welcome back to the bear trap podcast my name is John Kirby my co-host is Vic all charting credits as always come out to awk I hope you guys like this one please subscribe if you haven't already and yes in the next one uh yeah you there yes um just had someone right at the beginning of this flush the toilet right next to me so if that's what you're hearing no but we're basically just talking about uh Kevin Carson and uh right because you guys know we we look at his uh podcast his stuff a lot he sort of is the kind of like founder in some way like from a social media perspective of looking at Geck stuff looking at um um you know looking at the Vault space for retail Traders and the theory that that we're kind of espousing is that the it's not or at least Vic was making the really excellent point that it may not be out of the goodness of his heart that he's doing that he's making all this information public and you just said it was baiting okay okay I did just say it was big um yeah but I said it wasn't out of the goodness or I think some of it is but I think I think he's cold-hearted uh you know businessman the way he's going about it just from the stuff that I've heard look at the out there putting it out there is baiting but his predictions usually come true so is it more of like a self-fulfilling prophecy he's putting it out there I don't know dude it's the same it's the same as what Hindenburg research does it's the same as what a short seller does it's just a it's just a really fancy method because right think about it right you get short a ton of stock then you publish your short sellers report everybody realizes that the stock is [ __ ] right which is what just happened in the Square um or a Donnie group or whatever damn thing tanks you make a ton of money okay what gem does which is different and actually kind of clever is he says on I remember a while back he was like on this Tuesday the Market's going to turn around or he says like um right oh don't don't short the market during this period and then what we've been noticing and I talked to talks about this all the time is that the window moves around um in the sense of like a lot of times he'll make a prediction at first the predictions were right on the money and lately what's been happening is um it's always a couple days early a couple days late and so if you just look at the gecks if you're doing it yourself you'll get the timing right which I've done for a couple Cycles not even knowing because like I wouldn't even listen to Gem and then I'd just be like you know I just sort of start to load up when the price has looked good and then I'd catch it but then I'd go back and like listen to gems predictions and be like oh damn he he said that this was going to start you know two or three days later than it actually did um and then like I remember that I wish I had the dates in my head but um and then if you had actually gotten in when he said to get it you would have made like one and a half percent or something like that instead of like seven percent or something like that in terms of the move on so do you think he he is actually front running his own call that's exactly what I think he's going hey it's on a Tuesday and then he's loading up the Friday at the lows 100 yeah and it makes it makes perfect sense to do something like that because um if because if you know that the supportive flows are there right um and and then you make a call about the supportive flows and you know that everybody else is going to try to front run the supportive flows then you can front run the front running of the support of flows and then we're in 3D chest again I was thinking about that exact thing yesterday I'm going you know all I'm all we're doing over here at the bear trap for the most part is literally just trying to find out what the dealer flows are up to and just ride the wave that I think there's a lot of people doing that right so it's like not anything different in a way it's maybe just a more precise uh scientific way of doing it I guess than just writing like a 10 EMA or something you know what I'm saying because isn't that what we're doing we're just kind of yeah just trying to figure out where the dealer flows are and just be on that side of the market yeah or I mean it kind of kind of depends right like if you know like in this past period where it's like the dealer flows are kind of like meh right and then for sure we were talking about it we're like okay it's just gonna ping-pong between what do we say 95 400 394. we said yeah we said 390 400 that's what I texted you last night oh we did after this that podcast we did last week we basically said yeah first chart we put up I think was just the Spy oi and we just said yeah it just looks like 400 to 390. yeah you can literally just buy one of those Levels Close Your Eyes and you know and it ended up working out almost literally to the T did I make any money off of it Vic no nothing well yeah me neither I mean I was until yesterday but yesterday oh yeah yesterday I actually I actually did well yesterday I mean I didn't really do anything I just I just bought you know how I feel like I was posting in the Discord I was like yeah I want to do a risk reversal on the XLF and then tux message me and he's like that is the last thing on Earth that I would do right now um and and I did it pre-fomc which was a very bad idea took it off right before the conference and then yesterday at 390 I put it back on uh so you bought XLF yes I bought yeah I bought like actually two oh really yeah but I bought some some calls for like three weeks out or something I didn't buy calls I literally just bought I bought I actually ended up buying shares yeah I think it's a good idea I think so we'll talk about that so that's something we should talk about is how this uh you know the the thanks the bank Vol that's in the market right now I think is going to come out oh yeah it's gonna come out and then and then Tech is gonna have to deflate at some point and they're gonna just like it's gonna move the other way well then you think about okay so for how long has have folks been piling into Tech because of my guess and it's just a rotation from Banks you know because Tech's not really at I don't know I don't know you we're going to talk about that a little bit more because Tech's not really exposed that much to the bank crisis No in fact it's actually the banking crisis is bullish for tuck but we can uh gold ball comes out yeah let's go let me Circle back and finish the job discussion because I want to make another like a final or a point I don't know caveat whatever which is I've had another discussion with a buddy and which we were talking about it from a completely different point of view so you remember the call that he made a while back where he was like yeah buy a long duration gold calls yeah oh yeah which was a great call um and then I was talking to my buddy and I was like well is he actually trading that and and you could also say well he's probably not trading it because if you think about it from a risk reward perspective like you were saying the risk reward for him is publicity and getting more people into his fund the amount of money that you can make reliably by getting more people into your fund is from a risk-adjusted perspective so much better than actually trading anything yeah well okay I know I get what you're saying it's like you think of it Kathy Wood she gets paid no matter how many billions she's losing yeah so she's got money coming in it doesn't really matter she could buy and sell you know Tesla all day long and it doesn't really matter so is it the same thing as that where it's just hey I just want to grow the fund and but you know the fund's got to make money too so you don't yeah it's fun is is taking advantage and all he ever talks about is taking advantage of the probability distribution right certain parts of the distribution and he talks about gold it was essentially the fall trade of the last 20 years where people were buying it to hedge and it never worked and so now they're not so that's why he says the gold calls were such a good play because you know they're just so cheap and nobody's nobody's in it anymore no I don't understand crazy I think it's also in his favor right to be saying things that he he believes to be true it's just a question of if let's think about this from a purely from a Trader perspective which is that it's not binary right like there's he's going to benefit from some diversification right the best RR is going to be from getting his his best RR trade is going to be getting more people getting more money into his fund like the Kathy Wood thing that you were talking about but it doesn't mean that he shouldn't diversify it doesn't mean that he shouldn't also trade to some extent but probably less than we think he does right I agree and this goes back to something we always talk about how being an analyst versus being a Trader or almost two different things and he made it on that side of it right now he's just the analyst yeah and he's just saying hey this is a great play but he doesn't actually take the trade himself or you know maybe his his Traders and his fund are actually just doing doing it or doing some version of it or whatever exactly like at that point like if you're I mean if you're like a uh whatever a how would you call it an over 9 000 level copy uh then uh are you taking your trades yourself uh you're you're on the phone you're talking to people you're like hey man do this and they're like all right sounds good yeah how much nicer would it be if uh if you had some some situation set up like that we've talked about that before I think uh yeah we talked about the designated driver idea that's what I'm calling it now right where you have uh one buddy who's not trading in your group of Traders and that buddy is the one doing the objective analysis yeah and then everybody else you just you just execute the trades yeah people have been asking um about uh you know us making videos of like actual trading actionable ideas and I'm not opposed to that like I'm totally down to do it I think I think what everybody's gonna find though is that um trading is really really boring like the actual mechanics of it yeah it is um so it's almost like like I'm happy to make that content man it's easy to make but I don't I mean well I think you should I think we should uh drip some of that in here because people just need to have an idea of how we're Tate going from the analysis and connecting it to like a real live real world situation like you know and everybody's gonna be different every account size is different so that's why you can't like go oh well he just did this so I'm going to copy it you can't do that it's just not possible to copy it but it could give you an idea okay John likes to sell sell puts and in this type of situation well it doesn't mean you go sell the puts that he's selling or that you go sell puts go sell credit spreads or yeah or buy calls or just go buy shares I mean everything's expressed in a different way that's a good point like in a normal If This Were sort of a normal I don't know environment I probably wouldn't have bought shares I probably would have sold puts on the XLF and tried to collect that premium but to be honest I'm like damn the XLF actually looked pretty good at these prices I wouldn't mind holding this I want the dividend um I'm thinking you know about the next five ten years um so it's a completely different okay so going back to selling puts in it too um is your risk higher or lower if everything goes bust that's the question if they don't fix the banking situation oh so a small chance that happens so yes I actually took more Risk by buying the shares buying the shares yeah yeah and and it's um but there's a reason for it so um this is actually kind of a weird discussion because there's a lot of thinking that actually goes into this like seemingly really simple decision um so if I sell the puts right I'm essentially agreeing to buy the XLF at a lower price than it's currently trading at hopefully right um actually necessarily otherwise there'd be a an inefficiency but um the the issue with that is like um uh let's say that the XLF like completely bounces right it goes like ballistic to the upside then all of a sudden all I'm gonna do is I'm going to collect that premium and I'll have missed out on my shot to buy it um so if I don't do a risk reversal in other words if I don't buy calls on it um at the same time as I'm selling the puts then I'll miss out on that um so my original trade on the Excel if it's a risk reversal but then I think that there's this other scenario which is also quite probable which is the XLF does nothing right it just sits in the same place um for a long time like we're talking months here which is totally possible um and if that happens then all of a sudden you're risk reversal you're gonna make no money on it um and yeah it's like it's like there's no real point to having it because it's essentially just neutral uh and you're still having the risk of the XL of taking on you and you're not holding the shares for that protective period of time which would enable you to collect the dividends sooner rather than later um so yeah yeah I'd go what you're saying there there are scenarios in which buying shares make more sense than selling puts um there aren't a lot of scenarios like that but they happen every once in a while okay so where where and why did you decide to buy it uh to decide to buy it at this level like that may be a question somebody's really trying to get into is why you decided to buy why did you execute the trade like you did so my thinking is uh uh and this is kind of like very back of the envelopes I'm thinking but either right the banking crisis mini banking crisis is over um and this thing is gonna kind of either it's like slowly gonna Trend back up again or whatever I mean it's uh it's probably like one one and a half standard deviations on a weekly 10 period or something like that so it's it's quite low right now in terms of um you know what it's been priced at historically um or the banking crisis is going to get worse and this thing is just going to die completely um that's why I actually only bought half so I'm entering into a position and I know that I actually want double what I currently purchased um and so this seemed like a really good midpoint to get some um and in terms of like where I bought it specifically right I bought it at spy 390 just because we know that that's a really really significant level and there's some sector rotation going on right where like you said we're talking about everybody's rotating into Tech right now and then that I think that that's going to start to swing the other way so um I'm very happy to buy the XLF at this level because it it doesn't seem it seems like either it's going to fall off a cliff or it has to go back and that's actually where most of the opportunities are um it's where people are so uncomfortable that you know nobody wants nobody wants it all right um all right let's get into this SKU chart here yeah sorry I'll probably bring some of those other thoughts that's okay we'll probably bring some of those other thoughts into the discussion of these actual charts and maybe how we would take some trades or kind of how it ended up playing out this right here I believe when was this done this was done yesterday at 7 30. on the 24th yeah and I did I wanted to bring this up and then the pre-market spy chart and so I always like doing this every once in a while just to see what the you know what they updated oi skus and gexes looked like before the market and then how the market played out it's kind of exercise to see like oh wow if I ever see this profile again or if I see the situation again then I have a good idea of what it's going to do for the day but who's exposed or whatever so uh in this situation here I mean I'm just I I'm looking at this View and I'm going you know it's it's looking like probably an IV Crush coming in because there's no events and I always think about you know what is what could be the Catalyst that caused the the skew basically you know highlight whether that SKU is for Friday yeah and and what would cause that to you know pull away from sort of the mean uh IV level which is like around 20 22 or whatever you know is there something that could cause it if there's not any events or you know anything like that and I'm just going to assume that Ivy's gonna come down okay if Ivy comes down what's going to happen to you know say I'm in a put position and Ivy comes down what's going to happen to it yeah you're gonna have to bail well you're gonna you're gonna take pressure right it doesn't mean you bail I mean you don't bail right away and that's something I've learned is it takes a long time to get people it feels like people folks hold on to their positions longer when they're in a loss and so and I think that's just a psychologist psychological thing and a lot of times puts are held as insurance anyways so you kind of already expect them to go to zero and I used to hear this a lot with uh in another chat room is he would this guy would buy puts and hope they go to zero that was the point because he was super long on the market and he was like I'm buying these as insurance I hope they go to zero and I think a large majority because we always think of all these Bears out there and we kind of make fun of bears because they're always one of the market to crash and I always think of it as like it's just an insurance contract and people are just hoping it goes to zero so if we if you look at it from that standpoint they're gonna just hold on to the contract so they're not bailing but what's happening to the dealer you know the dealer is going to have to start buying back those shorts that he's hedged with right but when does that start happening I I agree and I kind of but like with uh uh I don't know with a little bit of an asterisk because the thing is like what we've seen about the market too when we're reading the sketch charts and I know you know this also but like it's that the um it's almost as if the puts move the market at least in these Cycles more than anything else so it's what's weird about it is if you talk about it like an insurance policy then people get the impression that it's not the thing that is performing the uh like the magic right yeah okay hold on I you know the 100 and the reason I said that was just that people hold on to them longer and in that so okay IV comes down well okay well my puts just die but you know I I'm super long the market on something else I don't really care about the put and the only the only thing that moves it is those dealers that were short on the other side yeah because that's all the flow that's in the market right now go to the next chart go to the Spy all right no no it's all good it's the gecks the gex one yeah the next yeah the guest one I think this is the can you make sure it's the same no no that's the that's the evening one and then this is the one yeah there you go okay oh that one's so clear it's so clear right because uh all right so we got a lot of people essentially a lot of gamma exposure uh to the downside and we're right at our level this 390 that we talked about last week being essentially the range low for the week based on just really just an oi a simple oi picture and so uh you're really overloaded here and if IV comes down what are the hedging obligations of of the market makers into the skx exposure and there wouldn't be any right well or they they uh they get absolved of their hedging obligations so to speak exactly absolved over there that's a good way to put it so they don't need to hedge anymore and if they already had other positions that are coming into the market at the open uh those positions are you know essentially going to be underwater and the market maker the dealer flow is essentially just going to be just to buy the just just to unload their their shorts right they'll be buying you'd be selling into dealer positive dealer flow into a situation like this and I remember from the gets on Friday and I did actually look at that um it was 393 which was one of the biggest put strikes given where we were and so it was almost as if these 390s were decaying decaying decaying until they we hit 393 big reaction off of it but the fact of the 390 Decay was sufficiently strong that eventually we've popped 393 once we popped 393 games over so let's say you want to do a highly highly leveraged Futures trade or something like that you would actually expect the initial fade-off 393 wait for them to pop over then you'd get long and then you'd get along for like a dollar to you know 394 eventually and so what I had said in my morning video was that there is a chance they tried to push this down to like 386 387. um but I would think that would just be a bear trap and but they couldn't even get it really under 390 with any kind of force uh but it took a it took a while if you look at the chart of yesterday it took a while for those 390s to Decay enough to really cause the reaction and that was my point earlier the skew chart was that for some reason it takes the next part of trading these type of Geck shirts that I've learned is it just takes time for those for the Decay to happen or for the charm no you're you're before the banner and I mean it's because it's also I mean if we think about it right we know this because if you've ever tried holding a zero DTE option you should kind of wish you know I hope none of you have tried it but um you kind of know this intuitively that the Decay is sort of kind of it's kind of slow at the morning right it's I mean you can look at this if you guys have ever gone to zero dtes spy.com or zero dtspx.com you can look at the way that they Decay um and it's sort of slow in the morning um and then as you start to get into like 1 p.m 1 30 uh this is Eastern time obviously um they that decays accelerates really really quickly um and so it's almost exponential over the course of the day uh so if you are holding puts in the morning you're in less of a rush earlier on in the day to get out especially if Price is Right at your strike exactly yeah in fact in fact every time implied Vol pumps a little bit you're actually in the green it actually feels good you feel like you're fine and I don't know if that's just a I don't know how that how that works but it does it's sort of like a bait it's sort of like keeping them in keeping them interested in their position and then they finally just pull the rug on them yep and I actually um maybe just a Confluence of the charm and Vanna hitting at the same time I'm not really sure but it's probably what it is that's a really good that's a really good way to put it that actually makes a lot of sense Confluence of German Banner because there wasn't a lot of Vanna go back to the skew chart yeah if you think of Anna is simply just being that the IV effect on Delta um then there wasn't a lot there's the spread here between this yesterday and say Monday and then the kind of like the main IV here it wasn't very large and not to mention it's pretty left skewed as well so you know talking about you know being from the top left to the bottom right you know that's it's not that skew is a little bit angled too much yeah and so you're already gone well it's probably an IV Crush how bad is it it doesn't look like it's going to be that bad yeah because that spread's not that big so there's not going to be a lot of Vanna um so it's really going to be sort of a charm day if you think of it more of like a charm day then it's going to be a while for charm which is going to be the effect of time on the Deltas is going to be it you're going to have to wait a little bit longer for that move to come in dude that's a really beautiful way to put it I hadn't uh I hadn't thought about using these charts that way yeah okay so and well maybe we can get in more depth later with the way the way we I love how awk put these uh historical uh IVs or historical volatilities and IV volatility is on there yeah so those are really helpful just kind of markers but um all right go back to the Spy pre-market one yep so with those thoughts in mind we're going okay it's not really a van a day so much there's going to be a little bit it's more of a charm day then and then you look at the chart of spy do you have a chart of spy just like on a five minute uh you probably don't right away but yeah pull one of those up because the picture starts to come together you go wow uh it's like you literally the whole thing that happened yesterday was just killing the 390s and 385s also don't don't judge me on my training view guys I don't actually use it no it doesn't matter it's actually a naked chart it's perfectly fine go to a fight go to a five minute on that is it embarrassing if you're a Trader to have just like a chart with nothing on no actually it's a mark of Excellence isn't it that's what I was I was about to say like if you don't have anything on your chart I'm going all right it was a real Trader here these guys learned that the indicators don't mean anything all right so then okay so then you get this uh this Market move or whatever you want to call it where you get a double attempt lower so you get the gap down and you get the double attempt into those 390s and there wasn't a lot of IV right so they they created some IV from the morning session they created IV in the morning session and then what happened as soon as like that midpoint of the day hits It's just non-stop destruction right yeah and it wasn't even the pop of 393. now 393 could have been an important inflection point for everybody and you can see right where that 393 is yeah come on it was I was watching that because it was something right and they all thought it was the Fate it was like the fade and then they ran it right back up and it made perfect sense because it's like everybody was watching that level so of course of course of course yeah and it was yeah and you're right but it wasn't like um it wasn't the move actually came way earlier right at 390. on the set on the third attempt really lower and uh anyways the point was is you know it was a it was a charm day more than anything that was kind of what I'm trying to say and and there was no events to cause any IV well and that and that's why this action was so grinding and stuff right it's because there was no it was just the slow Decay over the course of the day and that you can see actually how it speeds up right at first it's sort of like halting and whatever and then as we get what is this it's literally yeah this is a good this is actually good 1pm was around here 130 it's right here and I would say that this whole section of the day was very very clear that's when you started to get a trending day and I started saying in the chat like uh it's a melt up it's a melt up you know because you can just tell them that you can tell in the uh in the tape sorry about that turn that off real quick no no worries um but you can you can tell in the day that uh it by the tape that it's really just market makers buying yeah it doesn't feel like there's any other volume except for just the market makers uh just buying the dips and they really just bought like the five EMA or 9 EMA the whole way up yeah well it's because there are those like there there are those hedging thresholds so to speak right where um basically what will happen is um you know this is a little bit of theory but I'm pretty confident in this it's like um let's say you get let's say you get that initial run up right you're all the way up here um all of a sudden they've already hedged out the entire inventory um so there's nobody to buy anymore so actually natural sellers come back into the market because this was clearly an unnatural move they come back in and the market moves down as they move down all the puts actually increase in value to some extent except that increase in value is not fast enough given that we're late enough in the day to offset charm um because because it's not fast enough then let's say that the beginning of this move is Market maker driven and then people start to think again I was like okay we're back to the trend they start to buy it back up same thing happens and it's just this like it's like this exchange right there's like the market maker Deltas come in and then people pick up on the momentum drive it too far Market maker responsibilities go away it comes back down same thing again again again just cycles and then that's what we get we get boom boom boom boom boom boom boom and now go to the end of day a skew or or gecks okay skew all right so uh can you guys hear that can you hear that background noise yeah but it's that's manageable out here and we like having to use my hand this is such a ghetto setup I'm right I'm literally right next to the heater so turned it off and it won't shut off I don't understand but new house okay it so now we're looking at the end of day SKU and and what happened to the SKU crushed right and even Monday got crushed yeah so uh all the positioning and I kind of just visualize this in my head but people were positioning for fomc uh sort of uh from Wednesday and Wednesday out right they're not everyone's just gonna buy puts just for for Wednesday that'd be silly and so a lot of the puts that were in the market were out into the future probably not that far but and that's kind of what I think of here it's just like these were Fridays and Mondays and and probably even Tuesdays puts uh decaying because IV and uh and then also um but you know what's interesting though as we look at that previous one look at that the morning skew versus this one did anything change be it with the future uh positioning as well you see the rest of this used out a little bit [Music] um so you see the angle of it sort of flattened out as a whole it did I'm just trying to figure out whether the net reduced or not because the center point here these get almost seems like these guys actually stayed elevated at around 22 plus five yeah the Tails go up on the right side the tails come down on the left side they all start trying to normalize a little bit with that that sort of main you know that June 30. yeah June 16. didn't move all that much um they're kind of at a floor as far as where the where the price is um right with that IV yeah so that's why I say those kind of come into play is they sort of act like a either upper and lower bounds or as a support resistance for for volatility uh which is an interesting way to look at it if you kind of have an idea of where the support and resistance for volatility this is where I came in talking about vix being sort of an RSI uh for SP demand for SPX puts as you can kind of find a sport and resistance for the volatility and it'll kind of give you an idea if there's going to be Vanna or if there's going to be or if you're at the lows four puts no that's a really that's a really good way of talking about it and I think it's better than there's some other metrics out there uh and they shall go unnamed which don't really make a lot of sense to me so it's like quite expensive services and this makes way more sense if you if you buy if you want to buy puts right you're wanting to buy them when it's beep okay yeah this is a simple Buy Low sell high so if you have an idea of when they're actually cheap from a market from a broad Market perspective then you don't really need to know if the market is actually going to go down to that strike those strikes are not wherever you're buying you just need to know if there's going to be an IV pump so it's sort of like a mega play I guess but okay go next to go to go to the final uh spy gex all right for for the closing and look where it closed uh goes right above that spy 395 yeah make it up next line and this is just for the 98 days so it's not it's showing you know all the gecks from Friday's already expired through here but it closed right in this little tiny Zone so I found that really interesting too it it's climbing back towards that ball trigger in a sense well it's like yeah yeah and it makes sense that we're gonna come up and touch it again I mean this is we haven't quite gotten into this yet but um I think we were kind of playing on it where it's like okay yeah um what is this this is the new SKU yeah um we're entering into a Zone I don't think I don't think we have a lot of events coming up right and it's it's sort of like a there's still a lot of all in the marketplace with not a lot of events and then there's sort of like actually pretty low if you think about it and I mean you can also measure this I mean look at where the hv20 is look at where the hv30 is they're pretty low here um iv30 IV 30s so yeah exponentially explain the difference between the two and why why you think it's slow okay what is HP so yeah HP is historical volatility for those of you that use toss uh sorry TOS um you can uh it's literally called the historical volatility on TOs and all it does is try to measure you know um the what is it the sigma of realized returns in the marketplace over some period of time um and uh it's basically like a measure of volatility that has actually happened versus implied volatility which is how much volatility is priced into the options uh and so whenever you see a huge discrepancy between historical and implied volatility it means that people who have been buying a lot of options have not been doing very well right option buyers have been doing very poorly so give us an example of what realized ball would be versus IV and typically IV is higher than than the actual HB right yeah I mean maybe maybe a decent example would be like okay like let's say that you bought you know you bought a call over here actually I did this so I can tell you guys exactly what happened um actually I bought it here I bought a an SPX 3970 zero DTE call uh right around here around 390 maybe around here um and I remember the thing was trading at uh around three dollars um after the spike it went up to six dollars um so when it was priced at three dollars and and actually the it was priced uh quite well because if you think about it that call being priced at three dollars um we closed the day at 39.70 71 I think on SPX so if you had held that call for the entirety of the day uh you would have actually lost a hundred dollars supposing that you bought it near low of day um so that's what that's how you know that like that's a one way of thinking about implied Vol being uh higher than realized or historical volatility um it's that uh the options are overpriced relative to how much they're going to pay out for you oh such a great example holy smoke suit that you just knocked it on the ballpark with that oh yeah well so what's what's interesting uh is that right that thing went all the way up to six dollars meaning that as soon as the market moved up here all of a sudden um we were pricing in uh I would say more I mean you could either save more volatility to the upside but also it's just that because the starting point for where we're going to move is higher the probability that we're going to hit 39.70 also was elevated so that's why the price of that option went up um but if you think about it um like that that option was still at six dollars here even more overpriced than before um so the um you know implied Vols remained overpriced throughout the day um even though the day went up because it didn't go up enough yeah perfect perfect yeah so most of the time the market is going to price in a bigger move than whatever what takes place which is why you always for the most part not always but see realized ball the ball the volatility that actually take place take place uh be lower than what the market was predicting yeah um so it's an assumption you should build into the model that whatever you're using if you're going to use this this gex idea or use probabilities of skew or IV uh is always just understand that whatever the IV is it's probably not you're gonna move that much yeah yeah it may change that picture may change but I you know what's interesting though is right now if you look at that SKU based you know based on this conversation um if you look at the skew you can see the the ID and the historical sort of in the same ballpark um it's still holding true essentially that you know at least for the last 30 20 and 60 uh they're about the same like 20 18 something like that yeah I think uh let me see IV HP H20 yeah it got it got substantially closer um it's kind of this there's this like rubber band effect right where like implied balls will get way higher than historical or realized bowls and then at some point in the cycle uh usually corresponding to sort of the cyclicality of um whatever of of of the vix um which is sort of a different discussion but then there'll be a reversion and they'll sort of equilibriate or go back to equilibrium um and equilibrium is essentially implied ball being a bit higher than than realized or historical um and so then the question here is kind of as we're looking at this it's like is there more juice to be extracted like how much further do implies need to come down in order that we can get to that point where options are cheap again relative to the amount of movement that the marketplace could generate and I would I would expect there to be Pops in IV again and like say in vix I would expect it to go back up again um but with the skew the way it is now it's sort of if you followed the trend of the skew it's been lifting over time it keeps going higher and higher versus like say a month and a half ago where the entire SKU is sitting down there like around under 20 percent yeah and I you know I don't want to be a mega bear here but it just it does seem as if we're sort of in how would I put it we're in coiling we're in coiling territory right now yeah it is it's building and that doesn't mean we don't go up obviously um yeah but it you know again is there another event coming uh we do we did this on a pod too right before a big event and we're basically going yeah we're super bearish here because of the way this is looking and it's it's like in the midpoint of where I would think we were then then it was really low and now we're kind of moved up into like a maybe a midpoint the coiling position and uh so I don't know what's coming I don't really care I just know that this this has the look of essentially the near-term IVs going back up again yeah although her I think the right side is going to go up first ly but I think this SKU is going to get elevated I I do think that um we kind of especially after okay this this may be unfounded um and you'll break it down but I think I think we got a tap 400 again um no I 100 agree actually um I don't know I don't know why but and we can look at we can look at that Spike that closing Spike x and get a pretty decent idea of why it just looks so lopsided oh yeah I mean that's that's why it's just that you know the there's still enough down here that relative to how much there is up here it's still in Balance like you said right so it's it's almost like what we're gonna have to do is um yeah run all the way back up to 400 squeeze everybody again you sent me an oi let me let me pull that up that's that's what we really should be looking at for this actually um yeah this guy yeah yeah exactly so you can see for March 31st which would be you know of on this charts nine DTE but 72 percent of all the open interest on this chart expires on March 31st yeah I was looking at that as a very significant it's also the quarterly expiry um it's it almost and then I was also looking at um yeah the discrepancy between realize and historic sorry implied and historical is getting is closing but I was looking at sort of I have like this um comparison with indicators on thinkorswim which I don't have up right now but it looks to me like there's a little bit more of that Gap to fill so it makes perfect sense for us to uh ramp up into the quarterly despite the fact that we're in a window of weakness and then after that we could definitely see us start to curl over because none of the risk factors have actually gone away well well when that brings us back to the risk factors um of of the bank banking situation uh and but I just want to highlight this real quick I really like looking at these charts here and and highlighting the and seeing what percentage of the positioning is expiring and what the the composition of that ex that those positionings are what what's the net balance the net balance for Friday is puts okay so you just it's going to be really hard in my opinion for the market to go down without a significant event and I highly doubt those puts pay out I don't think 390 can even break this week it may get tested it may get tested I don't even think it could get tested unless there's a another event of some sort especially we could talk about Banks so with them essentially pumping in another what 393 trillion or billion sorry almost half a trillion uh onto the fed's balance sheet again that was almost all the QT that they've been working on for months and they basically just put it all back in in two weeks I mean we all do this right it's called procrastinating um that they're just they're just procrastinating and then when it hits it's going to be even worse right well so this is something gem always talked about was is the fed's job a lot of times was just to extract volatility out of basically compressed fall and so that was a really fall compressing event is when they came in and saved us essentially save the depositors and and something he talked about on TD Ameritrade was that it it took out the the it took out tail risk from the market and it didn't necessarily mean that the the FED wants the market to go higher it just meant that the Market's not going to crash yeah I mean I would kind of argue argue that it let's say it takes out the 360 tail risk and then it adds the 300 tail risk why would you say as the 300 because they they didn't completely fix the situation the situation is still there they just put a Band-Aid on it well um I mean it it actually pissed me off a little bit to be honest because they actually I mean they did multiple different things at the same time um if so the the big factor that's adding to the tail risk is just the inflation fears which now all of a sudden because we have this banking crisis nobody's thinking about the inflation stuff anymore or at least out of the headlines for a bit but the reality is the whole reason that we're doing this is to fight inflation as soon as they pump all that money back in uh they're undermining their own fight against inflation and that exposes us to sort of global and other inflationary risk factors which have always been the case uh you know whether it's um deglobalization or whatever stuff that we were talking about months ago the other the other issue is that um so right when we when you or I deposit money underneath less than 250 Grand uh into the bank um we are by default or those banks are paying right FDIC Deposit Insurance to protect our deposits the fact that the FED just backstopped the deposits of depositors who had an excess of 250 000 means that they um essentially removed the obligation of those depositors to do their due diligence in terms of the institutions that they bank with um and even though those institutions had not been paying for insurance they were given Insurance uh that to me actually undermines the value of my insured dollar because my insured dollar cost me more to insure than that insurance is worth because that insurance is worth nothing um okay I I real quick um I agree with you that the risks on a global scale systemically are higher but they didn't actually backstop all depositors they only backstopped a specific set right yeah it wasn't like they said okay we're just going to backstop all deposits the Ln actually came out and said no on of course perfect timing the way she came out and said that at the top of FMC let's say but and then at the lows on Thursday she came out and said well we may do it so but they're not going to do that yet we don't know but they haven't done that yet so you're you're 250 000 insured dollars are are still have some value because there's no guarantee that they're going to backstop anything above that yeah no I like they have been incrementally reduced or it's sort of unclear it's this it's this funny game that they're playing where um right the rules are the rules until the rules need to be broken um and this was like a really clear instance of that right like vagary ambiguity it's almost like we get this like we get so much Clarity around fed and sorry this is a bit of a tangent from the actual Market stuff um but um we get a lot of clarity around fed policy and broadcasting and all this stuff and yet I kind of am starting to understand a little bit better why the market always wants to doubt the fed and it's because when [ __ ] does hit the fan um the rules will go out the window and they kind of always happens and she said that she was in a hearing yesterday I think um where they at and they asked her basically and she just said yeah if if your bank is gonna if if your bank goes down and it's gonna cause systemic risk then we're going to come in and save it yeah and so that right there I think points to your it kind of alludes to your point where you're going well people don't have to do their due diligence you know put all your money with the huge too big to fail bank and if it goes under we're backstop it doesn't really matter well and the issue that I have with that is that it it incentivizes male investment for sure but it does reduce volatility it does compress volatility and it takes out tail risk because now all the two big fail Banks or if any bank is going to cause systemic risk it's backed up backstopped yeah yeah it postpones everything and when I say postponents I'm not saying next month I'm like saying five years ten years from now like they're um yeah but who cares about that we only care about Fridays I mean if you're a long-term investor you really do care about that kind of stuff but if you're like a Warren Buffett you don't give a you don't give a crap because you're just buying businesses anyway so you know you could basically just remove the risk Yourself by just going and buying real estate or just going and buying it but you don't have to buy stocks so um that's true anyway so the point what I'm saying is tail risk was taken out doesn't mean risk was taken out but uh you know seeing a 360 or three is seeing a 370 next week I highly highly doubt it it does not seem possible unless there was unless for some reason there was another tail risk event but um everybody's sitting in puts for Friday they're they're sitting here on a clock and I think every move that tries to go down gets bought back up into even 400 maybe even 405. I'm still not convinced that we don't see 405. yeah no I I would not um I think like there's a real possibility of an intense rally here because of that of all the um you know long all the all the bearishness that just got caught off sides by that right and that that move needs time to unwind so to speak right it's like everybody um was getting hyper bearish and then like with fomc in particular got caught offsides and now like you're saying it'll take some time for the insurer the insured people to bail on their put insurance and as that happens it's just going to sort of like gently bring us up until all of a sudden we're ready for the next fall event uh which is probably not going to be until we get another FOC or something like that yeah and so let's look at the vix for for Wednesday yeah folks always you know I'm still debating whether you buy you gex the vix right well let's look at the gecks up there at the top looking at the chart here okay yeah and so this is uh you know closing yesterday uh closing look and I talked about this in that morning video on Friday it was you know basically we're looking at a vix we're we opened at a put wall and a call wall at 24.25 and the biggest gamma level in the zero gamma line was about 22.23 and so I I was saying like look this vix doesn't look like it's going to go much higher it just doesn't seem like it's possible because it's sitting here at resistance and the zero gamma line is below us and that essentially would mean that there's a lot of positive gamma to essentially expire or or to Decay or people are exposed to the upside a little too much yeah see a move back down towards the 21. well that's exactly what happened yeah yeah yeah that makes perfect sense exactly so we're still sitting in this situation where okay well now we're potentially at a floor in the fix and we saw that on the SKU with the IV levels and where the skus were that were probably at a floor of the vix I would not be surprised to see Monday Tuesday being cells or being being sell to rips is essentially and then Wednesday through Friday being just a bludgeoning of bears that's sort of my plan I mean that that makes sense to me I think uh yeah I mean it's kind of open to whether well actually if I was back at spy gex here it's not yeah we don't have anything that's in really really close proximity except for these 3.95s but most of those are probably kind of far away so someone it does kind of make sense for us to come back to around the 390 and then people um to recognize hey you know there's no way we're going to break this and then that leads the next round up so um that makes sense like I could I sort of like my my ideal situation if you asked me would be uh Monday Tuesday see Vicks start slowly coming back up to that 25 again and then all of that expires on Wednesday and then we see again another cycle of uh basically underperformance and vix and we just get a crush yeah that's sort of my ideal situation we get it crushed back up to like 405. and maybe I don't know maybe even higher I don't want to say higher but 400 405 area is sort of where I was I'd be targeting and and then we can finally get what all the Bears are hoping for but I still need to see I would still need to see the conditions meet up again because right now it's just it's looking all bullish to me yeah um no it uh let's see drawing some really excellent lines here which are going to reveal everything to everybody now these are the these are those main trend lines people have been following right so yeah so seeing maybe another move down into that 390 and then uh maybe coming up and trying to tag that trend line even 310. yeah then you get the previous High which they you know who knows they could come they've already taken out the previous double high and then they sold it they may even try to take out this high that would be insane yeah the funny thing is like it's actually gonna be kind of fun for us I think because like we're in this like fun range of like what do you call that it's sort of like a volatility box or something like this where it's like between 390 and 400 we've just got like boom boom boom like whippy whippy moves um which are really fun but then the broader market for investors and whatever just goes absolutely nowhere so it's it's just a holding formation and I feel like um just yeah we just got to play the box man play The Box until it's Until It Breaks and it's not going to break without some you know one of these big expiries will break it I think and so that brings up another Point let's look at uh so what I'll do then is like if I kind of have an idea of where I think the market is going to go by Wednesday and then by Friday which we sort of have a plan it's gonna happen afterwards you can kind of see what the vix is looking like for the next expiry but this is a big one and they're still bullish even into the next expiry up to 30. but it's the same kind of thing let's see here I'll send it to you here okay I'm making this like beautiful box here so this would be right after you know end of month end of quarter beginning of month flows and then we got fix expiring again uh this guy yeah yeah that's it and so uh you know we're looking at a same kind of thing where you know you got the 26 25 being stored at the top and you got an outlier here at 30. but you know you still got the zero gamma sitting here at 23. so every time it goes up into 25 26 I'm thinking that's a low for for the like a little swing low you know intermediate on S on spy yeah yeah no it makes a lot of sense um and what do you know the stigma is right here yeah exactly yeah that too yeah so you know all those kind of Confluence together which which again it says the volatility probably isn't over even after the end of quarter um but who knows we we could just be higher and just be in a higher range right say they get us up to 400 okay well now the range maybe four 405 395. yeah and we're still at a high vix but when the Spy is higher as well and Jim talked about this as well one time he said before the big crash you'll probably see vix up spy up and is sort of playing out that way again where you know you're gonna have a higher elevated vix but then you're gonna have spy going up as well and making you know kind of carving out higher ranges and then I'm guessing the final the final nail would be just some blow off top but I'm not I'm not trying to project out too far I'm just looking out until uh after end of quarter where the volatility doesn't look like it's going to end which is great where is spy going to be it's probably gonna end up being in a higher range that's what I like yeah yeah range giant crash [Music] foreign foreign foreign