This summary of the video was created by an AI. It might contain some inaccuracies.
00:00:00 – 00:15:06
The video discusses the recent reverse split of UVXY and the impact on its stock price, option adjustments, and term structure. The speaker also delves into the decay of UVXY and challenges with their GME position amid the rise of meme stocks and regulatory influences on cryptocurrencies. They touch on cryptocurrency prices, meme stock popularity, emotional influences on investment decisions, and the concept of the stock market as a popularity contest. Additionally, the speaker analyzes trading activity on GameStop and the impact of contango on UVXY and VXX products. Contango in the term structure is emphasized, with a focus on its long-term impact and profitability in certain trading strategies.
00:00:00
In this segment of the video, the speaker discusses the long-anticipated reverse split of UVXY, which has resulted in the stock opening around $40 after a 10 for 1 split. The options will adjust soon, with new series already in place. The speaker also examines the term structure, which appears relatively normal, with about 20 days till expiration and showing almost 10 percent contango indicating decay.
00:03:00
In this segment of the video, the speaker discusses the decay of UVXY while experiencing challenges in their GameStop (GME) position. They made the decision to roll out their position in GME to the August expiration, owning put spreads at 115/110/105 strikes. The speaker notes the recent upward movement in meme stocks, such as GME, and attributes some sell-off in cryptocurrencies to Chinese government regulations and Elon Musk’s comments. They acknowledge the success some have had in crypto but express caution due to difficulty in valuing it.
00:06:00
In this segment of the video, the speaker discusses cryptocurrency prices, with Bitcoin over $40,000 and Dogecoin at 35 cents. They mention significant market valuations, such as Bitcoin at 743 billion and Ethereum at 329 billion. The speaker also touches on Gamestop (GME) making a big move with earnings approaching. They highlight the popularity of meme stocks and how emotional elements can influence investments, even when fundamentals may not justify the valuation. The segment emphasizes the concept of the stock market being a popularity contest and the impact of emotional involvement in investment decisions.
00:09:00
In this part of the video, the speaker discusses the trading activity on GameStop stock, highlighting that despite thin trading volume, the stock is up almost 20 points. The speaker examines past price movements on the charts and anticipates potential future highs for GameStop. They also touch upon the trading dynamics of UVXY and VXX products, mentioning the impact of contango on the decay of these products regardless of VIX movements.
00:12:00
In this segment of the video, the speaker discusses the concept of contango in the term structure and its impact over time. They highlight the significance of contango over periods longer than a day or two, especially when the average exceeds 10. The speaker reflects on the performance of certain products over the past year, specifically mentioning a profitable downward trend following a spike in COVID. They emphasize the success of the shortfall trade and attribute it to the contango shape of the term structure. The speaker mentions upcoming research and hints at an upcoming interview.