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Does Inflation Still Matter? | Make More by Losing Less? | Volatility and Cost of Hedging | Someone Buys a lot of VIX Calls

By Derek Moore

Show Summary:

Derek Moore is joined once again by ZEGA Financial CEO Jay Pestrichelli to debate whether inflation still matters to the market. Plus, even though stocks like META are up huge off the bottom, they still are down from their prior highs. Why this shows the power of losing less through proper hedging and how it can potentially increase returns during volatile times. Speaking of volatility, they discuss the state of Vol in the markets including the VIX and why volatility isn’t lower considering the market run. Finally, they illustrate the cost of hedging downside risk in individual stocks like Nvidia, Tesla, and more. Finally, before some recommendations, they showcase the report of a huge buy of VIX October calls.

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Topics Include:

  • The CPI Consumer Price Index inflation report and ramifications
  • Does inflation even matter to markets? 
  • META/Facebook is still down -20% from its 2021 high despite being up 250% off the bottom.
  • How much you must make to overcome large losses.
  • Cost of hedging annualized for individual stocks like Tesla and Nvida as examples.
  • How to look at the cost of hedging
  • So why isn’t the VIX Index lower considering markets are at 1-year highs.
  • Comparing short term VIX vs normal VIX levels
  • Evaluating a big purchase of October VIX calls on the VIX future.
  • VIX futures vs spot VIX (the one you see on CNBC)

 Mentioned in this Episode:

 Short Sellers Give Up? | The Case for Interest Rates to Stay High for Longer 

 Nasdaq 100 Index Strong First Half Equals Strong Second Half? | Overbought or not? | Trying to Guess the Forward PE Multiple Is Hard!

 Fear and Greed Index | Volatility Surface | Put Call Ratio | Wall Street Gets Bullish | Homebuilders Surprise

Jay Pestrichelli’s book Buy and Hedge 

Derek’s new book on public speaking Effortless Public Speaking 

Derek Moore’s book Broken Pie Chart