Broken Pie Chart
275 episodes - English - Latest episode: 29 days ago - ★★★★★ - 16 ratingsThe Broken Pie Chart Podcast offers fresh looks at investment portfolio management, economics, markets, retirement planning, and more by simplifying and explaining important aspects of financial markets and the economy in easy to understand ways.
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Episodes
Market Crash? | Fed Meeting Dot Plots | Inflation Break | Apple’s AI Breakout |
June 14, 2024 14:43 - 33 minutes - 45.5 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial are back with a Fed meeting day edition where they break down the new end of year interest rate dot plots and Jay Powell’s press conference. Plus, they riff on Harry Dent’s latest prediction saying Nvidia is going down 98% and why the doom and gloom crowd are harmful to investors. Later discussing Apple’s breakout after their AI announcement at WWDC conference and the reaction to the CPI inflation print. All this and more! Apple’s...
GameStop Option Bets | S&P Too Top Heavy? | Nvidia Passes Apple | Upcoming Banking Problems from Mortgages?
June 09, 2024 17:38 - 45 minutes - 62.7 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial look at some what seem like crazy options trades in GameStop. Plus, examining Nvidia passing Apple as the second largest stock in the S&P 500, and can it pass Microsoft for #1? They also talk about whether it’s a problem the top 4 stocks in the S&P 500 make up such a large percentage of the weighting and comparing it to the last time it was this high. Later they take some listener questions including whether the data shows cracks in the...
Crazy VIX Bets Due to Election? | Market Reversal | Home Ownership Affordability Today | Shiller PE
June 02, 2024 13:06 - 49 minutes - 68.6 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial review some interesting VIX option trades around the election and around inauguration day in 2025 compared to the next few months options action. When young people say home ownership dreams are dead is that true? Surprising numbers to compare inflation adjusted costs. Plus, on Friday the market swung from down over 1% to up almost 1% as we continue to be in a buy the dip regime. Later discussing the evolving Fed rate cut expectations an...
Nvidia Earnings Recap | Get Over It Rates are Staying Higher | Despite Rates Home Prices Up YoY | AI Mentions in Earnings Calls | What VVIX and VIX Did
May 27, 2024 00:20 - 57 minutes - 79.6 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial talk about Nvidia’s earnings report and how they are catching up to Apple in total market cap. Will they cash Microsoft? Then they note the percentage of companies mentioning AI on earnings calls. What does that mean for CAPEX spending on semiconductor chips? Later they look at how housing prices after a small drop are now growing YoY despite higher interest rates and higher payment per median home price. The gold rally now one is notic...
GameStop Options Activity Prior to Roaring Kitty Reemergence | S&P 500 Makes New High | 90% of the Time No Recession or Stagflation | When Covered Calls Get Called Away Early
May 19, 2024 19:08 - 1 hour - 57.9 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial start by looking at GameStop’s (GME) call option open interest and activity in the days prior to Roaring Kitty tweeting . They notice the increase in options activity ahead of the surge in the stock’s price and volume spike and whether the options market led the stock market on GME. Then they comment on another new all-time high by the S&P 500 Index and how according to a BofA chart 90% of the time markets are not in a recession or in s...
Goldilocks Stock Market and What Could Derail It? | Interest Rates Aren’t Historically High | Cheap to Hedge the Downside Now with Options
May 12, 2024 19:36 - 59 minutes - 82.3 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial discuss the idea that the stock market is in a Goldilocks period based on sustained higher margins and earnings growth. Then, they discuss how out of the headlines the Fed has already started easing by reducing their balance sheet runoff each month. Why reducing the Overnight Reverse Repo usage (RRP) isn’t restrictive but rather was a reaction to demand for short term treasuries by money markets. Later they talk about how interest rates...
Reinvesting High Dividends Deep Dive | Unemployment & the Fed | Option Time Value Explained | Shareholder Yield
May 05, 2024 15:14 - 1 hour - 86.3 MBDerek Moore is back with Jay Pestrichelli, CEO of ZEGA Financial this week to discuss the Jay Powell Fed decision and the latest in employment and inflation. Then, they do a deep dive into dividend reinvestment. Specifically, analyzing the idea of acquiring more shares and can dividends reduce or eventually pay down your initial cost? They then do a deep dive into how the time premium works on options. Lowest year over year wages since 2021 Unemployment ticks up. High dividend ...
Now Its 1 Fed Rate Cut? | Nvidia Options Volatility Implied Move at Earnings | Sell in May and Go Away in Election Years? | Inflation Higher Than 1970s?
April 28, 2024 17:58 - 39 minutes - 54.5 MBDerek Moore discusses the declining probabilities for Fed interest rate cuts in 2024. Plus, how PCE Supercore did not make the case for Fed rate cuts. Later, looking at the analyst’s expectations for earnings growth within the S&P 500 Index. Finally, comments on a paper showing how using the pre-1983 methods to compute CPI Consumer Price Index show we had higher inflation that the 1970s. Declining Fed Funds rate cut probabilities for 2024. Explaining how implied interest rates from F...
Market Correction | Mortgage Rates Higher | No Thanks 24-Hour Trading | Synthetic Options
April 21, 2024 14:27 - 58 minutes - 79.9 MBDerek Moore and Mike Puck from ZEGA Financial discuss Friday’s selloff. It’s official, we are in a 5% market correction. Looking back at other corrections greater than 5% from the highs. Mortgage rates move back up while 10-year treasury yields surge. Commodities are higher on the year but still down from all-time highs. Gold makes another all time high. Later they look at the value vs growth performance including the magnificent 7 stocks compared to the rest of the market. Finally, stocks a...
Market Selloff | No Rate Cuts? | Bitcoin vs Gold | CPI Inflation Sticky | VIX Curve
April 14, 2024 20:11 - 56 minutes - 77.1 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss Friday’s selloff. So, was it all the readjustment of Fed rate cut expectations? Is CPI Inflation putting the Fed in a box? Michael Saylor says Bitcoin is better than Gold. The rally in Gold that everyone is sleeping on. CPI Supercore trending higher showing services not goods are the culprit. Later they examine the VIX Futures curve as the front months rise. Finally, they talk about the continued bear market due to higher rates...
Buying At All-time Highs Better? | S&P 500 Returns After Last Hike | Developed International Beats the S&P | How To Tell Whether Options Are Expensive
April 08, 2024 03:49 - 58 minutes - 53.8 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are back to explore surprising data about buying the market at all-time highs vs any other day. Plus, how do markets and bonds perform post the last fed hike? Later, while you were sleeping developed international markets outperform U.S. markets. And listener question “who do I know what a good price for an option is?” What is a high or low price for an option? Components that make up and drive option prices Market performanc...
Most Record Highs Since 2013 | The Fed No Rush to Cut? | VVIX and VIX Super Quiet | Value vs Growth | Cocoa More Valuable than Gold?
March 31, 2024 20:12 - 27 minutes - 25.3 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss Fed governor Waller (not Christopher Walkin) hinting the Fed should be in no rush to cut interest rates. Plus, we haven’t seen this many record stock market highs since Q1 of 2013. So, what does that mean if anything? Examining VVIX and VIX which both are really quiet and low right now. Growth has outperformed value by quite a bit, but do some relative value charts hint value may have its time in the sun? Later, corporate profi...
The Fed Gets Bullish? | Markets Don’t Go Down Just Because They Go Up | Yield Curve Inversion Record | Bitcoin Halving
March 24, 2024 15:43 - 56 minutes - 51.6 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss the Fed getting bullish by reducing unemployment estimates, raising GDP growth estimates, and doing nothing else but the market liked it. All while the yield curve inversion sets a record for longest in history. What is Bitcoin halving and what does it do for supply and demand? Looking at the stock market after going up a lot, why historically it can continue going (or not) up. Looking at 1995-1999 post Fed cut bullish moves. W...
Michael Saylor is Right on Bitcoin? |Worst Crash Since 1929 Coming? | Semiconductors Get Big Flows | 0 DTE Option Stats
March 17, 2024 15:23 - 56 minutes - 51.9 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, talk through some examples of options trading in 0 DTE options on the SPX and Nvidia. Plus, a hedge fund manager says the worst crash since 1929 is coming. Looking at huge inflows into the semiconductor ETFs. Derek actually agrees with Michael Saylor’s points on Bitcoin including whether it’s a currency or property. Media mentions of stock market bubble are rising but so are continued mentions of AI. Finally, PPI producer price index c...
Worst Market Timing Ever? | Options Cost of Carry | Option Put Call Parity | Unemployment Bad News Is Bad News?
March 11, 2024 19:16 - 1 hour - 61.5 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss how the magnificent 7 stocks aren’t all going up this year. Plus, reviewing what the worst time to buy stocks was and how investors would have done even if they had. Later, they explain why the last 10-15 years before retirement need growth but hedging. How Japan’s central bank might take interest rates from negative to positive, shipping container rates, inflation, Nvidia probabilities and the 15th anniversary of CNBC’s “Mark ...
Why VIX Is Hard to Trade | SuperCore PCE High Again?| High Yield Bond Spreads | The Fed Is Not Cutting? | Semiconductors Surging (Again)
March 03, 2024 16:39 - 1 hour - 55.3 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, explain why it’s so hard to trade the VIX via options or VIX futures given the nature of the products and how VIX works. Supercore PCE, yeah that’s a thing now, came in hot so what does that mean for the Fed and rates? Speaking of the Fed cutting rates, what if they don’t cut this year? Later they explore how High Yield Bonds aren’t showing any fear and comparing the High Yield spread, the long term annualized total return of the High ...
Nvidia To the Moon | Implied Volatility and Earnings | Earnings and Markets Have Low Correlations? | Nvidia Cheap?
February 25, 2024 19:14 - 46 minutes - 43 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss Nvidia’s beat on earnings, their march towards $2trillion market cap, and how as earnings forecasts rise, even though the stock has made new highs, forward PE ratios go lower. Then, they explore what the options market via implied volatility was forecasting for an Nvidia move post earnings. Later, they review a comparison between the S&P 500 Index annual return vs the EPS growth to see if there is any relationship. Hint, it’s n...
Put & Call Implied Volatility Mismatch? | US Dollar vs S&P 500 Correlation | Sticky Inflation | Japan Recession | Explaining Why Stocks Go Up (or down)
February 19, 2024 13:53 - 55 minutes - 50.5 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, follow up on last week’s PE ration (useless?) discussion explaining how stocks go up or down based on earnings, multiples, and other factors. Then they delve into correlations between the US Dollar Index and the S&P 500 Index. Later, the surprising fact that as Japan’s Nikkei Index makes 35-year all-time highs they are in a technical recession. Finally, more evidence shows that inflation may be stickier and some that it may not. As alw...
Is the Forward PE Useless?| S&P 500 Election Seasonality | Gen Z vs. Gen X Special
February 11, 2024 17:22 - 1 hour - 66.4 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, ask whether forward PE ratios are predictive of future market direction? Then they review how the S&P 500 Index has performed during each presidential election going back to 1996. Does it matter which party (Republicans or Democrats) are in office for markets? Is Tesla going to get kicked out of the Magnificent 7? Later Jay and Derek are joined by two Gen Z’ers (Zander and Bobby), to explore what their views are on money, markets, and ...
Too Focused on Fed Rates?| META Earnings Implied Volatility | NAV Erosion Myth
February 04, 2024 20:24 - 1 hour - 57.2 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss the Fed and Powell press conference market reaction. Plus, they look at META and Apple option’s implied volatilities did or didn’t predict the post earnings moves. 1994-95 experience in Fed rates and bond yields compared to today. Later, they set the record straight on what NAV erosion is, why the Shiller PE may not be predictive of markets, low response rates to economic surveys, and correlation between CPI and shipping contai...
Explaining Telsa Implied Volatility | Bitcoin Selloff Post Spot ETF | What History Tells Us About Election Year Returns
January 28, 2024 16:36 - 43 minutes - 40 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are it at once again where they analyze Tesla’s implied volatility right before earnings vs what happened. Did the option’s market misprice premiums? Also, in the episode they talk about Bitcoin’s drop as a sell the news buy the rumor example while Derek argues that Bitcoin’s volatility make it unusable as a currency to transact business. Later they dive into some data showing that when markets are up 20% the year before the election, ...
What Option Volatility Means for Markets | Is the Market Too Dovish on Interest Rate Expectations? | Does the Fed Need an Economics Lesson?
January 21, 2024 14:15 - 45 minutes - 42 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are back to discuss whether the Fed grasps how prices historically always rise. That prices never drop and inflation dropping doesn’t mean prices go down. Then they discuss the forward earnings estimates showing growth for the S&P 500 Index while comparing price to sales compared to January of 2022. Later, they discuss what the option volatility markets are signaling for the S&P 500 over the near term. All that and more plus is the mar...
Bitcoin ETF Sell the News? | Expect Stock Market Corrections | Value vs. Growth | Travel Inflation Cooling?
January 14, 2024 12:57 - 49 minutes - 44.9 MBDerek Moore and Mike Puck of ZEGA Financial join up to discuss the run up and selloff in bitcoin around the bitcoin spot etf launches. Is it the obvious buy the rumor sell the news situation? How CPI components like lodging away from home and travel pricing are starting to cool. Later, examining the value vs growth debate and whether this is the year for value to finally have its day. Plus, forward PE valuations and how they have fluctuated over the last 2 years. Bitcoin ETFs finally l...
Hedging With Options Examples | Soft Landing? | US Congress Trading Returns | Is Good News or Bad News Good?
January 08, 2024 00:15 - 50 minutes - 45.8 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are back this week to discuss some hedging examples and how hedging is cheap right now. They even go through a few examples. Then they get into the sharp rise in container shipping costs before discussing the weaker PMI Services data. Later they note Bloomberg’s data showing articles mentioning “soft landing” are the highest since the 2000-2001 recession. A fun segment where they go through data from Unusual Whales showing the 2023 ret...
2024 Predictions | Late Year Rally Bullish? | What if Investors Are Expecting Too Many Rate Cuts?
January 01, 2024 16:15 - 51 minutes - 47.1 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, go through their 2024 predictions and review how right or wrong they were in 2023. Why predictions are so hard to make and why they are overrated. When markets go up over 10% in the final 2 months of the year historically what does that mean for returns the following year? How earnings growth and market returns are non-correlations. According to NAAIM Active Manager Equity exposure is now greater than 100% compared to the October lows ...
0 DTE Options to Blame for Selloff? | 2024 Targets for S&P 500 Index | Fed Dot Plots Always Wrong?
December 23, 2023 13:57 - 48 minutes - 44.1 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss how people are blaming the Wed 1.5% selloff on 0 DTE options while the CBOE says not so fast as dealers may have been buying stocks during the drawdown thus stabilizing markets. Later they talk shipping container rates spiking higher due to issues in the Suez Canal and Red Sea. Is this a fly in the ointment for inflation? Then they talk about how analysts making 2024 S&P 500 Index price and earnings estimates must get the forwa...
Everyone Betting on Rate Cuts | Blackrock Buying 44% of Homes? | Record Call Option Volume & VVIX and VIX Out of Synch?
December 17, 2023 16:09 - 44 minutes - 40.4 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss the new consensus of the Fed doing multiple rate cuts so what could go wrong? Record call option volume while the VVIX makes a move higher while the VIX continues lower. Viral article said 44% of home sales were to big institutions like Blackrock and Innovation homes but it was less than 0.4%. Later they look at whether the Powell Fed and the Voelker Fed are similar in declaring mission accomplished. Finally, they cover how bul...
S&P 500 Targets | VIX Index Largest 7-Week declines | Simplifying Synthetic Long Stock with Covered Calls | Labor Force Participation
December 11, 2023 14:27 - 1 hour - 55.1 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, join up once again to discuss the drop in the VIX Index off the highs. How S&P 500 2024 targets are showing up and why investors may not care. Labor force participation turned down so what does that mean if anything? Finally, Simplifying what synthetic long stock strategies are and synthetic long stock with covered calls. What are the features and benefits? How are they like just owning stock and or owning stock with a covered call? Wh...
VIX Index Goes Nowhere | Cheap Puts to Hedge? |Cheaper to Rent Than Buy? | Markets During Presidential Election Years
December 03, 2023 15:11 - 40 minutes - 37.4 MBDerek Moore and Jay Pestrichelli join up to discuss an unchanged VIX and VVIX index. Was our trading platform screen broken? Whether the VIX and VVIX Index is a coiled spring as they are both in compression mode of late. Then, they explore new data that shows the cost to buy a home vs rent is really high meaning its very costly to buy vs rent right now. Did the Fed cause this? Jay and Derek also explore how cheap 1 year out puts are on the S&P 500 Index right now. Does no one want protection...
Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem?
November 26, 2023 17:01 - 53 minutes - 48.7 MBDerek Moore is back with Jay Pestrichelli this week where they analyze the recent viral video where Dave Ramsey suggests people can safely withdraw 8% forever in retirement. What doesn’t make sense, what is left out, and why the assumptions may be faulty. Then, they discuss the market seasonality and whether this November pop higher already delivered a year end rally? Later Jay and Derek discuss the huge purchase of VIX calls this week and what it did to the VVIX Index as well as an interest...
Probability of Recession? | Explaining How US Treasury Bond Auctions Work | S&P 500 Index Member Changes | Option Premium Intrinsic vs. Extrinsic
November 20, 2023 04:34 - 49 minutes - 45.5 MBDerek Moore is back with Jay Pestrichelli, CEO of ZEGA Financial, to review the Goldman Sachs probability of recession and Fed rate forecast for 2024. Then they do a deeper dive on key aspects of US Treasury Bond auctions. Hint, it’s a Dutch auction and how to read the results of treasury auctions including the bid to cover ratio. Later they talk through changes in the makeup of the S&P 500 Index companies and what the impact on earnings may be. Plus, how even when stocks go in and out of th...
Stock Market Returns After First Rate Cut | Yield Curve Preceding Recessions | Investors Rooting for the Wrong Thing
November 12, 2023 19:17 - 29 minutes - 26.6 MBDerek Moore does a deep dive asking the question why is everyone rooting for the Fed to lower rates? If the Fed must lower interest rates, doesn’t that mean there is trouble? Should investors instead be rooting for stable but higher rates where the long end un-inverts as a proxy for higher growth? What happens to market performance between the last Fed hike and first rate cut? What is the historical performance of markets post the first Fed rate cut? Then looking at past yield curve (10-year...
Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment
November 05, 2023 19:01 - 48 minutes - 44.8 MBDerek Moore and ZEGA Financial CEO Jay Pestrichelli ponder whether the Fed is truly done and if the street is too optimistic on rate cuts in 2024. Plus, they discuss new data showing option selling ETFs are having record assets between inflows and new entrants. Bad news is good news still as employment ticks up. They delve deeper into the numbers including labor participation rate, size of workforce, and more in the household survey data. Finally, they talk about options volatility and how i...
Correction Territory | No Fear Yet in Markets? | When Does Capitulation Happen in Markets?
October 29, 2023 12:06 - 58 minutes - 53.7 MBDerek Moore and ZEGA Financial CEO Jay Pestrichelli to discuss how despite the correction territory (markets down 10% from top), the VIX index hasn’t shown any real fear. So, what will it take to see capitulation in the markets? Thus far high yield spreads haven’t reflected too much worry. Then Derek is tired of pundits talking about equal weighted market vs the “Magnificent 7” comparison as this is why you buy the index! Later, they discuss the new Fed survey showing how much net worth one ...
Powell vs. Bond Traders | Option Volatility During Earnings | Mortgage Rate Spread to Treasuries
October 22, 2023 15:21 - 58 minutes - 53.9 MBDerek Moore is back with ZEGA Financial CEO Jay Pestrichelli to discuss whether Jay Powell or bond traders are in charge of interest rate policy? How option volatility changes around earnings announcements. Why the spread between the 30-year Mortgage Rate and 10-year treasuries is historically wide including MBS (Mortgage-Backed Securities) impact. Plus, how MBS are doing something kind of weird right now. Later they discuss financial conditions, how high yield loans and bonds have greatly o...
Deep Dive: Can Bonds Recover? | TLT ETF Breakdown |Inflation and the Fed
October 15, 2023 12:20 - 34 minutes - 31.7 MBDerek Moore explains what it would take interest rate wise for bonds and TLT to get back to breakeven on price. A lot of misunderstanding is out there on buying bonds at the bottom and what that means. How bonds have different drivers than stocks. Plus, inflation is ticking back up and what that means for the Fed. Finally, a deep dive into TLT components and the math behind what those buying TLT are hoping for. What would make bonds go back up? Examining TLT iShares 20+ etf componen...
Bond Market Collapse | Oil Price Problems? | Bond Stock Correlations
October 09, 2023 20:59 - 42 minutes - 38.9 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, observe the destruction in long term treasury bonds due to the reflation of the yield curve. How does the market do with higher rates? What does a flattening yield curve mean for the economy? Bond and Stock correlations mean bonds not protecting portfolios? The Hussman 12-year forward return gauge. Strategic petroleum reserve (SPR) now only has 17 days of supply left. And by the way, there is still a lot of good news like improving mor...
Government Shutdowns & Markets | Short ITM Puts Alternative to Covered Calls | Why Hedging Works
October 01, 2023 16:51 - 57 minutes - 52.5 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, look at how markets have done during past Government Shutdowns. The S&P 500 Index during, and 3 and 6 months later. Then they get in dept on why selling in-the-money puts is the same as selling covered calls on stock. What are cash covered puts? How US Treasuries yielding 5% plus may tip the scales. The risks and payoffs of one versus the other. How cash settled European style options differ from American style options at expiration (a...
Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser
September 25, 2023 10:21 - 48 minutes - 44.4 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discussed the fallout in the markets during Jerome Powell’s press conference post Fed decision. Then, they talk about high yield spreads and current interest rates across relative fixed income like investment grade, high yield, and treasuries. Finally, they explore how options are priced and which options are considered expensive or cheap vs one another. It might surprise you to take a step back looking at the per day costs. How option...
0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact
September 17, 2023 14:24 - 56 minutes - 52 MBDerek Moore and Jay Pestrichelli, CEO of ZEGA Financial, talk through the recent CBOE analysis on impact of 0DTE options. Contrary to popular belief, 0DTE options may not be causing imbalances according to the data. Plus, explaining how cash settled (European) style options differ from American style where you can be assigned (or auto exercised). How short puts can mirror covered calls. Not surprisingly, Jay and Derek get detailed into some of the similarities. Plus, is inflation coming back...
Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia Volatilities
September 10, 2023 23:18 - 1 hour - 55.7 MBDerek Moore is back with ZEGA CEO Jay Pestrichelli where they discuss whether higher real yields are an issue for markets and how this period seems similar to the 1990’s. Then they dive into implied volatility using companies like Tesla TSLA and Nvidia NVDA as examples to explore how options markets express views on expected moves based on options prices. What are the drivers of volatility moving higher or lower. How earnings affect implied volatility and what typically happens after the ann...
Recession Predictions Still Wrong? | Synthetic Options | Unemployment Anomalies | Oil Prices Breakout
September 04, 2023 10:44 - 47 minutes - 43.8 MBDerek Moore is joined once again by Jay Pestrichelli, CEO of ZEGA Financial where deep dive into the latest employment numbers. Plus, they ponder whether once everyone flips a recession finally comes? Later, they noticed some technical analysis on crude oil prices and a stealth rally. Then Jay and Derek talk through the idea of synthetic option positions including synthetic long stock and its attributes. Q2 earnings wrap up and how analysts over promised worse earnings and what’s ahead. ...
0 DTE Options No Problem? | Jay Powell’s Wyoming Speech Points to More Interest Rate Hikes?
August 27, 2023 16:23 - 47 minutes - 43.2 MBDerek Moore is joined by Jay Pestrichelli, CEO of ZEGA Financial, to discuss the Bank of America piece saying maybe Goldman Sachs got 0 DTE option effects wrong. Plus, what did Jay Powell’s speech mean if anything? New Fed Funds futures probabilities point to the Fed raising yet again. Then, they go through some odds and ends like how participation in employment surveys is dropping, the high Atlanta Fed GDP now numbers, and more. The Fed on track for more interest rate hikes? Jay Pow...
Everyone Wrong on Interest Rates | What Fed Funds Probabilities Really Mean
August 23, 2023 12:53 - 31 minutes - 28.4 MBDerek Moore discusses how everyone seemed to get the direction of rates across the yield curve wrong. How adding duration in hindsight was the wrong choice. Comparing market prognostications in 1995 to today. What the Fed Funds rate probabilities really measure. Plus, explaining why bonds make or lose money based it their duration (sensitivity to interest rates). The bond market got rates wrong. What is happening at the long end of the yield curve? Why doesn’t the Fed have to lower...
S&P 500 Forward PE Valuations vs Future Returns | Volatility in Stock & Option Markets
August 13, 2023 15:14 - 41 minutes - 38.3 MBDerek Moore and Jay Pestrichelli return this week to discuss what current forward PE rations and whether that informs future market returns. Reasons PE ratios may go up or down including earnings increasing or markets going lower. Have there been a jump in forward earnings expectations? Then they check in on the high yield spread against treasuries and relationship to the VIX Index. Later they discuss the moving average of the unemployment rate and whether that is leading or lagging as an in...
US Debt Down Grade Effects | Interest Rates Effect on Option Prices | US Treasury Yield Curve Dis-inverting? | US Debt Massive Expansion
August 06, 2023 17:14 - 49 minutes - 45.6 MBDerek Moore and Jay Pestrichelli are back at it discussing how higher interest rates have impacted the price of call and put options. They use some examples of what happens to options prices due to rates and dividends. Then they discuss the recent rise in long term treasury rates, the downgrade of US Treasury debt, and what if any effect the US Treasury issuing massive amounts of new treasury bonds into the market may have. Exploring the 36-month drawdown in the US Aggregate Bond Index compa...
Cheapest (SPX) PUT Protection You've Ever Seen? | S&P 500 Index Rebalancing | Bank of Japan Hawkishness
August 01, 2023 11:54 - 30 minutes - 27.5 MBDerek Moore responds to a Bloomberg chart highlighting how cheap protective puts are right now according to Bank of America research. At least since 2008, and why it might be good to be hedged when it’s cheap rather than waiting for a market crash to happen first. Then he explains some requirements for a stock to get included in the S&P 500 Index, when it regularly rebalances, and how relaxing the rules on multi share class stocks might pave the way for stocks like AirBnB to potentially be a...
Why Crash Predictions Don’t Help | What Does the Market Fear? | Confusing Market Data | 11th Best Start to the Year
July 23, 2023 16:44 - 57 minutes - 52.5 MBJay Pestrichelli checks in with Derek Moore to discuss people that always predict horrible market crashes are coming and why it’s so unhelpful for investors. Then they talk through what the market fears (besides the normal stuff) at this point including profit margins and looming strikes. Why is economic data so confusing and if its broken. Finally, they go through the S&P 500 having the 11th best 1st half and compare this market cycle to the 2000 bear market. Fear and market crash pre...
Does Inflation Matter? | Make More by Losing Less? | Volatility and Cost of Hedging | Someone Buys a lot of VIX Calls
July 15, 2023 22:32 - 1 hour - 58.2 MBDerek Moore is joined once again by ZEGA Financial CEO Jay Pestrichelli to debate whether inflation still matters to the market. Plus, even though stocks like META are up huge off the bottom, they still are down from their prior highs. Why this shows the power of losing less through proper hedging and how it can potentially increase returns during volatile times. Speaking of volatility, they discuss the state of Vol in the markets including the VIX and why volatility isn’t lower considering ...
Short Sellers Give Up? | The Case for Interest Rates to Stay High for Longer
July 10, 2023 12:57 - 26 minutes - 23.8 MBDerek Moore points out that no, the Fed doesn’t need to lower rates without some problem or a recession. Looking at the nineties when markets went up despite Fed Funds rate above 5%. Then looking at the net short positions of traders via the commitment of traders report. It shows recently at markets moved higher, short sellers covered causing a short squeeze? Finally, before a recommendation, some talk about the upcoming earnings season and a reminder in 2022 earnings did not go below those ...