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0 DTE Options No Problem? | Jay Powell’s Wyoming Speech Points to More Interest Rate Hikes?

By Derek Moore

Show Summary:

Derek Moore is joined by Jay Pestrichelli, CEO of ZEGA Financial, to discuss the Bank of America piece saying maybe Goldman Sachs got 0 DTE option effects wrong. Plus, what did Jay Powell’s speech mean if anything? New Fed Funds futures probabilities point to the Fed raising yet again. Then, they go through some odds and ends like how participation in employment surveys is dropping, the high Atlanta Fed GDP now numbers, and more.

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 Topics Include:

  • The Fed on track for more interest rate hikes?
  • Jay Powell will do what needs to be done!
  • Fed Funds futures probabilities
  • What are 0 DTE Options?
  • Bank of America says 0 DTE options were not the cause of a late-day market drop.
  • Explaining how market makers hedge based on delta.
  • Interest rates and the cost of carry in option prices
  • Small discussion on what option Gamma is.
  • Liquidity in the options market
  • What is the Atlanta Fed GDP Now indicator?
  • Surprising Q3 GDP Now reading over 5.7%
  • What is the establishment employment survey?
  • Dropping participation rate of the unemployment surveys

 Mentioned in this Episode:

Bank of America Disputes Goldman Logic on Zero-Day Option Threat to Stocks 

S&P 500 Forward PE Valuations vs Future Returns | Volatility in Stock & Option Markets 

Everyone Wrong on Interest Rates and what Fed Funds Probabilities Mean

Fed Funds CME probability tracker tool 

 Jay Pestrichelli’s book Buy and Hedge 

 Derek’s new book on public speaking Effortless Public Speaking 

 Derek Moore’s book Broken Pie Chart