Percy

Trade idea that I published to my shower thoughts channel: Korean Index volatility arbitrage and taking advantage of Black-Scholes models. $EWY long options seem mispriced. This is Blackrock's Korea Index, which is majority memory (Samsung Electronics, Sk Hynix). The stock swings 2-5+% a day, and is up 136.25% 1Y, despite priced like a normal index IV. Samsung is volatile. SK Hynix is volatile (eg. 65% - 80% est). But the combination of the two through the index is priced way less than both low beta $GOOGL (37.33%) and $AMZN (39.12%) at ~32% IV. I've been watching $EWY for a bit and it does look volatile. As for pricing my guess is MMs priced in IV based on historical averages (5-10 years), where the Korean index was completely flat. And were expecting calls 2 years out to revert to the mean. But this volatility should be the new norm as markets price in the new memory supercycle (eg. $TSM went from 30% IV to 46.2% IV). Long calls should benefit from both Samsung + Sk Hynix carrying the index. And the main benefit is vega expansion that you won't get from $KORU. You also can't get this option MM pinning like individual US stocks since this is Korea's national index and long term. TLDR: Individual components SK Hynix + Samsung are highly volatile. They're basically half of the index, but options in index are priced with low volatility, perhaps due to historical 5-10 year data. Long calls benefit from vega expansion that weren't priced in correctly as MM forward vol estimates are anchored too heavily on historical realized vol, which was low for $EWY over the past 5-10 years

$LLY RETATRUTIDE SHOWS 30.3% AVERAGE WEIGHT LOSS IN PHASE 3 EXTENSION Retatrutide is Lilly’s investigational triple agonist targeting GIP, GLP-1 and glucagon receptors. In TRIUMPH-1, Lilly studied 2,339 adults with obesity or overweight and at least one weight-related condition, excluding diabetes. 80-week results: 12 mg: -70.3 lbs, or -28.3% 9 mg: -64.4 lbs, or -25.9% 4 mg: -47.2 lbs, or -19.0% Placebo: -5.5 lbs, or -2.2% In the 12 mg group, 45.3% of patients lost 30% or more of body weight. 65.3% reached a BMI below 30 after 80 weeks. In the 104-week extension, patients continuing 12 mg lost an average of 85.0 lbs, or 30.3%. Most common side effects were nausea, diarrhea, constipation and vomiting. Discontinuation due to adverse events: 4 mg: 4.1% 9 mg: 6.9% 12 mg: 11.3% Placebo: 4.9% Retatrutide is still investigational and only available in Lilly clinical trials.

Nothing feels better than your thesis on a stock playing out… $NBIS TO THE MOON 🚀

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