00:00 President
The uncertainty remaining the word on the volatility of the street has entered a new phase. So how should the options of options tackle the exchange rules of the volatility game? Boycrest Managing Director David Bool is now joining the Playbook options sponsored by Tastytrade. David, it's great to see you. So you say here, David, Vix 30 is the new 20. What do you mean by that, David? Browse us.
00:35 David Bool
Well, investors have become very comfortable in the past year, really since Cavid, these kinds of remains in this range in the middle of adolescence. And then if there is a kind of panic, a kind of reason for the risk, it increases above 20, sometimes reached 30, sometimes even higher, but the sale is as serious as the tip is higher. We saw it in August 2024. It's different. I would compare it more to this in the shock coded from the point of view of volatility where you get the big step up to 30, in FIF in the 1940s, then we just have a new basic base. It is also very similar in that there is a lot of risk of title on the market where we exchange tweets from Trump and UH that he publishes. Similar to Covid where it is any UH press article can move the market. It is almost more important than economic data and real gains. We saw Netflix earlier only moving 5% after its report on results. It is a little less than what the gains provided for this decision today. So, but you know, a Trump tweet over the weekend could move many more markets. So, when I think back that Vix did for Covid, he stayed above 30 uh and really did not return below 20 before the year from the initial tip. I think investors will just get used to this Vix fork around 30, which implies a movement of about 2% each day. UM and that's a bit what we saw in April and I think that's there to stay. It is not a reference, it is a new diet in which we are.
03:06 President
So, while we sit in a higher volatility environment, perhaps uh structurally, at least for a while, where are the opportunities you see on the market to take advantage of Uh through options?
03:33 David Bool
So, for customers, I tell myself that the meeting is a bit in No Man's Land here. It is at 30, so you know, if many had a time machine, they would love to go back and buy a lot of premium options when Vix was 15 years old, but now these options are a little more expensive. UM II See customers, some of them are a little frozen where they say, wow, the hedges are a little too expensive to buy here with VIX above 30. UM and many are petrified to sell wall to angle it lower. He does not agree. I think there are opportunities on both sides. If you get a little more intelligent with the way you structure the trades, I think you want to play a fork on each side and you can use part of this costly volatility in our favor when we structure the positions while keeping it limited to the spent premium. It is very important. I do not suggest that you sell a VIX 40 strike call and that you are likely to explode risks, but I see people who seek to fade volatility in the 1920s, average 20, lower from the 1920s with uh, flies on vix. I think these are interesting and I also think that there are trades related to the distribution area to put hedges here where you can be paid, you know, five, six, seven times your money in a very realistic range.
05:37 President
David, speaking in advance, Tesla Gains we deck next week. Has, is there a job there, David, to guide us?
05:52 David Bool
Tesla is really interesting. Speaking of trading in a range, it was not in its own Tesla range, which is around $ 50, it can be more maybe $ 60 on each side of 240 where it is closer to the place where it has closed today. Um the feeling is quite horrible in Tesla, especially where I am here in California, and I have the impression that a lot of bad news can be evaluated in the stock and this has gone from 500 to 240. You know, he has seen an interesting propagation of calling an uh, you know, potential go up to the main range of the range earlier this week. So, the trade that I would benefit from UM if the stock increases is April 25, next Friday, 265, 285 compromises. UM you risk around $ 2.75. It is not much premium to be able to benefit from about seven times your payment in money if the action dates back to the increase. It is more or less that you get an exhibition at a fork up 10, up 20%. UM therefore while the stock was lower, five of the last prints on the profits, when it increases, it really goes up. There was therefore a decision up 20%, a move up 12%, etc. So, if you think that the profits next week are a bit of a room flip, I like to take this piece flip and be paid for five, six, seven times with money if this payment strikes.
08:24 President
David, great to see you and have you in the series today. THANKS.
08:30 David Bool
THANKS.
