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Stock Splits, Elon Musk, 0DTEs and so much more in this week's recap

By:Ryan Gaynor

A weekly roundup of tastylive videos offers the best trading tips from the network’s wealth of financial shows


We have been Trading 0DTEs Wrong All Along ... This is Why | Options Backtest

In this week’s Market Measures, Tom Sosnoff and Tony Battista explore the intriguing dynamics of market behavior, focusing on disparities between morning and afternoon movements in the S&P 500 index (SPX). Analysis of past-year data reveals a notable trend: The SPX often dips in the morning, only to rebound just before close.

Surprisingly, the opening VIX level doesn't dictate market direction but offers insights into the magnitude of moves. For traders, especially those in zero DT options, staying vigilant post-noon is crucial because of potential rapid shifts. These insights challenge norms, emphasizing the importance of data-driven strategies for navigating intraday fluctuations.

This is the Only Metric Needed to Evaluate Risk | Options Backtest

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Sosnoff and Battista embark on a deep dive into the intricacies of option trading strategies, specifically examining the evolution of theta (premium decay) in short option positions over time. Using data from SPY options over ten years, they compare delta-neutral strangles (undefined risk) and iron condors (defined risk) with 45 days to expiration. The analysis reveals that while undefined risk trades start with more theta per credit, they also exhibit greater volatility and require vigilant monitoring. Defined risk trades offer less initial theta but involve slower risk progression. Managing positions early is crucial, especially as expiration nears.

Elon Musk Just Changed Business Forever

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In a lively discussion on tastylive, Victor Jones and the hosts delve into the contentious topic of Elon Musk's compensation package, which is up for a proxy vote. They explore the implications for Tesla shareholders, the role of precedent in CEO compensation, and the market's reaction to the impending decision. Despite differing views on Musk's commitments and the fairness of the package, they agree that the outcome will impact both Tesla's trajectory and future corporate governance debates. The conversation highlights the complexity of aligning incentives with shareholder interests and the challenges of regulating visionary founders.

Ryan Gaynor is a video content specialist at tastylive.

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