1: in market, neutral factor type relationships and crowded equity long
Speaker 1: short and so you saw you know the type of
Speaker 1: people that had the really popular equity positions. You'll Nvidia
Speaker 1: and you know Tesla and all these kind of stocks
Speaker 1: just get really really murdered. You heard of a lot
Speaker 1: of pain at the big multistrats. Again you have to
Speaker 1: put that in context because they're pretty well risk managed.
Speaker 1: The losses weren't that large in percent terms, but you
Speaker 1: had again just very very very large moves. And then
Speaker 1: I think the interesting thing about that was that led
Speaker 1: to a lot of d risking in hedge funds. So
Speaker 1: you had pretty high gross in net leverage coming into
Speaker 1: that and then it came off quite a lot, you know,
Speaker 1: a lot of d risking. And then when you know
Speaker 1: that when Liberation Day hit, I think positioning wasn't nearly
Speaker 1: as you know, as offsides as it could have been otherwise.
Speaker 1: And so you did see obviously big drawdowns in the
Speaker 1: equity market and big rallies back a lot of volatility,
Speaker 1: but I think, you know, the losses that you saw
Speaker 1: among head funds probably weren't as bad as they would
Speaker 1: have been otherwise. Another interesting thing to note, and we
Speaker 1: you know, we talked about this a lot. There really
Speaker 1: isn't that much of the kind of super crowded short volatility,
Speaker 1: short tail risk, tail risk selling kind of stuff out
Speaker 1: there that there was, like in twenty nineteen twenty twenty
Speaker 1: for the pandemic. So you didn't see that those kind
Speaker 1: of fireworks right there. Weren't like hedge funds getting liquidated
Speaker 1: and people getting carried out in body bags and big
Speaker 1: auctions of all their positions making markets go crazy. You
Speaker 1: just didn't really have that kind of stuff. What you
Speaker 1: had was a pretty fundamentally driven, you know, orderly sell off,
Speaker 1: followed by you know, goofy rallies back and forth on
Speaker 1: Trump tweets and what's he going to do and all
Speaker 1: this kind of thing. But it was really, I think
Speaker 1: much more about about you know, fundamentals of expectations of
Speaker 1: what is policy really actually going to be and how
Speaker 1: much does that matter for the economy as opposed to
Speaker 1: like technical positioning hedge fund blow ups and people getting steamrolled.
Speaker 3: Yeah, I feel like the positioning point is really important
Speaker 3: and is probably one of the reasons like we had,
Speaker 3: I'm doing air quotes here, but that orderly sell off
Speaker 3: versus something super super chaotic. But that said, I mean
Speaker 3: we're talking about it being a fun market. I feel
Speaker 3: like I have to make the obvious disclaimer, which is,
Speaker 3: I'm sure it's very fun if you're in options and
Speaker 3: in volatility trading. But if you're in the sort of
Speaker 3: long term buy and hold game, this feels almost like
Speaker 3: an impossible environment to navigate, right, Like one day we're
Speaker 3: up two or three percent, the next day we're down
Speaker 3: two or three percent. Everything is riding on like what
Speaker 3: Scott Besson says, what Lutnik chooses to say, and god knows,
Speaker 3: you know what Trump is going to say in his
Speaker 3: latest press conference very much so.
Speaker 1: And you know, and in today too, it's like, well,
Speaker 1: yesterday we were up three point two percent and then
Speaker 1: there was a bunch of walking back of the unilateral
Speaker 1: terra production position, and then we sold off, you know,
Speaker 1: halfway back to flat almost immediately. I think there were
Speaker 1: I think someone.
Speaker 4: By the way, we're recording this April twenty fourth, it's
Speaker 4: ten oh eight am.
Speaker 2: Every time we have a Yesterday.
Speaker 1: Or something that's right, very good point, keep going yeap,
Speaker 1: So we had I think just this morning I saw
Speaker 1: an article I think Alexander wrote it at Bloomberg saying,
Speaker 1: you know, we're in a traders are trying to trade
Speaker 1: Trump tweet's market, and that's really hard. You know. I
Speaker 1: think that generally speaking, anybody that you talk to the
Speaker 1: success rate of sitting there at your computer and looking
Speaker 1: at what just got tweeted or what article just came out,
Speaker 1: and then sort of doing trades and making money, Like
Speaker 1: nobody makes money at that. It's incredibly difficult, right, It's
Speaker 1: a very choppy market. The people who do, of course,
Speaker 1: as you point it out, volatility traders have a very
Speaker 1: non consensus view on what's fun and what's not right.
Speaker 1: We love this, but yeah, I think that's.
Speaker 3: Your definitions of fun may vary.
Speaker 1: Exactly back to the renaissance fair point.
Speaker 4: So, I thought there was a very interesting point about
Speaker 4: deep seek, which is that what it really obliterated were
Speaker 4: the market neutral factors that had been working on. That
Speaker 4: is very interesting, And of course, you know the pod
Speaker 4: shops that we're always talking about, their game is to
Speaker 4: find those market neutral and then this was a thing
Speaker 4: that just rearranged everything.
Speaker 2: You know, when you're on.
Speaker 4: Before you talk about the TikTok option influencers who are
Speaker 4: always looking at various Greek letters like alpha, beta, Gamma, delta,
Speaker 4: Epsilon's zeta, ata, theta iota, Kappa, lambdamu when oopsilon is
Speaker 4: trading way out there on some extreme all these trades
Speaker 4: are premised on some sort of mean reversion that there
Speaker 4: isn't a dislocation, and then eventually a normal returns, right.
Speaker 4: And it may go further out and the sigma and
Speaker 4: the row may get further blown out, but eventually they
Speaker 4: come back to normal. How much of this is like
Speaker 4: a crisis of people really don't know that some sort
Speaker 4: of fundamental economic mean reversion is coming.
Speaker 1: Yeah, I think that's something really important to that, right.
Speaker 1: I think that people are very conditioned in this market
Speaker 1: of the last many many years, really post credit crisis, right,
Speaker 1: that that sort of nothing ever happens. We talk about
Speaker 1: this a lot, right, but that any kind of sell
Speaker 1: off will be immediately bought, It'll immediately come back, any
Speaker 1: kind of all spike will get sold. And you know,
Speaker 1: even in the pandemic, obviously people got run over on
Speaker 1: that view, but we still did come back. It's just
Speaker 1: that it got really crazy for like a month, right, Yeah.
Speaker 1: And I think this feels very different, where this isn't
Speaker 1: a flat in the pan with a technical squeeze and
Speaker 1: a big explosion of stuff like this is. You know,
Speaker 1: there are the real fundamental issues here, which is that
Speaker 1: you know, the US government is out there doing totally
Speaker 1: crazy economic policy that every economist in the world for
Speaker 1: the most part, will tell you is totally crazy. And
Speaker 1: they're also changing the goalposts day to day on what
Speaker 1: exactly that policy is going to be, and they've really
Speaker 1: eroded the market's confidence that they kind of know what
Speaker 1: they're doing, not only on tariffs, but I think on
Speaker 1: everything else now, right, I think that one of the
Speaker 1: most important things that Liberation Day did was, you know,
Speaker 1: take the market, which really up to that point, I
Speaker 1: think you have to say, kind of believed that the
Speaker 1: tariffs thing was like this four dimensional chess strategy and
Speaker 1: negotiation and everything else crazy that Trump was saying, you
Speaker 1: kind of discount, right, because he's not really going to
Speaker 1: do that. He's got a plan. And really the market
Speaker 1: really had to re rate that whole expectations of how
Speaker 1: to interpret everything that Trump and his administration say or
Speaker 1: say they're going to do, because gosh, they said they
Speaker 1: were going to do this crazy tariffs thing and then
Speaker 1: they did it five times crazier than everybody thought they
Speaker 1: were going to do. Yeah, right, and not just crazier
Speaker 1: in terms of levels of tariffs, but in terms of
Speaker 1: like the clownishness of implementation, right that like the chat
Speaker 1: GBT night before tariff table with the Penguin Islands and
Speaker 1: like the whole thing. Right, So then when Trump is
Speaker 1: out there saying, Okay, tomorrow, you know, next week we're
Speaker 1: going to deport thirty million immigrants or like whatever crazy
Speaker 1: thing that he says, the market kind of has to
Speaker 1: take that more seriously now, right, or at least question
Speaker 1: like what are the possible implications? And so I think
Speaker 1: it's a very different environment going forward, right, It's unlikely
Speaker 1: that that's going to just change and that he's going
Speaker 1: to suddenly turn into like a really serious guy.
Speaker 3: So, speaking of things being weird, and there are any
Speaker 3: number of weird things that we could choose to talk
Speaker 3: about here, but like one of the weirdest to me
Speaker 3: has been what's been going on in equity volatility. So
Speaker 3: we've had a very big gap between the VIX, which
Speaker 3: is implied volatility versus realized volatility, which you know, like
Speaker 3: maybe explain the difference to us just to begin with,
Speaker 3: and like why we've seen that gap really developed?
Speaker 1: Sure? Absolutely, So the VIX is up is something that
Speaker 1: everybody talks about, but not everybody really thinks about exactly
Speaker 1: what it is, right, it's the fear index. But what
Speaker 1: it is is it's a level of what's called implied volatility.
Speaker 1: So in some sense you could think of it as
Speaker 1: the market's forecast for realized volatility over the next month
Speaker 1: based on option prices. It's a little bit more nuanced, though,
Speaker 1: because calculation that they chose for a VIX isn't regular volatility.
Speaker 1: It's something called variance, which is volatility squared but then
Speaker 1: normalized back into units that are volatility. And the distinction
Speaker 1: there is that it's so the level of VIX is
Speaker 1: the level of what's called the variance swap, and a
Speaker 1: variant swap pays you, as a volatility trader who buys
Speaker 1: it proportional to the square of volatility. And so what
Speaker 1: that means is if volatility doubles, you actually make a
Speaker 1: whole lot more money, or if volatility goes up by
Speaker 1: four times, you make a ridiculously amount more money. Yea's right,
Speaker 1: there's a big slope to it, and so you have
Speaker 1: to pay a big premium to buy a variant swap
Speaker 1: relative to what you would pay to just buy volatility.
Speaker 1: And so when you compare the VIX to realize volatility
Speaker 1: or how much markets are moving on average. On average,
Speaker 1: there should be an extra premium there. It's not just
Speaker 1: direct comparable. Now to Tracy's point, though, realized volatility recently
Speaker 1: has actually been generally much higher than like the average
Speaker 1: level of the VIX. Now, the VIX did spike into
Speaker 1: the fifties kind of briefly, but it's mostly come back
Speaker 1: down into like the thirties and high twenties. But yet
Speaker 1: markets are often moving you know, three percent in a
Speaker 1: day or four or five percent in a day, which
Speaker 1: implies a much higher level of implied volatility.
Speaker 3: It's a crazy chart. So you can you can chart
Speaker 3: on the Bloomberg on your handy Bloomberg terminal, like the
Speaker 3: Gamma index versus the VIX. You could see that like
Speaker 3: the jaws kind of opening over the past few weeks.
Speaker 1: Yeah, very much so. And again that's really reflects a
Speaker 1: you know, aggressive bet on the part of market participants
Speaker 1: that realized volatility has been high, but it's going to
Speaker 1: be lower over the next month than it was, and
Speaker 1: it's and actually the degree to which you see that
Speaker 1: in your chart is understated because of that variant swap effect.
Speaker 1: You're actually not really even comparing the right number with
Speaker 1: the right number to compare would be like at the
Speaker 1: money implied ball, which you can also plot in Bloomberg.
Speaker 3: Oh what's the ticker for that?
Speaker 1: So you would just do SPX index and then you
Speaker 1: would do there's going to be a field for it,
Speaker 1: which would be like one month, one mt h something
Speaker 1: something field.
Speaker 3: But yeah, oh awesome, Yes, this is very useful.
Speaker 1: Thank you. There you go, And that guy will usually
Speaker 1: be anywhere between say three and eight or ten points
Speaker 1: below vix, depending on the level of X. So with
Speaker 1: VIX at fifty, that's probably at forty or thirty eight or.
Speaker 3: Something like that. You know.
Speaker 4: Tracy and I we put on events, trivia events, et cetera.
Speaker 4: One of the dreams that we have though, is a
Speaker 4: Bloomberg terminal live company competition terminal Olympics where we get
Speaker 4: like twenty traders and they're all seated at a terminal
Speaker 4: so good calculate actually, and they always flashes on a
Speaker 4: screen who gets the answer first?
Speaker 2: Like, how well do you know?
Speaker 1: So that would be such a good tea.
Speaker 4: I think we think Ben for coming on if nothing else,
Speaker 4: to give us quotes and news about functions for when.
Speaker 2: We eventually put this on.
Speaker 4: I don't follow like you know, the Wolf of Gamma
Speaker 4: or whatever on TikTok you've seen anything good?
Speaker 2: What are they saying they got?
Speaker 1: They all got real quiet?
Speaker 2: What are you seeing out there? You got any good?
Speaker 2: Like tweets or you know sellers or whatever.
Speaker 1: Seriously, so as you know, like on a regular basis
Speaker 1: in normal environments, like everybody is tagging me in ridiculous
Speaker 1: like tweets or Instagram posts or whatever that that these
Speaker 1: kind of option selling influencers are making, you know, the
Speaker 1: coal options grind guy and like all these people. And
Speaker 1: as of you know, a couple of weeks ago, there's
Speaker 1: just absolute crickets from that community because the types of
Speaker 1: trades that you know, they they advocate, as we talked
Speaker 1: about last time, you know, they make a little bit
Speaker 1: of money on average, you know, for a while, and
Speaker 1: then they give it all back or twice as much
Speaker 1: back when something like this happens. And so there's not
Speaker 1: a whole lot of talking coming from that crowd, and
Speaker 1: you see it reflected. You know, obviously you can't see
Speaker 1: what you know is how happening to those highly over
Speaker 1: leveraged individuals that are unfortunately following that kind of advice.
Speaker 1: You know, you can look at how well like covered
Speaker 1: call ETFs are performing relative to just the underlying and
Speaker 1: things like that to get a little bit of of
Speaker 1: a little bit of a sense. You know, look at
Speaker 1: the mstr covered call ETF for example, right, And it's
Speaker 1: just bad because the worst possible environment for those kind
Speaker 1: of strategies is when you have a sharp spike in
Speaker 1: realized volatility, and especially if there's like a lot of
Speaker 1: chop and back and forth, you know, mean reversion, right,
Speaker 1: because you'll have a situation where where they're selling like
Speaker 1: these weekly options, right, and you have a really big
Speaker 1: sell off for a week, they lose a bunch of
Speaker 1: money on their puts, and then they sell some calls
Speaker 1: and you have the big rally back, and then they
Speaker 1: lose their money on their calls. And again, none of
Speaker 1: this is like something that they explain to their followers.
Speaker 1: They just sort of tell their followers that the income
Speaker 1: of the strategy is like the option premium that they sold,
Speaker 1: and they don't conceptualize the possibility that you can actually
Speaker 1: lose money when you sell the option.
Speaker 4: Tracy, every once in a while, I'm reminded that we
Speaker 4: exist in world where there's like fourteen ETFs.
Speaker 2: That are based on various doing things.
Speaker 4: Micro strategy is crazy amazing anyway, Sorry, well, also.
Speaker 3: I'm still blown away by the fact that micro Strategy
Speaker 3: also calls out the volatility and its share price in
Speaker 3: its earnings call as like a selling point.
Speaker 1: Look how volatile we were in circuits and it's beautiful, right,
Speaker 1: But I mean Sailor is very smart, right, so Sailor
Speaker 1: understands all this stuff perfectly. If you if you can
Speaker 1: run a really really high volatility company, yes you can.
Speaker 1: It means hedge funds love your convertible bonds and will
Speaker 1: pay anything to get your convertible bonds. Yeah, it makes
Speaker 1: your actually makes your credit cheaper.
Speaker 3: And I gotta say, if people want to hear more
Speaker 3: about this, we did record a lots more with Matt Leveeh.
Speaker 1: It was a great episode.
Speaker 3: God, it feels like so long. It feels like it
Speaker 3: was two years.
Speaker 1: We get the.
Speaker 4: Luxury of talking about micro strategy for a whole episode once.
Speaker 1: Pretty amazing.
Speaker 3: I feel like this is kind of the secret of
Speaker 3: volatility and options trading, which is like you think that
Speaker 3: a lot of these guys, a lot of these influencers
Speaker 3: would really enjoy this particular trading environment, but so much
Speaker 3: of it is based on that mean reversion that Joe
Speaker 3: pointing out that a lot of stuff just blows up
Speaker 3: when you finally get volatility right, it really does.
Speaker 1: Wait not to come back to this, but MSTR. But
Speaker 1: did you see that there is going to be MSTR
Speaker 1: for Solana?
Speaker 2: Yeah? Yeah, and they're yes, they're trying to I was.
Speaker 4: I actually appeered on a crypto podcast recently and I
Speaker 4: was like, I'm tapping out this.
Speaker 2: I don't understand MSDR.
Speaker 4: But now there's a bunch of like copycats, and the
Speaker 4: question is can anyone really repeat this?
Speaker 3: Yeah?
Speaker 1: Yeah, but GSR just led a big round and to upa.
Speaker 2: I just have to read these. Sorry, I have one
Speaker 2: more question, but I just before I do.
Speaker 4: Here's some of the ETFs Defiant daily target two x
Speaker 4: long MSTR ETF yield max MSTR Option income Strategy ETF
Speaker 4: t REX two two x long MSTR daily target ETF
Speaker 4: bit wise MSTR income Strategy. Oh there's another one st
Speaker 4: key day, one hundred percent MSTR and one hundred percent
Speaker 4: coin TF. So I guess it makes us some coinbase
Speaker 4: in there.
Speaker 2: There's a lot more. I just had to read those
Speaker 2: in last question for me, Like, if you're.
Speaker 4: A long only investor, just a normal whatever investors I am,
Speaker 4: you know you have two choices I think, which is
Speaker 4: one the hope and praise strategy, which I always actually
Speaker 4: think is very legitimate because that does tend to work
Speaker 4: out over a long enough timeline. Or they're like, oh,
Speaker 4: I really need to think about diversification strategy or something
Speaker 4: like that. Okay, in your world, don't you still have
Speaker 4: to have some sort of view because if the question
Speaker 4: is do some of these Greek letters snap back into
Speaker 4: place or there's a gap between where this Greek letter
Speaker 4: and this Greek letter are pricing to make money, don't
Speaker 4: you still need.
Speaker 2: To have a view like I do.
Speaker 1: That's a great question. So there's a couple of different
Speaker 1: important things here. There are different types of trades in
Speaker 1: the derivatives world that are driven by dislocations. Some of
Speaker 1: those trades make money on realized dynamics and markets and
Speaker 1: don't rely on some implied Greek coming back into Okay, right,
Speaker 1: so Tracy was talking about, you know, realized volatility and
Speaker 1: implied volatility. This is like a simple dumb example, but
Speaker 1: just suppose that implied volatility was just always way too low,
Speaker 1: and realize volatiley was way higher for short term options.
Speaker 1: You would just buy short term options and hedge them
Speaker 1: all the time, and you would just make money constantly. Yeah,
Speaker 1: and you wouldn't need that to ever change. Wouldn't ever
Speaker 1: want that to change. You wouldn't ever want that dislocation
Speaker 1: to go away. Okay. So there are some things like
Speaker 1: that that we can make money based on a dislocation
Speaker 1: but without requiring the dislocation to close. And then there
Speaker 1: are other things where exactly as you point out, you're
Speaker 1: trading an implied dislocation and you're going to only make
Speaker 1: money when it reverts. And for things like that, you know,
Speaker 1: we really have to think hard about, Okay, where is
Speaker 1: this dislocation coming from? What flows are driving it? Are
Speaker 1: those flows that are going to be persistent and not
Speaker 1: go away and it's unlikely that those dislocations close. Are
Speaker 1: there fundamentals that actually cause that dislocation to stay there
Speaker 1: even if it doesn't really make sense? Or is this
Speaker 1: something that is being driven by temporary supply and demand
Speaker 1: dynamics in the market and you understand what might push
Speaker 1: it back over what kind of time horizon? And the
Speaker 1: latter is an interesting trade. The former really isn't, And
Speaker 1: you actually have to think very hard about that. You
Speaker 1: can't just look at the level of the Wazoo parameter
Speaker 1: on a screen and sort of say, which, by the way,
Speaker 1: is the made up parameter that exotic derivatives traders you know,
Speaker 1: use to claim why you're losing money on your trade
Speaker 1: with them.
Speaker 3: Man, I'm always looking at those parameters. That's a big mistake. Okay,
Speaker 3: Well I have a very simplistic question based on this conversation.
Speaker 3: But okay, implied volatility down quite a bit, realize volatility
Speaker 3: is still up quite a bit. Is buying vall that
Speaker 3: sort of hedging protection? Is that cheap at the moment? Like?
Speaker 3: Would you be a buyer at these levels? Basically?
Speaker 1: Yeah, if you believe as I think I do, that
Speaker 1: Trump two point zero is not a low volatility president,
Speaker 1: right that one way or another, Right, this is different
Speaker 1: And that doesn't mean the world is going to end necessarily,
Speaker 1: but that this is not like a ten percent realized
Speaker 1: volatility market, and he doesn't want it that way, he
Speaker 1: doesn't like it that way. Then yeah, I think you
Speaker 1: have to look at when you look at the overall
Speaker 1: volatility landscape, there are a lot of things that are
Speaker 1: relatively cheap, and you know, in our core business we're
Speaker 1: absolute return. We're always looking for what's cheap and what's expensive,
Speaker 1: and you know, hedge trades and so forth. But we
Speaker 1: also do help big institutional investors with tail risk hedging
Speaker 1: and with things that are outright defensive to protect their portfolios.
Speaker 1: And yeah, there's still lots and lots of opportunities for
Speaker 1: that because really in this market we talked about this
Speaker 1: a little bit, but the knee jerk reaction of most
Speaker 1: market participants is that when volatility goes up, they just
Speaker 1: think you have to sell it, and they do a
Speaker 1: lot of risk on trades in the volatility markets, which
Speaker 1: don't necessarily make sense, you know, from a risk reward perspective.
Speaker 1: Most of the time, they should just buy equities, to
Speaker 1: be honest, if they want to be bullish.
Speaker 3: Actually, you just reminded me. I mean, one of the
Speaker 3: other things we just saw was like this huge contraction
Speaker 3: in risk appetite across the entire financial industry basically around
Speaker 3: April second, that Liberation day. Who is selling vall at
Speaker 3: the moment, and have you seen continued appetite to sell
Speaker 3: volatility in the current environment, yeah, no very much.
Speaker 1: So, so one thing that you can always tell is
Speaker 1: when you get a sell off like this and the
Speaker 1: VIC spikes a lot. So VIX went to a little
Speaker 1: over fifty. Look at where the front month Vick's future
Speaker 1: is trading, and that tells you whether people are buying
Speaker 1: or selling ball. So the front month VIX future had
Speaker 1: you know, five or six days left to maturity early
Speaker 1: after Liberation Day, and it was trading at you know,
Speaker 1: thirty two when the VIX was fifty, right, So it
Speaker 1: was implying massive speed of normalization and mean reversion because
Speaker 1: everybody's selling it. And the VIX future is the best
Speaker 1: thing to look at because it's the tourist instrument, right,
Speaker 1: So you know, vall traders, you know, trade the VIX
Speaker 1: inasmuch as there's dislocations in it. But if you're just
Speaker 1: a regular equity guy and you think ball is too high,
Speaker 1: you don't go trade options. Options are too much work.
Speaker 1: VIX is really easy, right because you can trade the ETFs,
Speaker 1: you can trade the futures. You don't have to think
Speaker 1: about like the gamma and the you know, the baga
Speaker 1: and all that stuff, and so there's an overwhelming appetite
Speaker 1: to sell ball on ball spikes from a lot of
Speaker 1: parts of the hedge fund community, from tourists, from volatility
Speaker 1: tourists within the hedge fund community, and from retail investors. Also,
Speaker 1: retail investors are very much dip buyers and ball sellers
Speaker 1: on spikes.
Speaker 4: Valdi tourists would be a good name for a trivia
Speaker 4: team one of our trivia nights.
Speaker 2: I'm a Volatility that is a good A good name,
Speaker 2: be a fun one.
Speaker 4: Lots More is produced by Carmen Rodriguez and dash Ol Bennett,
Speaker 4: with help from Moses Onam and kil Brooks.
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