JauneTom

Has passive investing "crossed the Rubicon?" Markets at all-time highs, a Fed in transition, and index rules quietly being rewritten. @profplum99 returns to On The Tape with @dmoses34 to explain why everything you thought you knew about passive flows may be changing. YouTube: youtu.be/XZGdmJTwqOE Apple: apple.co/4wsAN4S Spotify: tinyurl.com/phdb3j7h

Paul Tudor Jones predicted the 1987 crash, made $100 million, then spent years trying to destroy this footage you will watch him lose $6 million in one afternoon, sit in his chair and say "total devastation" then make it all back with 100% interest This documentary will change how you think about risk forever Bookmark & watch it. Then read the post below - $90 billion from being right just 54% of the time↓

Russian Urals crude is being sold at around $110 per barrel — more than double its price before the attack on Iran. Exempting Russian crude from US sanctions is either a deliberate strategic move (part of the plan) or a clear sign of desperation.

Selling volatility gets a bad reputation. But most people confuse it with doing something that exposes you to terminal risk. Although often used synonymously, selling uncapped convexity with an extreme tail nature to it is different than selling vol. There is absolutely nothing wrong with selling volatility as a trade. So here’s what you should look for and what you should avoid. There are many factors that you can look at to determine if you should be selling volatility. Simple implied vol over realized, extreme spot vol beta of a specific tenor due to an end user dislocation, etc. But the main and only thing that goes into this consideration is if the risk you are taking is well compensated. Naturally, short vol trades like selling puts will be a concave bet, but strategically certain moments in time warrant that. If someone tells you, “hey I’ll bet you my $1 to your $2 that if I spin this roulette wheel I will get 00,” you aren’t going to say “no, I won’t take that because it’s not a convex bet.” That would be misunderstanding the whole point of derivatives trading, which is to take bets in areas that are not priced accordingly. If you see that bet you would take it all day long because the bet on the table well compensates you for the minimal risk you are taking in relation to the odds. This is a core feature that separates good opportunistic short vol traders from the yield harvesting guppies that blow up every few years. So in summary, you want to sell vol when two main things are met. One, you have some statistical validation as to why you believe the future pricing will be lower. And two, you are being compensated for taking on that risk in a way that makes it economically feasible. Here’s what is something you should avoid. There are two main pockets where I see “vol sellers” deteriorate. The first one is the yield harvesters. This always ends the exact same way. You will get a system that sells vol indiscriminately, completely agnostic to value, but more focused on the target return it wants to yield. What this ends up doing is forcing the system or trader to sell vol at discounted prices and sell more units, which in turn takes on more risk in order to meet a target return. This shifts the seesaw in the direction of not being compensated enough for the embedded risk you are taking on. The other thing I often see is a psyche cope around put selling to generate income, with the view that they will just be executed long the stock. This sounds good until you operate in practice, mainly because the situation of a security changes on a second by second basis. You can say “hey if XYZ drops 20% in a week I will be a buyer.” Sure, but that is based on the current condition of XYZ. Now include some type of fraud concern and the appeal to be executed on your contract changes because the material facts have changed. As with many things in markets, you get paid to take risk. You have to risk it for the biscuit. But the baker does not have good deals every day. So make sure you are waiting for when the deals are good, and make sure you are not risking your mortgage for three day old stale bread.

We are witnessing a sharp rebound in the Yen, likely triggered by BOJ intervention, occurring simultaneously with a drop in oil prices—even in the absence of any specific bearish headlines. Of course this is partly linked to several pods initiating their exit strategies ahead of the Brent June contract expiry. However it is more plausible to approach this from the perspective of position unwinding and risk management mechanisms by macro funds and CTAs, rather than a shift in oil fundamentals. In a vacuum, a drop in USD/JPY typically exerts upward pressure on dollar-denominated oil prices. But when a liquidity shock—like the unwinding of the Yen carry trade—hits, this textbook inverse correlation between the dollar and commodities temporarily breaks down. The technical supply factor—forced liquidation by financial institutions—completely overwhelms any supply-demand or geopolitical fundamentals. One might ask, "Doesn't the Yen carry trade usually flow into US assets? The capital flow into oil isn't that significant, is it?" It’s true that pure Yen to Oil carry trades aren't the primary driver, as oil doesn't provide a fixed yield like bonds or dividend stocks. Furthermore it’s impossible to isolate the exact amount of Yen carry capital in the oil market, as COT reports only track position direction, not the funding currency. However once the Yen sees a short squeeze style rally, the real value of Yen-denominated debt spikes, leading to massive mark-to-market losses and margin calls. To meet these margin calls and keep their funds afloat, traders must sell whatever they can liquidate immediately. Selling illiquid OTC assets or assets with thin order books would result in massive slippage—and New York isn't even open yet. Consequently the oil futures market—one of the most liquid markets in the world—is treated like a global ATM, taking the brunt of mechanical sell-offs as funds scramble for cash. The commodity desks within these macro funds may have built large long positions based purely on the attractive roll yields from backwardation. But the backend funding that supports the entire fund's leverage included Yen short positions. When the Yen surged due to BOJ intervention, the VaR limits at the total fund level were breached. Desperate for USD liquidity, fund managers are hitting the bid on their most liquid and (thanks to backwardation) most profitable positions—oil—to crystallize gains and raise cash. Hedge funds typically operate with 4x-10x leverage. Since some of this massive liquidity is tied up as margin for commodity funds, the volume of oil being dumped during forced liquidations is powerful enough to completely bypass physical supply-demand fundamentals. Ultimately this must be viewed through the lens of pooled book management. As a macro Yen carry tantrum erupts, oil is being sacrificed as a victim of mechanical liquidity hunting, regardless of its own merits or market structure. #oott #iran $usdjpy

This is one of the most reliable post-earnings setups in the market, and it's invisible to anyone not watching the skew. Setup: a stock is rallying into earnings. Skew shifts hard toward calls. Implied vol on upside strikes is bid. Retail and momentum funds are piling into upside calls. What's happening underneath: dealers are short those calls. To hedge, they buy stock. Lots of it. The stock keeps grinding higher, partly because of the dealer demand. Earnings prints. Even if the number is decent, vol gets smashed. That's mechanical — earnings vol always resets. Now the dealers have a problem. The calls they're short have just lost their Greeks. The delta on those calls is collapsing ... so what was a 30-delta call yesterday is a 10-delta call this morning. The stock they bought to hedge those calls? They no longer need it. So they sell. If the earnings number wasn't strong enough to push the stock through those call strikes and keep the deltas alive, the unwind cascades. Vol crushed. Delta crushed. Dealer hedges dumped into the tape. The stock rolls over even though the report wasn't bad. This is why "good earnings" stocks sometimes drop 8% the next day. It isn't the news. It's the structural unwind. If you see skew piling into upside before a print, you know the setup is loaded. Whether to fade it is a separate question. But the mechanics are real, and shows up over and over. We saw it with $TSLA and are seeing it with $MSFT overnight.

Retail buys puts before earnings. Hedge funds buy put flies. Here's the gap. Outright put: you're long vol. Vol gets smashed on the print. Even if the stock drops 5%, the vol crush eats most of your gain. The put goes up on delta and down on vega. The two cancel. Put fly: you're long one put closer to spot, short two puts at your target zone, long one put below. You're net short vol on the structure. When vol gets smashed on earnings, the structure benefits from the crush instead of fighting it. Roughly. On a typical earnings, an outright put might cost you a few percent of stock notional. A well-built put fly costs a fraction of that. If the stock lands inside your target zone, the structure is built to pay multiples of the debit. If the stock blasts through, the fly caps your gain and the outright put pays more. So the question isn't "which is better." It's "what's the trade?" If you think the move will be roughly the implied move and you have a target zone, the fly. If you think the move will be 2x implied and you don't know where it lands, the put. Most earnings moves are inside or near implied. That's why the fly wins more often. The vol reset works for it instead of against it. That's the structural edge of the fly and why it's one of my preferred earnings trade expressions.

I often take the elite in America to task because of their disconnection from reality and their preference for fantasy outcomes. But there’s another, darker aspect to the elite as well: the absence of morals. When a retired general on national television can openly talk about assassinating leaders of our adversaries that reach conclusions we don’t like, and then he considers that “reasonable“ and none of the hosts on the network so much is bat an eye – that shows how far we have fallen from even pretending to care about morality. This war we chose to start violated the US Constitution, United States law, international law, and any norms of decency: we were not threatened, we did not fight war of self-defense, and utterly lied about the justification of an “imminent threat,” when 100% there was none. And now we’re talking about trying to resolve this war in our favor, by demanding surrender of the other side, and if they don’t comply, we have no moral qualms about assassinating their leaders. Again. Know this: a nation cannot behave like this and make that kind of behavior routine, and think that at some point, it will not come back to haunt us. Life has a habit of returning on your head the very thing that you do to others. I already mourn because of the loss that we’re going to suffer, but will not hesitate to point out at that time, that we ourselves lit the fuse of the day when people start assassinating American leaders.

Melania Trump says Jimmy Kimmel should be canceled. Last week her husband commented on Robert Mueller’s death: “Good. I”m glad he’s dead.” Said Pretty much the same about my old friend Rob Reiner. People who live in glass houses should’t throw shit.

Wow! The creators are 18 to 25 years old!

Starting in 1967, Suez canal remained closed for 8 years. (14 ships remained stranded) That's it, that's the tweet.

Kudos to Axios for supposedly wiretapping the Iranian Supreme Leader to confirm a green light, and to CNN for tracking Air Force Two to Islamabad as if it’s a done deal. This is what true journalism looks like these days: churning out endless streams of unverified fake news and never taking an ounce of responsibility for any of it. #oott #iran

Baghdad Barbie, lmao who did this?

𝗧𝗵𝗲 𝗰𝗮𝗹𝗹 𝗿𝗮𝘁𝗶𝗼 𝗯𝗮𝗰𝗸𝘀𝗽𝗿𝗲𝗮𝗱 I did one of these on QQQ last week as I was taking some profit on ITM calls. Here's why I reach for it after a market has already moved. A call ratio backspread is short one near call and long two calls further out. You're selling one OTM call to fund two more OTM ones. Normally you pick strikes to make it near zero cost. The beauty is the profile. At entry, you have almost no delta. If the market immediately sells off, you're barely bleeding. Premium spent is close to zero. If the market continues to rip, you pick up delta and gamma aggressively. The long side of the ratio takes over and the trades can be explosive. It's basically a free option on continuation. Provided implied vol doesn't collapse on the rally. Paying almost nothing for exposure to the upside tail if the move extends. The one trap: the valley of death between your short strike and long strikes near expiry. Rule is simple. Don't let it get too close to expiry where your THETA explodes if you are near your long strikes. Roll it out or cut the trade with 2 weeks to go. This is the structure I reach for when a directional view is already partially priced and I want exposure to continuation without paying up for it....and vol looks floored on the rally.

Tim Cook donated $1M to Trump’s inauguration. He fawned over Trump and gifted him a 24-karat gold plaque (as Apple lobbied for tariff exemptions). Apple donated to Trump’s ballroom. And it removed ICE tracking apps from its stores after a demand from the DOJ. Remember this.

NEW: Iranian Parliament Speaker Mohammad Bagher Ghalibaf appears to be engaged in a serious intra-regime debate with Islamic Revolutionary Guards Corps (IRGC) Commander Major General Ahmad Vahidi and other senior regime officials opposed to negotiations with the United States. Vahidi appears to have the upper hand over Ghalibaf at the moment. Vahidi is reportedly the only Iranian official with direct access to Supreme Leader Mojtaba Khamenei and is serving as a conduit for relaying key decisions to other regime officials, according to Israeli media on April 19. US and Iranian delegations will reportedly meet in Islamabad, Pakistan, for a second round of talks in the coming days. US and Iranian demands appear to have largely stayed the same, however. The US Navy continued to enforce its blockade of Iranian ports, directing 27 vessels to change course since the start of the blockade. US forces likely forced two Iranian-linked vessels attempting to violate the Navy’s blockade to turn around. The Khatam ol Anbia Central Headquarters claimed that the April 19 seizure of the Iranian-flagged, US-sanctioned Touska by the US Navy violated the US-Iran ceasefire. Unspecified security sources told Reuters that the Touska was likely transporting dual-use items from China to Iran. The Iranian Parliament is attempting to formalize Iranian “control” over the Strait of Hormuz by drafting a bill that would ban Israeli-linked vessels from transiting the Strait of Hormuz, require vessels from “hostile countries” to obtain approval from Iran’s Supreme National Security Council to transit the strait, and bar states that “caused damage” to Iran from transiting the strait until they paid reparations to Iran.

IRIB SAID NO IRANIAN DELEGATION, PRIMARY OR SECONDARY, HAD TRAVELED TO ISLAMABAD AND THAT REPORTS ABOUT THE DEPARTURE OF IRANIAN OFFICIALS, INCLUDING CLAIMS ABOUT MEETING TIMES, WERE NOT ACCURATE.

Good job to everyone who thought the strait won't be open any time soon and there wouldn't be an immediate resolution to the war. This is a great example of being smart but not wealthy. 😂

A video is going viral of President Obama and Mayor Mamdani singing wheels on the bus with kids in a NYC school. There is literally not one person alive in the entire Republican Party who measures up to either of these two people.

Because we get asked a lot. The Technological Republic, in brief. 1. Silicon Valley owes a moral debt to the country that made its rise possible. The engineering elite of Silicon Valley has an affirmative obligation to participate in the defense of the nation. 2. We must rebel against the tyranny of the apps. Is the iPhone our greatest creative if not crowning achievement as a civilization? The object has changed our lives, but it may also now be limiting and constraining our sense of the possible. 3. Free email is not enough. The decadence of a culture or civilization, and indeed its ruling class, will be forgiven only if that culture is capable of delivering economic growth and security for the public. 4. The limits of soft power, of soaring rhetoric alone, have been exposed. The ability of free and democratic societies to prevail requires something more than moral appeal. It requires hard power, and hard power in this century will be built on software. 5. The question is not whether A.I. weapons will be built; it is who will build them and for what purpose. Our adversaries will not pause to indulge in theatrical debates about the merits of developing technologies with critical military and national security applications. They will proceed. 6. National service should be a universal duty. We should, as a society, seriously consider moving away from an all-volunteer force and only fight the next war if everyone shares in the risk and the cost. 7. If a U.S. Marine asks for a better rifle, we should build it; and the same goes for software. We should as a country be capable of continuing a debate about the appropriateness of military action abroad while remaining unflinching in our commitment to those we have asked to step into harm’s way. 8. Public servants need not be our priests. Any business that compensated its employees in the way that the federal government compensates public servants would struggle to survive. 9. We should show far more grace towards those who have subjected themselves to public life. The eradication of any space for forgiveness—a jettisoning of any tolerance for the complexities and contradictions of the human psyche—may leave us with a cast of characters at the helm we will grow to regret. 10. The psychologization of modern politics is leading us astray. Those who look to the political arena to nourish their soul and sense of self, who rely too heavily on their internal life finding expression in people they may never meet, will be left disappointed. 11. Our society has grown too eager to hasten, and is often gleeful at, the demise of its enemies. The vanquishing of an opponent is a moment to pause, not rejoice. 12. The atomic age is ending. One age of deterrence, the atomic age, is ending, and a new era of deterrence built on A.I. is set to begin. 13. No other country in the history of the world has advanced progressive values more than this one. The United States is far from perfect. But it is easy to forget how much more opportunity exists in this country for those who are not hereditary elites than in any other nation on the planet. 14. American power has made possible an extraordinarily long peace. Too many have forgotten or perhaps take for granted that nearly a century of some version of peace has prevailed in the world without a great power military conflict. At least three generations — billions of people and their children and now grandchildren — have never known a world war. 15. The postwar neutering of Germany and Japan must be undone. The defanging of Germany was an overcorrection for which Europe is now paying a heavy price. A similar and highly theatrical commitment to Japanese pacifism will, if maintained, also threaten to shift the balance of power in Asia. 16. We should applaud those who attempt to build where the market has failed to act. The culture almost snickers at Musk’s interest in grand narrative, as if billionaires ought to simply stay in their lane of enriching themselves . . . . Any curiosity or genuine interest in the value of what he has created is essentially dismissed, or perhaps lurks from beneath a thinly veiled scorn. 17. Silicon Valley must play a role in addressing violent crime. Many politicians across the United States have essentially shrugged when it comes to violent crime, abandoning any serious efforts to address the problem or take on any risk with their constituencies or donors in coming up with solutions and experiments in what should be a desperate bid to save lives. 18. The ruthless exposure of the private lives of public figures drives far too much talent away from government service. The public arena—and the shallow and petty assaults against those who dare to do something other than enrich themselves—has become so unforgiving that the republic is left with a significant roster of ineffectual, empty vessels whose ambition one would forgive if there were any genuine belief structure lurking within. 19. The caution in public life that we unwittingly encourage is corrosive. Those who say nothing wrong often say nothing much at all. 20. The pervasive intolerance of religious belief in certain circles must be resisted. The elite’s intolerance of religious belief is perhaps one of the most telling signs that its political project constitutes a less open intellectual movement than many within it would claim. 21. Some cultures have produced vital advances; others remain dysfunctional and regressive. All cultures are now equal. Criticism and value judgments are forbidden. Yet this new dogma glosses over the fact that certain cultures and indeed subcultures . . . have produced wonders. Others have proven middling, and worse, regressive and harmful. 22. We must resist the shallow temptation of a vacant and hollow pluralism. We, in America and more broadly the West, have for the past half century resisted defining national cultures in the name of inclusivity. But inclusion into what? Excerpts from the #1 New York Times Bestseller The Technological Republic: Hard Power, Soft Belief, and the Future of the West, by Alexander C. Karp & Nicholas W. Zamiska techrepublicbook.com