Tony and Nicky discuss market conditions during Confirm and Send, noting the S&P down 5 handles near daily lows with volatility up slightly. Silver jumped over 3% to $70/oz while gold gained $33, narrowing the gold-silver ratio to below $64, its lowest level in recent memory. The hosts tackle questions about investing in private companies like Starlink (impossible for retail traders), AI market frothiness (real technology but potentially overvalued), zero-day SPX iron condor management strategies, and trading psychology. Both hosts note they're running lighter positions than usual with volatility collapsed, with Tom carrying about one-third his normal delta exposure. They emphasize mechanical trading approaches based on IV environments rather than trying to predict macro risks or market catalysts.
Nick and Tony expect S&P 500 trading to stay within a range, potentially reaching 7,000 by year-end with low volume and volatility. Current market shows S&Ps up 28 points and NASDAQ up 159. The Confirm and Send segment addressed key options questions including gamma risk, which increases near expiration when options must ultimately become either 0 or 100 delta. Nick and Tony emphasized following mechanical trading processes to mitigate this risk. Additional questions covered liquidity constraints in options trading, pin risk at expiration, volatility of volatility (VVIX), correlation spikes during market pullbacks, and theta acceleration near expiration. Nick and Tony consistently emphasized practical applications over theoretical discussions: "I love the high-level discussion about options and volatility, but at the end of the day, what strategy are you going to use to capture that?"
The market rebounded with S&P up 54 points to 6833 after yesterday's orderly decline. NASDAQ led gains at 1.3%, while Bitcoin surged 4% to $89,200. Options expirations loom with SPY, TLT, and diamonds facing dividend impacts. During Confirm and Send, Nick and Tony addressed viewer questions about portfolio hedging strategies. They emphasized that Delta positioning should align with directional assumptions rather than following arbitrary numbers, recommending 500-600 Deltas (long or short) for a typical $120,000 account. The pair also tackled whether to sell strangles versus puts alone, suggesting traders could simply sell put options or implement call spreads to define upside risk during bullish market conditions. On Bitcoin's recent decline, they attributed it to broader liquidity issues and reduced speculation rather than specifically blaming Japanese interest rate policies, noting that Bitcoin's 40% move aligns with its 60-70% implied volatility.
S&P futures retreated from all-time highs, down 25 points after yesterday's 50-handle upside move. Research indicates markets typically see a 24-48 hour reversion after Fed announcements. The 6850 handle remains a critical mean level for December trading. Oracle (ORCL) fell below $193, dragging down tech stocks and the Nasdaq, which dropped 50 points. Meanwhile, Bitcoin declined $2,500 to around $89,500, with Ethereum experiencing even steeper percentage losses. Silver continued its remarkable run, surging 3% to over $63/oz, further compressing the gold-silver ratio to 67.5. Oil dropped 88 cents, vindicating bearish outlooks, while the dollar weakened against both the euro and yen.
Market remained largely unchanged ahead of the Federal Reserve's interest rate announcement, with S&P, NASDAQ, Russell, and Dow showing minimal movement. Volatility indicators suggest a potential grind before significant action occurs following the Fed decision. Despite expectations of interest rate cuts, bonds and notes traded lower, contradicting their typical inverse relationship with rates. Bitcoin dipped to $62,000 while Ethereum held steady. For investors concerned about hedging long delta portfolios against sudden market drops, futures contracts offer the most capital-effective solution. Experts recommend under-hedging (25-50%) rather than attempting to fully neutralize positions. Trading activity on Fed meeting days typically shows less volatility compression than normal, suggesting traders should consider reducing position sizes and taking quicker profits during these events.
Gold prices fell $12 while silver dropped 38 cents, creating trading opportunities in the metals pair. Nick and Tony executed a profitable gold-silver ratio trade, taking $500 profit before re-entering a similar position at favorable levels. Equities showed modest gains with the Russell 2000 leading (+0.5%), while the S&P 500 and NASDAQ rose about 0.25%. The Dow lagged, barely positive. Volatility remained unchanged at historically low levels, complicating premium-selling strategies. Bitcoin rebounded to just over $92,000 after dipping below $90,000 over the weekend, with Ethereum (+4%) outperforming Bitcoin (+2.5%). Natural gas fell significantly (-5%). The segment addressed questions about beta-weighted deltas (providing portfolio context against market benchmarks), VVIX (the "fear of fear" index currently showing complacency), and leveraged product drag (costs associated with futures rolling in leveraged ETFs).
Tom and Nicky dive into market analysis and viewer questions on today's Confirm and Send segment. S&P futures reversed from slight gains to trade down $8.75, with volatility holding steady at 17.63. Oracle (ORCL), up $4 to $122.18, caught their attention with upcoming earnings. The hosts addressed selecting optimal delta levels for option strangles, recommending 20-delta positions as the sweet spot for most situations. They emphasized flexibility based on time to expiration—possibly using 16-delta for longer timeframes and 30-delta for shorter windows. On setting trading goals, both advised against rigid return targets, suggesting traders focus on matching strategies to market conditions rather than arbitrary benchmarks. They also covered proper management of illiquid option spreads and debated whether 24/7 trading might eventually extend beyond cryptocurrency markets.
The market remains robust with S&Ps up 18 points, and the Russell leads with a half-percent gain. Volatility decreased to 17.90, with bonds slightly up at 116.18. Bitcoin continues to rise, nearing $94,000, while Ethereum shows gains around 3,100. Nick and Tony discussed selling puts in oil and adjusting gold-silver ratios as silver outperforms gold. Key questions addressed include rolling short options in high vs. low volatility and managing delta in strangles based on implied volatility rank.