A very happy Sunday to you,
Did any of you happen to notice crude oil futures after Thursday's close?
I sure did.
48 hours before (give or take), I had taken a couple of long micro oil contracts when crude dipped below $90 a barrel.
By Thursday's close, it was at $95…
…and then a tweet hit…and so did my stops.
$1,000 gone in less than 10 seconds (because I use stop losses).
I had many four-letter words that I dropped into the TheoTRADE group chat that afternoon.
But the extra kick in the nuts was Don told me so.
You think he's been popping off about 0DTE trades by accident? Nothing Don does is by accident…EVER!
Those trades are like Prime Rib for this market.
The ones that lose? You know how much that is BEFORE ever placing the trade.
All you have to do is let the volatility work for you, sending price to the destination while jump in a pile of gold coins like Scrooge McDuck.
But in all seriousness, I want you to think about this for a moment.
Which is easier to deal with:
- A trade where one tweet can stop you out even though you're right
- A trade where you drop in the orders and let this violent price action do its job?
Don won 71% of his Superfly's last week - the worst week for bulls in a while. That's not a coincidence. That's how this stuff works.
So, let me throw this at you one…last…time…Tuesday…1PM…
…you know what? Don's already placed trades LIVE in the last two sessions he held.
Just click the link, and you'll figure out the rest.
Jordan Schneir
Editorial Director, TheoTRADE
Don Kaufman: 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 is the options market's measure of expected movement. High IV means the market is pricing in big moves. That premium gets baked into every option you buy and works against you from the moment the trade is placed.
Here is the number that changes everything. At 60% implied volatility, if you buy a naked put or call, you have to be right on direction between 65 and 75 percent of the time just to break even.
CLICK HERE to continue reading Don's article.
Brandon Chapman: Why 2% Felt Like Nothing
Institutions are so heavily hedged right now that a 2% decline in the S&P 500 is background noise.
The market sold off 2% yesterday. The VIX barely moved.
The SKEW index climbed to 143, confirming that desks added even more downside protection into the decline.
That disconnect between implied volatility and actual market movement is not sustainable. Either realized volatility catches up to the VIX, or the VIX collapses.
The Block Hunter Console flagged 35,000 call contracts on Microsoft in a single print during today's session. Someone is positioning for the second scenario.
Someone is positioning for the second scenario…
The VIX is overstating the movement we are seeing in the S&P 500. I'm going to show you the metrics that prove it.
Then we'll dig into what SKEW at 143 reveals about how aggressively institutions are still adding hedges.
And the 35,000-contract Microsoft print tells you exactly how one desk expects this tension to resolve
CLICK HERE to continue reading Brandon's article.
Gianni Di Poce: The 60/40 Portfolio Is Broken. Here's What Replaces It.
The 60/40 portfolio is one of the most trusted ideas in all of investing. Own stocks for growth. Own bonds for safety. When one zigs, the other zags.
It worked beautifully for decades. Then inflation showed up and broke the whole thing.
In 2022, long-term Treasuries lost more than 30% in some stretches. The S&P 500 dropped nearly 20% right alongside them. Stocks and bonds fell together. The "balanced" portfolio delivered the worst year in decades.
That was not a fluke. It was a preview.
Inflation exposes the biggest flaw in traditional portfolio construction.
But one asset class thrives when stocks and bonds both fail.
And getting positioned before the next wave is what separates the prepared from the panicked.
CLICK HERE to continue reading Gianni's article.
Jeff Bierman: Every Crash Has a Trigger. This One Is Already Here.
Friday morning was a "cell program"...as in a prison cell.
Private credit funds are trapped in a $5 billion cell right now as investors rush for the exits.
That headline alone told me everything about where this market is heading.
Most people think the market is falling because of the war. The war is already priced in.
The real driver is credit. Private credit funds are liquidating stock positions to fund redemptions back to their investors.
That mechanism will not stop until the credit pressure is relieved. This weekend, I want to walk you through something most traders have never studied.
It is a framework from the 1800s that explains why this is happening and how long it could last.
CLICK HERE to continue reading Jeff's article.
Tony Rago: Volatility Is Really Good at Dismantling People
Thursday morning, I was talking with Don Kaufman before my session, and we both agreed that too many people were getting taken apart this week. One line from that conversation stuck with me.
"Volatility is really good at systematically dismantling people."
We were not just talking about money. We were talking about what happens between your ears.
"I'm talking about psychologically. This is the stuff that messes with people."
This week was a masterclass in how volatility breaks traders down. It happened to me. It happened in the room.
Understanding how that process works is what separates the traders who survive from the ones who blow up.
CLICK HERE to continue reading Tony's article.
Blake Young: Trade Like the Ghost Is Watching
"Dance like nobody is watching; love like you've never been hurt; sing like nobody's listening; live like it's heaven on earth."
Both Mark Twain and William W. Purkey have been credited with this saying. Regardless of its origin, the sentiment holds.
My reading of this quote is simple: live authentically, and don't let your ego or the opinions of others prevent you from living your happiest, fullest life.
With that in mind, I want to offer a twist for traders: "Dance like nobody is watching, but don't trade that way."
I have been trading for nearly 26 years and have experienced both significant successes and, frankly, significant losses. One core principle has held true throughout: I trade better when someone is watching.
CLICK HERE to continue reading Blake's article.
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