Time To Hedge? | Options Unchained - Jun 3, 2026

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[00:00:00]Pre-market [music] Prep and Stock Trader Network. Here we are. It's Wednesday. We have CC Legator.

[00:00:22]We have Options Unchained. CC, what's going on this week? How are you?

[00:00:27]>> So Unchained. We're We're so >> We're so unchained.

[00:00:31]>> It's crazy.

[00:00:33]>> It's really such a good name for an options show.

[00:00:36]>> Yeah.

[00:00:37]>> I was thrilled when you brainstormed that one up. I was like, >> "Oh, yeah. Yes.

[00:00:41]>> Good one."

[00:00:42]>> Um, >> what's going on?

[00:00:43]>> What's going on? I don't know. I think, you know, I you and I joked right before we hopped on. I was like, I actually I think this, you know, the last couple of days they haven't felt like much, but to me they they're fairly significant. Part of it might be that, you know, I'm long Microsoft and and things like that that and I just watched them roll over, but I think it is kind of interesting. We we are we've been talking incessantly about the semiconductor rally. We've been talking incessantly about the Iran situation and oil.

[00:01:19]And I just think it's kind of interesting that like all of the signs we were looking for for this uh rally to broaden out and sort of protect us from the inevitable rollover in semiconductors at some point. It has to happen at some point.

[00:01:39]You know, fairly I'm not saying like I'm bearish and they're going to go back to where they came from. I'm just saying like at some point they're going to have to correct, right?

[00:01:46]>> Yeah. Um, I think it's kind of interesting the last couple of days just watching what's going on and at the, you know, we'll get into this, but at the index level, volatility, all those kinds of measures of, you know, there's no fear in this market right now. I mean, an Iran headline barely moves the markets anymore.

[00:02:07]>> Moves the market for a second.

[00:02:09]>> We're seeing crazy moves in certain stocks like semiconductors. You know, Marvel is the latest this week.

[00:02:17]>> We're just kind of like ho ho about it.

[00:02:20]>> I know.

[00:02:20]>> And as if it's could go on forever and just be normal. And you know, last week I was saying there's no uh hurry in my mind. And I wasn't seeing any signs that there was a hurry to like go out and hedge or like be very you know I was saying be careful about chasing >> was like sort of the theme of the last couple weeks of the show.

[00:02:44]>> Um meaning you could get trapped like I think we talked last time you and I were on we were talking about u space right like SPCE and like that reverse to yesterday. I mean, that's a total meme short, but I just mean like those things will happen in some of these names and you've got to be you got to make sure you're not the top tick, right?

[00:03:04]>> Yeah.

[00:03:05]>> So, anyway, that's a long roundabout way of getting to, you know, let's start with where volatility and all is and we can do what we do every week with the dark card.

[00:03:18]>> Okay, here we go.

[00:03:19]>> The dark card. Have you seen the dark wizard on HBO?

[00:03:23]Uh, is it about is it a Stephen King thing?

[00:03:27]>> No, it's a >> No, I don't I haven't seen it.

[00:03:29]>> Rock climbing.

[00:03:30]>> It's about rock climbing. Hell yeah.

[00:03:33]>> series. It's on Dean Potter >> who's, you know, was a mad man. Anyway, my friend and neighbor directed it and it's awesome.

[00:03:41]>> Oh, sweet. I got to check it out.

[00:03:43]>> I watched it. I was texting with him this morning to know how much I >> Nice.

[00:03:47]>> So, that a plug. So anyway, let's go to the dark wizard card here.

[00:03:53]>> We have >> a basically nothing changed from last week. I, you know, cues you could argue are slightly higher, but a lot of that has to do with AVGO's report after the close today. But everything else is just kind of chilling. This isn't midsummer, nothing going on low volatility, but it's pretty damn low considering, especially considering everything that is going on. Uh, oil's down. Gold balls kind of the same. Uh, gold stopped moving, you know, the way it was a couple of months ago.

[00:04:26]>> Sure.

[00:04:27]>> Yields, you know, they've been moving around, but not we're not seeing what we were seeing like two weeks ago with big 10 basis point swings in the 10-year.

[00:04:34]And the equity ball is pretty low. The lowest you'll ever see this is like 1.1 1.2 two oneweek moves in S&P I would say and that's like a that's a 14 VIX in in mid July but we're pretty close to that and going back to like kind of the intro it's you know is it time to start looking down a little bit and this week I would say a couple of things popped onto my radar which weren't I wasn't concerned about last week and if you want to go to that like light blue card.

[00:05:11]The reason I wasn't concerned last two weeks on the rally in semiconductors and what could happen if it stopped or they rolled over a bit or anything was that it did kind of look last week like participation was broadening slightly, >> right? Software >> that mainly was to me within tech. This is sort of dismissing everything that's going on in energy stocks and financials and everything. That's a whole other conversation. But just within tech, what's powering this rally is you started to see some days where Nvidia wasn't doing that great, but Microsoft was picked up.

[00:05:47]>> Microsoft, IBM, >> Salesforce, and IBM, Oracle, right? I think we talked about all those things last week.

[00:05:54]>> And I saw that as a good sign, which is basically can the market survive a 10, 15, 20% pullback in the SMH, right? because that is going to happen at some point. You are going to see a you you're going to see SMH I mean and we can pull up the SMH chart. It is bonkers and you're going to see a pullback. Now whether that turns into one of those classic 50% or more that's another discussion for down the road of when and if that ever happens. It will happen but like you know what I mean?

[00:06:26]>> Yeah.

[00:06:27]>> That's more about the AI story writ large. What I'm talking about is just sort of this momentum that we've that we're entering the summer with. And last week I was like, "All right, this is a really good sign like we could keep ripping into summer if software sort of picks up steam and other areas, right?" And we were seeing other signs of, you know, maybe that ultimate AI bubble type feeling, which is stories like Ford going higher because they're an AI company now. That's the exciting stuff in a bubble very much reminiscent of the dotcom bubble that can go on for two years like it can keep going right >> and things get way nuttier than watching you know Micron go up 800,000%.

[00:07:12]So, however, the last couple of days software pulled back pretty hard and a lot of that had to do with Microsoft I think because they had their their their developer day this week and I think it was, you know, kind of ran into it. It kind of it was a little disappointing.

[00:07:30]>> Bit of a sell the news.

[00:07:31]>> Yeah, sell the news. Man, did they sell the news. I mean that stock you know has gone >> from I mean what did it tick yesterday morning maybe or Monday afternoon >> it got as high as 47 >> 221 is what I see 47221 >> yeah 472 and it's back to 42 right now in two days >> yep >> so that's pretty ugly action IGB you know sort of the same thing it did run up like 15% over the last couple of weeks which uh you know to me on that chart looked pretty healthy uh recovering some of that but you know what is it pulled back in the last two days it's down I don't know what is that 7% or something so that to me is a little bit of a trouble a troubling development now that we could [clears throat] have this conversation these things could bounce today or tomorrow and and and kind of be fine and it might look like fairly healthy the action [snorts] in which case maybe not that scary but I would keep my eye on this sort of stuff as you keep your eye on the 10-year yield and oil and you know all that other stuff happening in the background but to me this battle of the AI trade moving beyond the latest semiconductor duour [clears throat] uh sub sector of semiconductors which it seems to be doing week to week to week to week. We need to be able to survive the inevitability that they're going to run out of companies to go up 800%.

[00:09:08]Right? There's just so many semiconductor companies. They're all kind of competing with each other in some ways. Like, you know, you read these stories, it's a little above my pay grade. But, >> you know, a lot of this has has to do with the fact that >> Google's hyperscaling wants this, Amazon's wants this, MetaS wants this, you know. So, anyway, I think this needs to broaden out. And if software, if that was the top pick for software for a while, not a great sign.

[00:09:34]>> Can we just pause here for a sec? We've talked so much about this on site trader network and premarket prep, but just IBM, a massive company, going from a 52- week low to a 52- week high in six trading sessions. Like, that is absolutely bananas to think about. We're not talking about a penny stock. We're talking about IBM, one of the most valuable companies in the world.

[00:10:00]>> Yes. So, from that that rally from basically the last week of May >> from the low 200s to Yeah. I mean, it's it's that that's pretty nuts action. And by the way, it hasn't even pulled back that much. All things >> and and that's and that's actually why I wanted to like pause on this because yes, IBM is down six and a half% today.

[00:10:24]It's It doesn't It doesn't even look like a flash on that rally. Yes.

[00:10:29]>> It doesn't even look like anything.

[00:10:30]>> Yes.

[00:10:31]>> It's crazy.

[00:10:32]>> That is Okay. So, this is actually Look at you like with like a perfect setup to what we're about to talk about next here, which is that, you know, like IGV's chart, you could argue it looks fairly like healthy. That that IBM chart does not look healthy to me. I don't know what to make of that. That thing could go to 600 or it could come right back to 200.

[00:10:54]>> I know, right?

[00:10:55]>> So that kind of, you know, just unhinged nature which you're seeing in a bunch of these names all of a sudden.

[00:11:03]>> Good way to put it.

[00:11:03]>> It is not evident if you go back to like the the don't do it literally, but in your mind, go back to the to the dark blue card and me saying that we're practically at midsummer ball levels.

[00:11:16]>> Yeah. in the market which is the expectations of traders over the next you know week or month of you know the potential for volatility in either direction but you know a lot of times down but in this case higher it's like all right the market is going higher you know we I think today is going to be the it's going to break a streak of nine straight up days in S&P I want to say and this week I think we've had nine straight up weeks in the S&P >> but they haven't been that volatile Right. I mean the last the last weeks I think it's like we're up three and a half% during that nine-day rally. It's not crazy, right? Like that kind of you know that kind of happens.

[00:11:57]>> Yeah.

[00:11:58]>> But what we are seeing at the individual stock level is charts like we could we could do 200 charts that look like IBM.

[00:12:04]Maybe not 200 but we could do 60. And that is showing up in other readings outside the VIX. And that's the other little bit of a warning sign that I started to become more, it was already kind of on my radar. I watch it a little bit, but it became more significant in my thinking this week. And that is basically that the correlation and dispersion readings. You often we talk about breadth and everything and breadth is about how stocks are moving versus each other every day. with the correlation and dispersion readings. This is a little bit nerdier and this is getting you into the world of derivatives and options.

[00:12:50]This is expectations by traders and the and the options market about how um individual stocks are going to be moving versus the indices themselves.

[00:13:03]>> Okay, >> what we're looking at right now is we are at a historically low level of correlation. And what that means is the S&P is barely moving. You, you know, like the expected moves are less than a half a percent a day. Yet you're seeing daily 30% moves in stocks. Right. Right.

[00:13:24]>> And that's both due to earnings, but it's also due to, you know, um Jensen Wang saying that, you know, some stock is going to go be the next trillion dollar stock, right?

[00:13:35]>> Some stack. And so that kind of action and that kind of you wake up in the morning, you could almost say like, you know, when you all are doing pre-market prep and getting ready for pre-market prep, >> part of it is probably like, all right, what stocks up 30% this morning, >> right? [snorts] >> Like pretty much every day for the last couple of weeks, right? And you're like, how big of a company is that? And it's sort of, you know, sometimes you're like, all right, well, it's a, you know, it's a two billion dollar company. No big deal. But some of these companies are 200 billion. Some of these companies are 800 billion, you know, that are making these kinds of moves. Right.

[00:14:15]>> Right. Right.

[00:14:16]>> So that's what this is measuring. Now the significance of this, this is complicated >> and I never want to like kind of overstate something. There's a lot of like people that come from my world that [clears throat] overstate the effect or the meaning of some of the things in the derivatives market.

[00:14:34]I don't want to overstate this because at a very you know there's a seasonality to this which is that during earnings season of course the correlation is going to be quite low right you're going to get earnings moves outside of the indices when you have some big huge market moving event correlation is going to be very high right and that would be the Iran war things like that right where the whole market is moving pretty much in unison except for maybe energy stocks.

[00:15:08]However, this is as low as as we've ever seen. And in the past, outside of those kinds of market moving macro situations, it has tended to indicate that you're kind of near at least a small to sometimes decentsized pullback, right?

[00:15:31]And what I would caution about here is I'm sort of taking my my thinking of the last two weeks shows which is be very careful about chasing to all right maybe it's time to start looking at some potential hedges. And if you go back to the light blue card, >> sure.

[00:15:54]>> The way I'm thinking about this is if SMH had a rollover, who knows when that is. Who knows where it's even from, but that SMH chart is bonkers, right? So, for it to pull back 10% is nothing. If it for it to pull back 15 to 20% is really nothing. And you could argue that for it to even pull back 25%, you know, over the span of a couple of weeks wouldn't be wouldn't take much. You know, we're talking about Micron going down 200 points maybe, right? Which has no problem going higher by 200 points in that time frame, right?

[00:16:31]>> That's a great point. So what I was sort of trying to figure out and I was looking at past moves under the SMH and you can look at the you know kind of the beta and everything like that but you know like back of napkin math if we did see a rollover in SM SMH what would it mean in the Q's? What would it mean in the spy? And one of the things I'm sorry Brent I've got you going all over the place today.

[00:16:55]>> No it's fine. That's what I'm that's what I'm for. If you look at that correlation chart. So go to that and then I'm gonna have you go >> uh not this one. No, this one. Right.

[00:17:04]This one.

[00:17:05]>> Yeah. Let me see if I've got So the there was the moment in Oh, actually go to the other one.

[00:17:14]>> The dispersion one.

[00:17:16]>> I want to see how far back I have. And I could pull this up if we >> This one's a S&P dispersion index DSPX.

[00:17:22]>> Yeah. So if you look so see that so the the main huge spike last year what that is is that's the tariff tantrum right >> and the reason the tariff tantrum was different than most uh macroooving events on on an index like this is that because the different sectors went different directions right dependent on depending on whether they would benefit or be punished for the new tariff regimes Right. And that's why you saw that kind of like sort of spike. But the more interesting one to me is if the very beginning of that chart, it's back in like July of 24.

[00:18:05]>> Okay. Yeah.

[00:18:06]>> There was that amounted like right when it hit and then it kind of like resolved. You could you could see these spikes uh the taking the tariff away from this. Each one of these spikes tends to be that the dispersion is growing, meaning correlation is breaking down. The index isn't moving as much as individual stocks and then at some point that resolves to the broader market, right? And it could mean that breath is really bad on the upside. That tends to mean what it is. It's like you know we are being powered by the new semiconductor move dour every day and then all of a sudden that resolves when that ends and the whole market's like oh you know the market actually was a little weaker under the surface we just didn't notice right and that that one back then resulted in and we can pull up my chart okay let's go to my S&P >> um that was this move right here, which was kind of interesting because it's very similar timing. So, this was, you know, basically the beginning of July and I can sort of zoom in. That's where that is on the chart and it's like a quick little like let's resolve this and see what happens, right? And I can't remember, you know, sort of on the macro level or what was going on in the world there, >> but this setup to me looks very similar of the last time like the chart of those those measures looked so similar. You know, this is the tariff tantrum. This is the Iran war. But you can kind of go back in time and see very similar examples of this. you know like um sort of the the the beginning of the this decline was the uh inflationary bare market essentially of 2022 similar spikes on these kinds of readings. So anyway, this is the kind of thing that I think is we are getting closer to something like this potentially happening this summer, which is, you know, in the S&P 500, this was a pullback of about 7%. Right, from from like sort of the what was at the time an all-time high. So we pulled back really quickly in a couple of weeks, about 7%.

[00:20:20]Mhm.

[00:20:21]>> In the Q's back then, if we do the same chart, that was more like uh 31. That was almost 12% a pullback in the cube.

[00:20:33]>> Okay. Okay.

[00:20:35]>> So, if I was looking Yeah, you go.

[00:20:38]>> So, you're I was going to go where'd we go? So, I was going to go back to this one. So on this card you say, you know, talking about a a move lower in the SMH pot potentially, you're saying, you know, a 25% move lower in the SMH, probably nearly a 10% move lower in the SPY. So yeah, that 7%, you know, kind of do the math there if you want.

[00:21:01]>> Yeah. And we can look at the SMH chart, and this is where it gets really bonkers, right? Because we've all kind of seen this chart. [laughter] It's like, all right, that's a one-year chart. This was SMH going higher, going higher, you know, going along, going along, and then you get this kind of crazy move, right? And again, we have no idea how where this ends, but it does end at some point. And it rolls back, you know, you only have to go back a couple of weeks to when we had a uh 8%, you know, like kind of move lower. It was like like 10%. So the point being is like if SMH did if if Nvidia, you know, Nvidia hasn't been acting great the last two days. If Nvidia rolled over, if or didn't go higher, if you started to see like Broadcom earnings and Broadcom went lower and then you kind of saw some topping out in some of these other stories like MU and all just for just for now, >> like where could SMH go? Well, clearly it could go down 10%. Which would really just be >> this level, these highs right here.

[00:22:12]That's about 10% from here, lower.

[00:22:14]>> Yeah.

[00:22:15]>> And then if you were to catch those lows down here, that's about I don't know, call it 17%.

[00:22:22]>> Which would be nothing. I mean, it could be that a couple of days. And then you start getting down into the chart of like, you know, where was this? You know, back in the end of April, it was about 500. You know, that's a 25% move lower, which is obviously the least likely scenario. But man, those 10% and, you know, 15% seems quite reasonable. And then if the market overall kind of got ugly, a 25% move lower in SMH wouldn't be out of the question. In which case, you know, is it time to potentially start looking at hedge? Well, first of all, SMH, you could hedge SMH just straight up.

[00:23:05]>> And that's under the assumption that that would be the cause of a of a market pullback to correction over the next couple of months. It could just be SMH if you are heavily weighted. I mean, we're all heavily weighted Nvidia and and Broadcom and we're now all kind of heavily weighted Micron. If if you just wanted to like pinpoint like if if the market cracks, it's probably going to be because of this thing pulling back 20%.

[00:23:31]You know, that could be a good option.

[00:23:34]I was looking more at like the cues and the spy and what would be some realistic levels to kind of hedge back to and like at what time frame, right?

[00:23:45]>> Yeah.

[00:23:47]>> Any questions on that?

[00:23:48]>> Yeah. [laughter] uh having those having um you know like clean setups like I think you just pointed out there it's it's can be largely about like the ease of those things happening >> when you have that kind of co you know coincidence you're like oh that's a super clean setup this could totally make sense and like to frame what you've been setting up here and to keep this line of thinking going we have a VIX right Now that is trading just over like just over 16.

[00:24:23]>> Yeah. Cheap.

[00:24:24]>> So I think you know where you're kind of leaning CC is like volatility is so cheap here. Why not take advantage of >> that that cheapness? Right.

[00:24:38]>> And and I would have said and I did say last week on the show I think you have time. I'm not seeing any like you know I'm seeing a bubble everybody is >> but not like enough to like get bearish and not and this is not bearish like don't get me wrong this is just saying the the the highest likelihood always is that SMH goes sideways from here right that's the highest probability there's no chance that happens it either keeps going higher or it rolls over at some point right it's just it's got too much volatility baked into it right now all these kind of crazy moves. So therefore where you know on a chart like that at what point does the probabilities of this continuing higher start to get a little lower than at at least doing a little 10 to 15% check back. That to me has been building and if we did see that the overall market has a very high probability of having to check back also because I am not seeing any signs of another area of tech or any other sector like financials or anything. In fact, some of that looks outright bad right now.

[00:25:52]>> Credit card companies and all they look terrible.

[00:25:55]>> Yeah. So, I don't see anybody willing willing I don't see investors willing to bet on anything yet to take its place.

[00:26:07]There were signs of that over the last couple of weeks and software getting off the mat, but the last two days have made me question that a little bit as if it was just a dead cat bounce. I mean, we'll see. But, uh, yeah. So anyway, that would be I think now is the time to potentially look out to, you know, August, maybe September, maybe if you need, you know, you're thinking like more like the fall is a a, you know, like a bigger deal and looking at some things, you know, like the cues. Let's just go out to or let's do spy real quick because there's a there's there's two there's two ones I was looking at before the show >> and [snorts] we're going to go out to August and the first one is a kind of um 735 and I'll show you on the chart why I was kind of looking at these levels. So, the first one is like a 735, buying the 735 put and selling the 700 put, right? And that right now costs a little less than $6, right? So, 585 on the screen. It's 35 wide and it could basically protect up to $29 of that move costing you just $6. Now, what I like about this one as a hedge is if you look right where it kicks in was just this like kind of mid to late May little move lower in the market. You know, people probably have already forgotten this, but we, you know, we went down like two two and a half%. In a couple of days, what's cool about that is it kicks in right around there, right? So, that's an obvious spot where it's it's going to be unclear if we were to roll over in the next couple of weeks and we went back down to that level.

[00:28:07]It's very unclear whether that's it.

[00:28:09]Like, was that the top? No, we're just we might just be testing support and we might bounce straight higher. What's cool about this trade is you're going to get a look down there. You're going to have a little bit of profit on that.

[00:28:21]Let's say it happened, you know, by the end of June. If we went back down to this level, that thing would be worth, you know, nine ten bucks, right? So, you've already made 30ome percent on this this position in a couple of weeks and you get to sit there and watch it and you're like, does this keep going?

[00:28:40]If it doesn't, if it bounces, you see other like sort of positive signs that it was just like a little check back in the market, then you take the thing off for, you know, a little bit of a profit maybe or, you know, you can sort of decide. you have optionality there. Now, if we were to do that and you came down to those levels, which in the spy is like, you know, 730 and change, 735 where this thing kicks in and then we kept going like I don't know, the 10-year yield was at 470 and like the market just kind of looked a little bit in trouble and SMH had sort of checked back or was rolling looked like it could roll over a little bit. Then all of a sudden you're in it and you're down to 700 in this thing which to me is a very realistic level because it's these prior you know pre uh you know pre uh Iran uh rollover in the market prior highs.

[00:29:36]>> So you've basically projected yourself down from very recent lows. very recent, meaning the last couple of weeks, all the way down to where we broke out, right? Which would be an obvious level if we checked back, you know, that's down 7%.

[00:29:52]And there's something about 7% corrections. I think it happens a lot of times. The market goes down 3%, it bounces most of the time. When it does go down 5%, it usually tries to bounce and then there's some sort of retest takes you down 7% and and puts and scares the living daylights out of everybody. So to me, this is like a very obvious level to protect from where I would start being worried to where I think it would actually bounce. And that's about that level. So I really kind of like this trade. And this is August we're looking at, but it would be just slightly more expensive if we went out to September.

[00:30:29]>> CeCe, did you look at h have you been looking at this like backstage like before we talk about it or did you just look at this like live here on air? I looked at these right before we went on.

[00:30:41]Yeah, >> you're just like an It's so awesome just like looking to like watching you just find these things like naturally. Like you just it's awesome. I I love that we get to see you using options AI in this way because it's just like watching a master with his >> with his uh you know awesome product here. Well, as a uh just to plug the product, this is what makes you know trading this visually to me.

[00:31:10]>> Absolutely. Absolutely.

[00:31:11]>> So, to me, when I look at that chain, the way my mind works is I'm like, that's a wall of numbers. I don't, you know, I know what they >> need the visual, >> but I don't want to stare at them, right? Like, it's just too much. It's too much. I've always thought I think a lot of people >> That's awesome. And clearly we all do when we're looking at charts, right? And so that was sort of like one of the main reasons between behind, you know, because traditional payout diagrams in options are they're uh very weird. They re they reverse the X and Y axis. It's sort of like time by money. And it's not the way stock charts work. Stock charts work higher, lower. And so that's what we're staring at. And what's cool about that is you're sort of sit sitting here flicking through the chain and you're like, "All right, what if I bought a a a put right here and sold a put right here and instantly you see those break even and everything."

[00:32:02]>> Right. Right.

[00:32:03]>> And so, you know, as a a segue into the cues, >> um, this is like if we go out to September in the cues, I think there's two interesting ones here. And so the first is, and I want each of them to kick in like a little bit lower than here. And again, like looking at this chart, I want it to kick in somewhere near, you know, like this little nonsense that we went through. And it all of a sudden looked like, you know, the market might be a little bit This was these were the weeks in Midmay where uh yields were going higher and everybody got kind of got spooked, right? Yeah. And then we forgot all about that. yields came in, but we forgot about it a little bit. But that's where I want to see if we do pull back a little bit, you know, coming out of earning season. Tonight's sort of the last big one, I think. Um, if we come out of that and we come back to those levels, it might just be completely healthy. We we pull back a couple of percent and then we keep it continues on for the summer. But if we don't, that's where I want my stuff kicking in. And so in this case, I mean, look at this chart, too. Like that's nuts, right?

[00:33:18]This is from March from the end of March until now. I mean that >> it's nuts. But it's just this is the market. Like this is how you get jaded, you know? Like you're get used to this kind of stuff, which is happening >> every once in a while. So like you look at this chart and you're like, "Oh, that looks awesome." like, you know, three months just grinding higher and then you and then you move it back to a one year.

[00:33:45]>> I don't know if this is like, you know, that's kind of Yeah, that's kind of extraordinary. Look at all that green.

[00:33:51]That's extraordinary.

[00:33:53]>> So, my point is is that like a pullback of some sort completely. I if you get surpris if it does happen and you got surprised by it and you got caught off sides by it, like shame on you because look at that chart, right? Not saying it's going to happen, but if it did, there's some very obvious levels that it would pull back to. So, we're out in September. If you bought the 725 um put and then went all the way down to the 675 put in the cues, and you can see what this looks like on the chart. Now, this doesn't even check back to those highs, right? This is well short of them. So, this is this is not that bearish. This is basically saying, you know, the cues in the next over the summer at some point they could have a check back and it's not even going to get back to the pre Iran levels. Not even close.

[00:34:49]>> Not close. Not even close.

[00:34:50]>> But it is a $50 wide put spread that cost you about $12.50 and that protects up to 3750 in a check back there. That only would be not even a 10% move lower in the Q's.

[00:35:08]And 10% sounds like a lot until you look at that chart until you know and then also that that probably only corresponds to like a 5% move than the S&P to be honest because the Q's are going to have so much more beta on a move like that because of why they're higher which is SMH basically.

[00:35:29]question here from imagine Cisphus happy and this is maybe a good way to to seg over to Broadcom or maybe even Marll a little bit uh asking what happens if index kept the level and I'll actually let me put it on screen so you can read it if you want with me CC what happens if index kept the level but just rotation from the MAG 7 to other S&P companies how to hedge only the top 10 in the S&P.

[00:35:59]>> Well, I would say then you would do like XLK, I would say. But I that to me sounds a lot more like you would do SMH because >> okay, >> you know, like what's going to happen to Amazon and Meta, I have no idea. But like if if you were really worried about what's going to happen in Nvidia and ABGO and everything, then it would be SMH.

[00:36:20]>> Okay. I mean they're basically a proxy for that with now the added juice of the microns in all of the world >> right >> so I would say that can I ask maybe they can answer imagine Cisipus happy what is that a reference to I feel like it's a subtitle to some other book or story I know >> probably right >> somebody has a title where it's like imagine sis is happy or something >> yeah probably some existential philosopher or something right >> can't remember Yeah, >> but I've definitely heard that phrase before.

[00:36:53]>> I like it.

[00:36:53]>> Um, so and they can weigh in after this.

[00:36:57]>> So, yeah, I would say SMH or X, let's pull up XLK and let's see real quick.

[00:37:02]>> Okay, >> so XLK, you know, the the the top components are well, I can tell you.

[00:37:08]Hold on one sec.

[00:37:10]>> They are Can we guess? We We must be able to guess.

[00:37:17]>> I'm gonna quiz you. I'm gonna quiz you.

[00:37:18]You might be surprised.

[00:37:19]>> Oh man, I'm nervous.

[00:37:20]>> I feel like you didn't um we did I I quizzed you on uh Broadcom's uh market cap earlier >> and I failed.

[00:37:30]>> Well, I don't think many people know [laughter] how big >> Okay. Okay.

[00:37:35]>> Start from the top.

[00:37:38]>> Uh Nvidia.

[00:37:39]>> Yeah.

[00:37:40]>> Um Apple.

[00:37:44]>> Yes. Two for two >> in a row. is >> third one's kind of surprising actually.

[00:37:49]>> Oh, that's like a hint. Um I mean I was gonna say Broadcom, but that fourth.

[00:37:55]>> So third.

[00:37:57]>> Okay, Microsoft. Okay.

[00:37:58]>> Okay. Now, here's the really surprising one that's next after Broadcom. You go Nvidia, Apple, Microsoft, Broadcom. What do you think is the the uh one, two, three, four, the fifth biggest in XLK right now?

[00:38:15]Um, >> it's it's a new entry.

[00:38:21]>> New entry.

[00:38:23]Uh, I don't know. I don't know.

[00:38:26]>> Micron.

[00:38:27]>> Oh, Micron.

[00:38:28]>> So, yeah. So, this is this is what's kind of crazy is like let's just look at what's Mic Micron's market cap right now. It is uh 1.2 trillion, right?

[00:38:41]Broadcom is what did we just say it was 2 Broad Broadcom's 2.3 true >> I mean not that Micron's going to catch Broadcom anytime soon but like it's it's suddenly in the conversation which is nuts and that's all happened in the last like couple of months but that's that's just to show you the the sort of you know and then obviously what >> Jensen said about Marll this week it's the next trillion dollar so they're just like kind of giving away trillion dollar valuations at this point and he's doing a lot of it which is only this isn't it's going to sound like a little bit of a conspiracy theory but it's not a conspiracy theory I would do the same thing Nvidia and the whole AI trade and the whole hyperscaler and this whole thing is I mean if you're in the middle of it which Nvidia is Nvidia picture them the mass in the middle and everything coming off right >> I mean it only helps you if you keep hyping it, right? And the more companies you bring along with you, the more you know, like he should say, he should say, um, you know, he could just name any of their anybody that they do business with, he could get out on stage and say, you know, I think this is going to be the next trillion dollar company or this or I think Micron could be a $5 trillion company or whatever it is.

[00:40:01]>> People listen though, right?

[00:40:03]>> It only helps Nvidia because it helps the hype cycle and the hype, you know.

[00:40:07]>> It's a great point.

[00:40:08]>> Yeah. So anyway, going back to XLK was a fiveinut aside. So this looks a lot like SMH to me to answer Sisphus's question is, you know, it's it this looks almost exactly the same to SMH to me.

[00:40:26]>> So I think you could do this one, you know, and this one would be it's essentially the Q's on steroids. So, you know, it looks a lot like the Q's actually. So yeah, so they they all kind of look at the same, but it's like you get more I think you get the most bang for your buck on SMH. Second to that is XLK.

[00:40:48]Third to that is the Q's, but they're the fact that these charts look all so identical should should be another sign of how heavily concentrated this rally is.

[00:40:59]>> Yeah, definitely.

[00:40:59]>> I mean, this looks nothing like the rest of the market, right?

[00:41:05]>> So I don't know. It's it's I would go XLK and but there we all own a disproportionate amount of Nvidia, Broadcom, Micron, like we all own these stocks whether we want to or not. So whatever your portfolio is, if you own mutual funds, if you own ETFs, you own a ton of this right now because it's market cap weighted. Um, have you looked at like the Can you pull up a chart of RSP? I don't have the non- options AI cuz I don't >> um I don't have good charting over here on my lab.

[00:41:39]>> If anybody is curious, go look at the equal weight S&P chart versus the current S&P chart and you're going to see the difference that the semiconductor um rally is doing to everything basically.

[00:41:53]>> Sure.

[00:41:54]>> Yes.

[00:41:55]>> Let's see if I can do this in real time here while on air. the uh that trader CC said it's uh >> Kimu >> Albert Kamu. There you go.

[00:42:06]>> You you got it right. I >> philosopher. The last class I had in at Western Michigan >> was >> I had to do like a base 300 like whatever 300 level class. It was in the summer. I stayed in the summer and I had an existential philosophy class. It was a It was awesome. Wait, can can [clears throat] I tell you a giveaway that you did and I haven't?

[00:42:32]>> Well, I would have pronounced it cameas.

[00:42:36]>> I think I've only ever seen it written.

[00:42:38]I don't I've never taken a class.

[00:42:40]>> Well, uh, my professor was a super quirky guy, as you could imagine, an existential philosophy professor. He would say it's pronounced like pleased to meet you, >> na na. Pleased to meet you. you go.

[00:42:56][laughter] >> So, he was big on pronunciation. I'll just say >> and the big thing is if like if you're ever traveling in a French-speaking country, which you have, right? Like you go to Morocco and all, just leave off the last symbol and you'll be fine.

[00:43:06][laughter] Or the last syllable, I meant >> uh Okay, let's do let's do uh let's do Broadcom here ahead of the earnings and then Super Gals had a bit of a zoomed out away from this kind of discussion that I want to uh jump on before we wrap up here today.

[00:43:25]So [clears throat] Broadcom's expected move for today is around 8% let's call it and that's about 445 to 4254 or 525 530 up in that area. So, if you're looking on this chart, you're like, "All right, um, to the downside, if you're just looking at a chart and you don't have the options AI expected move up in front of you, you're looking down to these prior highs back in midMay, right? So, that's what it's pricing on the chart. Is it to kind of return like this consolidation was crazy? Look at this. Like just straight sideways, right? So to the downside, the options market is pricing a retest of that the top of that range that lasted, you know, from uh April that lasted like a month and a half, let's say.

[00:44:20]To the upside, you know, breakout uh and it's anybody's guess if it goes higher.

[00:44:27]The one thing I would say about this is the sheer market cap level. you know, this is not um this is not SanDisk, this is not Marll.

[00:44:44]So, its moves would be much closer to Nvidia moves than to Marll or, you know, even a micron. It's it's just not going to move like that. It's just too big.

[00:44:55]So, I would say 8%.

[00:44:58]you know, I'm probably a seller of that move, like similar to how I would be a seller of an Nvidia five to six percented move. Um, I will say in the past it has, um, you know, last in March it moved 5%, in December it moved 11 and a half%, in September it moved 9%, in June of last year it moved 5%. And then even going farther back, it had a 25% move in 2024.

[00:45:26]Now, what I would say though is though, you know, to the point I was just making, those were a lot of those big moves were back when this thing was a trillion dollar company, not a $2.5 trillion company. So, those moves tend to compress as you get bigger like that.

[00:45:47]>> Yeah. Yeah.

[00:45:49]Okay.

[00:45:51]And then what was the other uh so is this a philosophical question?

[00:45:56]>> Um not really but yeah we could take it there. Uh so Supergirl said uh wondering your thoughts CC on the Trump accounts and the PDT rule. I believe it's Friday that the PDT rule will be removed.

[00:46:13]>> Um yeah, June 5th. I don't know if it goes into I don't know if it goes into I don't know if it will happen on like June 8th or if it will happen at the start of trade on June 5th.

[00:46:29]>> Right.

[00:46:29]>> But but do you have any thoughts on this potentially, you know, like pumping the market? I mean getting more capital to get getting allowing less capital to trade more. Do you think this is going to do anything broadly to the market or like of course you pulled up Robin Hood here which makes a lot of sense.

[00:46:47]>> Yeah, and we I think we talked about Robin Hood last week. I kind of snatched a couple of things to to sort of position for this thing to go back to 100 but again last couple days >> Oh yeah, I remember that. Yeah, >> last couple of days have not been kind to this which is another, you know, maybe this is this is what sort of caught me in IGV and Microsoft and everything. It's like, did wait, did we just see a false deadcap bounce? Like, we're going to find out pretty soon. Um, in the next couple of days, probably.

[00:47:16]So, where where am I on this? It's um near-term, I think it's going to be uh very helpful to stocks like Robin Hood and everything like that. They're fighting a couple of fronts right here with the prediction markets and everything, I would say.

[00:47:33]>> Certainly. Yeah.

[00:47:34]>> And Schwab and everybody else. So it's like if everything's going towards prediction markets, you know, what does what what happens to these guys spreading? But and oh, and these guys are also getting hit because of uh Bitcoin. Bitcoin is going to looks like it's going to zero all of a sudden.

[00:47:51]>> I think yeah, I think that's kind of >> that's also weighing on Robin Hood. So yeah, they just got hit with like I don't know that one's probably the main reason this week is the Bitcoin move.

[00:48:02]So, you know, a company like Robin Hood, Schwab to a lesser extent, like all of these kinds of names, I think the the removing of PD2 rules and everything like that is helpful to them short term.

[00:48:16]Being philosophical, it tends to removing financial restrictions that were put in on a prior crisis. Um, whatever you whatever your feelings about those rules like PDT rules or banking regulations after a savings and loan crisis or a mortgage crisis, those rules can be really annoying and maybe they were fighting the battle before, but man, it's never a great sign overall when those things start to get removed.

[00:48:51]uh it just seems to like kind of precede a bit of a uh at least a minor crisis. So, I don't know. That's like sort of like big picture.

[00:49:05]>> Yeah.

[00:49:05]>> Is not that the the PDT rule isn't going to be the thing, but anytime you see that sort of like, oh, why would why did we put that on? And it's like, oh, because a lot of people got in trouble in the dot bubble, right? and a lot of people got in trouble. You know, anytime we see this sort of >> you're probably going to more see it like in prediction markets and the and the and the sports betting stock, you know, names and things like that. But you will see a massive backlash in the next year or two and all of these names like whether it's DraftKings, whether it's Poly Market, whether it's, you know, Robin Hood gets swept up into it or whatever, there will be a backlash and the the and DC will come in and and slap them and it will happen at some point. So, just so you know, like that's more of a long-term thing and it could be a couple of years, but >> but man, there's like a direct correlation between forgetting the prior reason why you put rules in place on the banks and trading and everything and then the same thing of it's never exactly the same thing, but something new will happen and then we'll put o overly restrictive things on top of, >> right?

[00:50:18]>> What what crazy timing for that to be happening right now, right? Yeah. I mean, it's like >> that's when it happens. It's like, "Oh, the market can never do we have that rule."

[00:50:28]>> Yeah.

[00:50:29]>> Yeah. Oh. Oh. Oh, yeah. That's why we had it. Oh, shoot.

[00:50:33]>> Yes.

[00:50:33]>> Uh Alisa with, you know, a great a great thought here. Something that we didn't really consider here this morning on premark prep. Not really an SCN either.

[00:50:41]Uh we talked about the exchanges today being under pressure, but we didn't really connect the dot. But see me, I sibo also selling off. Yeah. Yeah, probably probably on that. That's probably a good call, Lisa.

[00:50:56]>> Yeah. And like, oh man, look at that. I didn't realize the CME move was so sharp. So, yeah, there there's a lot of story. financials are not looking great right now, you know, and >> this is let's say 50, you know, like a a $55 move or almost $60 in two weeks.

[00:51:25]Yeah. What is that?

[00:51:28]Is that like when did Bitcoin first crack?

[00:51:33]Um that's interesting. We got to we got to look into this a little bit like what is that what is that pretending? Uh so that was about the same time >> that was like Bitcoin started cracking right around the same time >> but that wouldn't explain what were the other ones at CME. What was >> ICIBO?

[00:51:56]>> Okay. And is ICE symbol IC? Yeah. Okay.

[00:51:59]Let's >> Yes. Yeah. And that's like the NYSE.

[00:52:04]>> Um, yeah. What is that getting ahead of?

[00:52:10]>> Well, so look at just ju I don't like, you know, not necessarily I don't necessarily know the connection here in this in this theme in this trade, but like look at the the PE firms too. KKRS, Black, VX, VLK, >> right?

[00:52:27]>> All right. Add this. Can we go back and put this on my light blue card because this to me I hadn't I I had seen the um so if you look well let's go to like so oh the credit I did bring up the credit card companies okay >> did Wait did you mean to like put this on screen >> oh yeah can you not see I'm not looking at Oh no no no I'm I was joking about that like [laughter] >> I was like uh right now >> so I was looking at you know like the credit card companies are not you know they're suddenly Certainly not looking that great, although those aren't as exciting. Then of course the financials have been under a little bit of pressure the last two weeks. And then what's the uh so Apollo I think is acting the best.

[00:53:10]Is it KKR that's acting the worst?

[00:53:12]>> Uh I don't know. I don't especially look at these.

[00:53:15]>> Yeah. Like that KKR chart is is bad, right?

[00:53:18]>> Yeah.

[00:53:19]>> Look at that.

[00:53:20]>> So this was, [clears throat] you know, we're we're kind of like we all got worried about this and then it kind of showed some signs of life. Now it's rolling back over. Um, that's another kind of warning sign. And if this if the like explain this SIBO move like can you explain that? I don't know.

[00:53:39]I can't. What was this? So anyway, >> can we we So I I will just take a point and shovel it over here to you that Dennis made this morning on premarket prep on the credit card names. I don't know about the the brokerage names or the the PE firm names, but Dennis is going like the price action that we're seeing in Visa and Mastercard to companies that everybody uses their products is a sign of what's happening in the real economy.

[00:54:11]>> Totally. Yes. And and if you want to do the whole K-shaped thing, so this is American Express, right? which is, you know, not and then who's the opposite consumer? Uh, Capital One, right? And they're the same chart, right? So, the whole K-shaped thing, it's like, all right, well, American Express is supposedly the high-end consumer.

[00:54:34]There's no highend high other there's no more high-end consumer than somebody in their money with their money in or at or working at KKR, right? They're the richest people in the world.

[00:54:44]>> That's right.

[00:54:44]>> Look at that chart, right? Yeah. So yeah, there's there's a lot, man. Yeah, it it's I don't want to get everybody all scared or whatever, but there's a bunch of stuff going on that like I think at least we get in the next, you know, I don't know, couple of weeks to couple of months.

[00:55:03]>> Yeah, >> I think we get a little bit like it comes from somewhere and I think there's some I I think this SMH rally is covering up a lot right now.

[00:55:13]I think I think that is a huge underlying theme. Uh two two things came in as we were going through that. We can do I think we can do both of these pretty quick and get out here in the next couple minutes. CC uh Joe saying, "Can you please repeat the 725700 spy spread you went over? I didn't get a cost of $6, so missed something."

[00:55:36]>> Okay. He might have been the It might have been the wrong month. So the spy, let's just go.

[00:55:47]So August, this is this right now. What did he write?

[00:55:54]>> Uh, can you please repeat the 725700 spy spread you went over? I didn't get a cost of $6, so must >> 735. That's what you missed.

[00:56:04]>> Yep. Okay, sweet. Good to go.

[00:56:06]>> 735700 in August. And then in the Q's it was um uh let me just see real quick.

[00:56:14]The Q's was 725.

[00:56:18]That's it's weird that they're the same price and 675. Yeah.

[00:56:23]>> Weird.

[00:56:24]>> So um 725 675 is about 12 bucks. You know, you can move that like a little bit lower. Yeah, you could you I mean this is one if you like were really worried about your entire portfolio and you went out maybe to the end of year that's something where maybe you would do like a 700 start it a little lower because you don't want to waste money but that's something where you could do like a 700 650 or 700 625 put spread if you go out to like November or December and it's probably about I don't know the same roughly the same price or maybe even a less but yeah so 725 765 and this was September that we were looking at >> 100 left the AI is telling me >> one last uh one last ticker here Rob Hood saying if CC has time can you take a look at BTDR Bit dear do you ever look at this one CC Rob said just noticing heavy option volume every day >> nice he should know better than to ask me [laughter] if I've heard of anything.

[00:57:38]Um, anytime >> I I was asking you that.

[00:57:42]>> No, every time you bring something up, I'm like, man, that's wild. What do they do? All right. Well, let's [laughter] first of all, let's start with what they what they do. Uh, cryptocurrency mining.

[00:57:51]So, they're telling me they're going to energy.

[00:57:54]>> I don't know. I don't know.

[00:57:56]>> Is that the thing? Because like rallying on crypto. So my my guess is they're they're becoming company like Hut.

[00:58:05]>> And so isn't that what HUT did?

[00:58:07]>> Yes, absolutely.

[00:58:09]>> So all right. So this is the I'm looking at the HUT chart and this is what this looked like and it started breaking out and then this thing went from uh basically 50 to 130 in a straight line. What is it again? Bit deer.

[00:58:27]>> Bit deer. And actually Their logo looks like a Girl Scout cookie logo, but I see >> I think that they're still doing a bunch of digital like crypto treasury kind of stuff, but I'm I'm looking back at a March 30th, 2026 press release that says Bet Deer engages DCI to finalize development of Norway's largest AI data center. So, they totally are tangled up in data centers.

[00:58:52]>> So, they're in the AI thing. Okay. So, I'm I'm can already tell you what what's going to happen in the options. If you're starting to see this thing pick up and it's showing up on like the daily list of options, what's going to start happening, I am assuming it already did, is [clears throat] all of that upside uh skew will like massively skew to the upside because retail and everything is going to go buy, you know, essentially the cheapest strikes they can looking for a move. And so in something like this, what you would want to do is let's go to July and we should see it here. So if you were to buy like a 25 Oh my god, look at the open interest on that. So okay, this is what he's talking about.

[00:59:38]>> Holy cow.

[00:59:41]>> See that?

[00:59:42]>> Yeah.

[00:59:42]>> So the open interest is 70,000 on that, 50,000 on that, 60,000 on that. So, these are massive, massive numbers.

[00:59:51]>> And so, what you want to do here is you want to if you want to play for, you know, you put on a lottery ticket.

[00:59:58]>> What you're going to get rewarded for buying stuff closer to the money. So, like this 25 call, what was the top in this thing be? What was the prior high?

[01:00:08]So, the prior high was 27. So let's say you bought a 25 call and you sold a 35 call. So you're you're buying 127 V and you're selling a like 141 V and you're getting rewarded for that. And so this trade is like a$125 and you can make up to 875 if this thing goes to the moon. And you're going to find very similar stuff all through the chain here. And what you want to be doing, this is 35 is the top strike.

[01:00:43]>> Um, it looks like they just added it because it's got zero open interest.

[01:00:47]>> Oh, >> so the the top one, my guess was all of these big numbers were the prior highest strike and they keep adding a higher strikes >> and then retail runs out and buys those, >> right? And so what you want to be doing is when they you want to be selling into that kind of retail buying pressure. You want to be selling what everybody on Rob on Robin Hood is buying >> and buying something down below that they thought they couldn't afford because 90% of 95% of the people on Robin Hood trading options cannot do spreads or they could but they don't bother. They're just buying the cheapest call they can.

[01:01:28]>> Sure. And >> so you want to take advantage of that.

[01:01:30]you want to buy, you know, just buy the 25, sell the 35, and you're getting this massive skew for it, and it ends up being very, very cheap.

[01:01:39]>> Awesome. Good one there, Rob Hood.

[01:01:42]Thanks for the ticker, CC. Cool to rap here.

[01:01:46]>> Yes.

[01:01:46]>> Awesome. Another [laughter] >> It's like I went through allergy season and then it went away for like a week and now it's like back. It's like crazy.

[01:01:56]Yeah, the the um the cottonwood trees are going crazy in Michigan. I don't know if you guys have those.

[01:02:02]>> That's exactly what's happening, but it's kind of the late bloomers and it's like snow.

[01:02:08]>> Did the financials have an early tell before the great financial crisis?

[01:02:12]>> Yes. And it was shocking that uh Bear Sterns went out of business basically seven months before anybody like like it rallied back like the market rallied back. So everybody's like, "Oh, it's a one-off. What is this credit default swaps? What is everybody even talking about?"

[01:02:33]>> And then lean brothers.

[01:02:34]>> So you see some early signs and you're like, "This is it. This is the big one."

[01:02:37]And then it takes another year like Yes.

[01:02:39]So, it there's always some early warning signs and you got to just be careful that you don't get too geeked up too early.

[01:02:45]>> Rob Hood says, "Great insight. Very helpful from your college Philly brother."

[01:02:50]>> There we go.

[01:02:51]>> There we go.

[01:02:52]>> All right, Cece. Until Friday. Are you around Friday to hang out in >> I think so. Yeah.

[01:02:58]>> All right. I got to go get an oil change. So, you're going to be hanging out with Joel on Friday?

[01:03:02]>> Oil change? I just bought an electric car. I don't even know what that means anymore.

[01:03:05]>> Oh, okay. Okay. All right. All right.

[01:03:07]All right.

[01:03:08]>> Awesome. All right, folks. Have a good one, everyone. Later.

[01:03:11]>> See you.