tastylive: tastylive

A 10-year market study reveals significant differences in price volatility between ETFs and individual stocks. ETFs like SPY, IWM, QQQ and DIA experience outlier moves (defined as twice the daily expected move) only 1.6-2.3% of the time, with SPY going up to 567 days without a significant outlier. In contrast, individual stocks like Tesla, AMD, Palantir and Lululemon saw 81% more outlier events and spent 42% fewer days in calm periods compared to ETFs. Western Digital (WDC) showed the shortest period without outlier moves. The data supports selling premium on ETFs during low volatility periods, while individual stocks may offer better opportunities when implied volatility is high. This explains the current popularity of 0DTE SPX trading strategies among premium sellers.

Hosts Liz and Jenny conducted an entertaining Fast Market session starting with an ARCAT diagonal spread discussion that evolved from confusion over break-even targets below current stock price. The standout trades included adjusting their existing ETHA zebra position by adding a 26-43 strangle (despite Jenny's reluctance about calls against zebras), a KVUE 19-23 call spread for just 44 cents representing a potential "10-bagger," and an Apple $10-wide diagonal targeting 265 strike based on viewer Sina's bullish call. The session highlighted important lessons about account sizing when the hosts modified a viewer's preferred SPX $25-wide iron condor (collecting $5) to a $10-wide version (collecting $2.30) because the $2,000 risk represented too large a percentage of their account balance. Personal moments included Jenny sharing her Buxom Celeste lip gloss brand and Liz reminiscing about teaching options to Bob from Pepsi who had concentrated stock positions when it traded at $80 (now $150).

Sahil recommended a bearish euro position with a short call vertical, citing a four-day slide and 37% implied volatility rank. Gad suggested Oracle, which rose approximately $4, trading a bullish short put vertical strategy with $600 buying power requirement, leveraging ORCL's 63% IVR. Kai highlighted Micron for its extreme 50% price surge over the previous month, with a recommendation for a delta-neutral trade taking advantage of significant call skew. Finally, Dr. Data presented a simple short put strategy on Ethereum ETF (ETHA), noting the $18 billion fund's improved liquidity and high 73% IVR.

Utility stocks offer essential services like electricity, water, and gas, presenting a defensive option for investors seeking lower volatility. These stocks typically feature higher dividend yields with current annualized yields ranging from 2.7% to 4.3% and low 30-day implied volatility. XLU, a popular utilities ETF, demonstrates lower correlation to the broader market and smaller percentage swings during both rallies and drawdowns. While utilities can be negatively impacted by rising interest rates due to their high debt levels, they may become more attractive as rates decrease. With low correlation to both equities and bonds, utilities can effectively diversify portfolios.