The tastylive network

Johnny Trades - March 3, 2021 - PTON and SPCE

The Skinny On Options Math - March 3, 2021 - Why Normals Are Normal

Evidence all around us, from the volatility skew to the empirical distribution of returns, shows that the Black-Scholes model assumption of normally distributed returns is flawed.  Today we investigate why, despite this, the normal distribution remains the most ubiquitous and safest assumption to make in an uncertain world.

The Skinny On Options Math - March 3, 2021 - Why Normals Are Normal

Evidence all around us, from the volatility skew to the empirical distribution of returns, shows that the Black-Scholes model assumption of normally distributed returns is flawed.  Today we investigate why, despite this, the normal distribution remains the most ubiquitous and safest assumption to make in an uncertain world.

What's Your Assumption? - March 3, 2021 - An AAPL-TSLA Pair

What's Your Assumption? - March 3, 2021 - An AAPL-TSLA Pair

tasty Extras - March 3, 2021 - The Return of Crude

By looking at IV Rank and nothing else to judge trading opportunities, you may overlook underlyings that actually have some decent premium due to an unusual event that skewed the accuracy of metric you are using. We call the process of looking at the big picture and judging opportunities for ourselves “market awareness” and is the main reason why one of our mottos is “brains over bots”. In other words, don’t blindly follow one single metric and assume it is always representative of what you...

tasty Extras - March 3, 2021 - The Return of Crude

By looking at IV Rank and nothing else to judge trading opportunities, you may overlook underlyings that actually have some decent premium due to an unusual event that skewed the accuracy of metric you are using. We call the process of looking at the big picture and judging opportunities for ourselves “market awareness” and is the main reason why one of our mottos is “brains over bots”. In other words, don’t blindly follow one single metric and assume it is always representative of what you...

Demo Day - March 2, 2021 - March Overview

Nick showcases the tastyworks trading platform! Whether you're already an account holder or brand new to the platform, you'll be sure to pick up some helpful navigational tips!

Demo Day - March 2, 2021 - March Overview

Nick showcases the tastyworks trading platform! Whether you're already an account holder or brand new to the platform, you'll be sure to pick up some helpful navigational tips!

Research Specials LIVE - March 2, 2021 - Research Specials Live

Research Specials LIVE - March 2, 2021 - Research Specials Live

From Theory To Practice - March 2, 2021 - What Does Negative Extrinsic Value Mean in Tastyworks

As premium sellers, we always put ourselves in a position to benefit from the simple passage of time. We do this by primarily selling out-of-the-money options, which yields a positive theta that will slowly decay the position’s extrinsic value in our favor. But in the event that the position moves in-the-money, then our theta becomes negative, and that same extrinsic value decay works against us. In this situation, the extrinsic value in tastyworks will be shown as a negative number. In our...

From Theory To Practice - March 2, 2021 - What Does Negative Extrinsic Value Mean in Tastyworks

As premium sellers, we always put ourselves in a position to benefit from the simple passage of time. We do this by primarily selling out-of-the-money options, which yields a positive theta that will slowly decay the position’s extrinsic value in our favor. But in the event that the position moves in-the-money, then our theta becomes negative, and that same extrinsic value decay works against us. In this situation, the extrinsic value in tastyworks will be shown as a negative number. In our...

Futures Measures - March 2, 2021 - Covering Metals and Corn Iron Condors

Metals trading surely ain't broke, so Pete and Frank aren't fixing it! The futures dudes go back to what's been working in commodities. The guys look at long metals futures against gold calls, and they also add some long USD exposure to the mix with Small futures. Pete concludes the show by tossing on another iron condor in a corn market that won't stop moving! Take a look at all the futures trades this experienced trader is putting on today.

Futures Measures - March 2, 2021 - Covering Metals and Corn Iron Condors

Metals trading surely ain't broke, so Pete and Frank aren't fixing it! The futures dudes go back to what's been working in commodities. The guys look at long metals futures against gold calls, and they also add some long USD exposure to the mix with Small futures. Pete concludes the show by tossing on another iron condor in a corn market that won't stop moving! Take a look at all the futures trades this experienced trader is putting on today.

Small Stakes - March 2, 2021 - Three Ways to Trade Stocks and Bonds

Get in on a trade that's both as old as time and still fresh with opportunity: stocks vs bonds! Frank and Pete use Small futures to sell stocks and buy yields. The guys give some historical context for the trade, and they add some metrics that include correlations and trade ratios so that you can pick which variation of this old classic fits you best. Check out one of the oldest pairs trades in the book with Small Stocks futures against those of the Small Yield.

Small Stakes - March 2, 2021 - Three Ways to Trade Stocks and Bonds

Get in on a trade that's both as old as time and still fresh with opportunity: stocks vs bonds! Frank and Pete use Small futures to sell stocks and buy yields. The guys give some historical context for the trade, and they add some metrics that include correlations and trade ratios so that you can pick which variation of this old classic fits you best. Check out one of the oldest pairs trades in the book with Small Stocks futures against those of the Small Yield.

Lunch Money - March 2, 2021 - The Impact of Insiders

Hitha and Garrett cover a ton in this Tuesday episode of Lunch Money! Today's topics: NIO SPACs Market "Insiders," Insider Buying/Selling, and future market sentiment Nordstrom, AMC, and TGT Earnings Zoom's Revenue Guidance A Potential DraftKings Acquisition Unemployment Report this Friday Tesla Talk Hertz  Royal Caribbean Cruises  Abercrombie & Fitch Earnings

Lunch Money - March 2, 2021 - The Impact of Insiders

Hitha and Garrett cover a ton in this Tuesday episode of Lunch Money! Today's topics: NIO SPACs Market "Insiders," Insider Buying/Selling, and future market sentiment Nordstrom, AMC, and TGT Earnings Zoom's Revenue Guidance A Potential DraftKings Acquisition Unemployment Report this Friday Tesla Talk Hertz  Royal Caribbean Cruises  Abercrombie & Fitch Earnings

Options Trading Concepts Live - March 2, 2021 - Trading Tips for a Small Account

Nick and Katie explain how to approach options trading in a smaller account. They cover: Trade Size and Risk Per trade Strategy Selection Extrinsic Value Expectations Capital Allocation as a Percentage of Account Size

Options Trading Concepts Live - March 2, 2021 - Trading Tips for a Small Account

Nick and Katie explain how to approach options trading in a smaller account. They cover: Trade Size and Risk Per trade Strategy Selection Extrinsic Value Expectations Capital Allocation as a Percentage of Account Size

Market Measures - March 2, 2021 - Trading Credit to BPR

The IVR threshold for selling premium can be skewed up or down depending on the IV of the past year. One way to account for this skew is to cross-reference the IV index of an underlying with its IVR. However, not all instruments have an IV index available. Is there another way to account for this skew? Join Tom and Tony as they discuss how to trade short, 16Δ strangles using the credit-to-BPR ratio.

Market Measures - March 2, 2021 - Trading Credit to BPR

The IVR threshold for selling premium can be skewed up or down depending on the IV of the past year. One way to account for this skew is to cross-reference the IV index of an underlying with its IVR. However, not all instruments have an IV index available. Is there another way to account for this skew? Join Tom and Tony as they discuss how to trade short, 16Δ strangles using the credit-to-BPR ratio.

tasty Extras - March 2, 2021 - Strangle Breach

As a premium selling strategy, a strangle is the combination of a short Call and a short Put.  Ideally the price stays within the short strikes.  Today we will conduct a study to see how much time on average it takes for the price to breach the short strikes. Also, we will examine the power of managing options trades early.

tasty Extras - March 2, 2021 - Strangle Breach

As a premium selling strategy, a strangle is the combination of a short Call and a short Put.  Ideally the price stays within the short strikes.  Today we will conduct a study to see how much time on average it takes for the price to breach the short strikes. Also, we will examine the power of managing options trades early.

Options Jive - March 2, 2021 - Empirical vs Theoretical Returns

Options pricing models are based on theoretical models for the returns on underlyings. Today Tom and Tony explore the empirical distribution of underlying returns and compare it to the Black-Scholes model.

Options Jive - March 2, 2021 - Empirical vs Theoretical Returns

Options pricing models are based on theoretical models for the returns on underlyings. Today Tom and Tony explore the empirical distribution of underlying returns and compare it to the Black-Scholes model.

Bootstrapping In America - March 1, 2021 - David Rabie of Tovala

Tovala was born from a mission to reinvent home cooking to save people time. Since his first appearance on the show, they have raised $68.6M. Launched in 2017 by co-founders, David Rabie and Bryan Wilcox, Tovala’s fresh, chef-crafted meals and smart oven work together to let customers enjoy a delicious, home-cooked meal without the work.  Each meal requires one minute of prep time before the Tovala Smart Oven scans and cooks it perfectly in 20 minutes or less. The company has been featu...

Bootstrapping In America - March 1, 2021 - David Rabie of Tovala

Tovala was born from a mission to reinvent home cooking to save people time. Since his first appearance on the show, they have raised $68.6M. Launched in 2017 by co-founders, David Rabie and Bryan Wilcox, Tovala’s fresh, chef-crafted meals and smart oven work together to let customers enjoy a delicious, home-cooked meal without the work.  Each meal requires one minute of prep time before the Tovala Smart Oven scans and cooks it perfectly in 20 minutes or less. The company has been featu...

WDIS: Two Yutes - Beginner Options Trading - March 1, 2021 - Selling Into Strength

Today, Errol and Kay are benefiting from what Tom calls a “dead cat bounce,” in which during a wider scale sell-off, a little market bounce suckers everyone into getting bullish. He instructs the influencers to “sell into strength”--get short when an underlying stock price goes up. The kids put their own respective bearish trades on, selling into strength: Kay puts on a short call spread in ULTA and a bearish ARKK skewed iron condor. Errol puts on a short call spread in BIDU and goes long...

WDIS: Two Yutes - Beginner Options Trading - March 1, 2021 - Selling Into Strength

Today, Errol and Kay are benefiting from what Tom calls a “dead cat bounce,” in which during a wider scale sell-off, a little market bounce suckers everyone into getting bullish. He instructs the influencers to “sell into strength”--get short when an underlying stock price goes up. The kids put their own respective bearish trades on, selling into strength: Kay puts on a short call spread in ULTA and a bearish ARKK skewed iron condor. Errol puts on a short call spread in BIDU and goes long...

From Theory To Practice - March 1, 2021 - Reducing Margin Requirements on Naked Positions

With the potential for unlimited losses, undefined-risk option strategies always carry more risk than defined-risk option strategies. As a result, the margin requirements on these naked positions will always be greater (and can expand over time). However, if we take a minute to better understand the risk dynamics, we clearly see how we can adjust our naked positions to lessen the buying power impact. In our current portfolio, we see how to do just that with our potential DIS trade.

From Theory To Practice - March 1, 2021 - Reducing Margin Requirements on Naked Positions

With the potential for unlimited losses, undefined-risk option strategies always carry more risk than defined-risk option strategies. As a result, the margin requirements on these naked positions will always be greater (and can expand over time). However, if we take a minute to better understand the risk dynamics, we clearly see how we can adjust our naked positions to lessen the buying power impact. In our current portfolio, we see how to do just that with our potential DIS trade.

Futures Measures - March 1, 2021 - Rate Butterflies and Oil Iron Condors

The futures dudes go heavy on the wings for today's episode as Pete puts on butterflies in rates and iron condors in crude oil.  Follow the guys as they dive into an active Monday of trading everything from stocks and bonds to currencies and commodities.  They see a ton of activity coming in the days to follow, and so they get at it early.

Futures Measures - March 1, 2021 - Rate Butterflies and Oil Iron Condors

The futures dudes go heavy on the wings for today's episode as Pete puts on butterflies in rates and iron condors in crude oil.  Follow the guys as they dive into an active Monday of trading everything from stocks and bonds to currencies and commodities.  They see a ton of activity coming in the days to follow, and so they get at it early.

Small Stakes - March 1, 2021 - The Butterfly Spread in Futures

Do you think one the loneliest number? Is two as bad as one? Well, surely three is enough! Frank and Pete build the three-legged butterfly spread on today's show. The guys use the new Small Yield Curve futures to put three distinct markets into one cohesive idea. Frank views the trade as two spreads coming together in the same way two markets come together in a pairs trade. Find out all about the futures butterfly spread, and see if a three-legged interest rate trade is your portfolio's typ...

Small Stakes - March 1, 2021 - The Butterfly Spread in Futures

Do you think one the loneliest number? Is two as bad as one? Well, surely three is enough! Frank and Pete build the three-legged butterfly spread on today's show. The guys use the new Small Yield Curve futures to put three distinct markets into one cohesive idea. Frank views the trade as two spreads coming together in the same way two markets come together in a pairs trade. Find out all about the futures butterfly spread, and see if a three-legged interest rate trade is your portfolio's typ...

Lunch Money - March 1, 2021 - Pot Stocks and Payment for Order Flow

In this brand-new series, Hitha Herzog and Garrett Baldwin hit on the latest market headlines, trade activity, and business bulletins.  Today's Topics: The Cannabis Industry The Upcoming Unemployment Report TGT Earnings Warren Buffett Toyota GM

Lunch Money - March 1, 2021 - Pot Stocks and Payment for Order Flow

In this brand-new series, Hitha Herzog and Garrett Baldwin hit on the latest market headlines, trade activity, and business bulletins.  Today's Topics: The Cannabis Industry The Upcoming Unemployment Report TGT Earnings Warren Buffett Toyota GM

Options Trading Concepts Live - March 1, 2021 - Leveraged Products Basics

Nick and Katie define and explain leveraged ETFs and ETNs. They discuss the role of drag/drift in these products, whether or not they should be used as long-term trade ideas, and where the "risk" is in these types of products.

Options Trading Concepts Live - March 1, 2021 - Leveraged Products Basics

Nick and Katie define and explain leveraged ETFs and ETNs. They discuss the role of drag/drift in these products, whether or not they should be used as long-term trade ideas, and where the "risk" is in these types of products.

The Skinny on Options: Abstract Applications - March 1, 2021 - Price Impact Velocity

Every tastytrader knows that markets fall faster than they rise - a phenomenon that is supported by the downside volatility skew that persists in equity index products. But interestingly, another reason to support the propensity for markets to fall so quickly could be the speed with which market makers drop their bid prices in falling markets relative to raising their offer prices in rising markets. A price impact analysis of institutional trade data from the internet bubble supports this as...

The Skinny on Options: Abstract Applications - March 1, 2021 - Price Impact Velocity

Every tastytrader knows that markets fall faster than they rise - a phenomenon that is supported by the downside volatility skew that persists in equity index products. But interestingly, another reason to support the propensity for markets to fall so quickly could be the speed with which market makers drop their bid prices in falling markets relative to raising their offer prices in rising markets. A price impact analysis of institutional trade data from the internet bubble supports this as...

Market Measures - March 1, 2021 - Expected Performance Based on IV

Selling strangles has been profitable on average in all IV environments. However, lower IV periods tend to be much less profitable as a % of credit because short premium trades tend to see most of their outlier losses here. Premium sellers can, on average, collect 2-3x more as a % of their credit if they conduct most of their trades (and most of their capital) in higher IV environments.

Market Measures - March 1, 2021 - Expected Performance Based on IV

Selling strangles has been profitable on average in all IV environments. However, lower IV periods tend to be much less profitable as a % of credit because short premium trades tend to see most of their outlier losses here. Premium sellers can, on average, collect 2-3x more as a % of their credit if they conduct most of their trades (and most of their capital) in higher IV environments.

Best Practices - March 1, 2021 - Measuring Profit Potential

A quantitative approach to understanding an accounts profit potential is essential. Some key metrics we use include: Portfolio Beta-Weighted Delta Extrinsic Value Overall POP Join Tom and Tony today as they explain each one in detail.

Best Practices - March 1, 2021 - Measuring Profit Potential

A quantitative approach to understanding an accounts profit potential is essential. Some key metrics we use include: Portfolio Beta-Weighted Delta Extrinsic Value Overall POP Join Tom and Tony today as they explain each one in detail.

First Call - March 1, 2021

First Call - March 1, 2021

Options Crash Course: Strategy Management - February 28, 2021 - Ratio Spread Management

A ratio spread is an options strategy wherein there is no risk to either the upside or the downside. Whether a trader uses call options or put options will determine where the risk is. Tune in as Dr. Jim Schultz walks through how to manage winning and losing ratio spreads.