Derek does a deep dive asking the question why is everyone rooting for the Fed to lower rates? If the Fed must lower interest rates, doesn’t that mean there is trouble? Should investors instead be rooting for stable but higher rates where the long end un-inverts as a proxy for higher growth?
Derek and Jay ponder whether the Fed is truly done and if the street is too optimistic on rate cuts in 2024. Plus, they discuss new data showing option selling ETFs are having record assets between inflows and new entrants.
HiPOS Conservative Trade Update - With only 8 trading days left until expiration, the primary HiPOS trade is sitting with an unrealized profit despite the market being down from where it was on entry.
ZEGA is excited to be attending Charles Schwab’s conference in Philadelphia. While appearing at the conference, Jay was able to speak with Oliver Renick from the Schwab Network about volatility in today’s markets.
Derek and Jay discuss whether Jay Powell or bond traders are in charge of interest rate policy? How option volatility changes around earnings announcements.