Don Kaufman, Author at TheoTrade

Where the Real Selloff Starts

October 30, 2026

https://youtu.be/_tGzxa0gq54 The S&P 500 dropped 2% on what I’m calling Red Friday. The Nasdaq fell as much as 4.5% before it bounced. Neither move means the real selloff has started. That starts with correlation, and correlation hasn’t shown up yet. The S&P 500 only got about halfway to the lower edge of its expected move. The options market priced in exactly this kind of action. The QQQ ran from the upper edge of its expected move to the lower edge. It tagged that level on the button and bounced. S&P 500 futures have traded in the same box since May 4. That’s six months of going nowhere. The central point of that range sits at 7,560 in the December contract. The S&P 500 touched it today and bounced right off it. A real breakdown would leave the S&P 500 near 7,400, dangling off the edge of a cliff. We aren’t

The Volatility Futures Just Did Something They Haven’t Done In 6 Months

October 30, 2026

The volatility futures inverted this morning, and they haven’t done that in six months. VIX futures let traders bet on where the VIX, Wall Street’s fear gauge, will be in the months ahead. Normally, protection further out costs more. When they invert, traders are paying up for protection right now, and I’m not taking that lightly. What Happens When Market Makers Sell Into The Selling When the S&P sells off, market makers are dynamically trying to offset their risk. They’re not trying to buy. They sell into the selling to neutralize their directional risk. Now add inverted volatility futures. Any more selling inverts them even further, a ton of traders start taking heat, and they protect themselves by selling futures. It doesn’t mean we’re going down hard. It means if the market starts to sell off again, it’ll exacerbate the move substantially, and you don’t want to trade against what

I Heard This Same Talk On A Trading Floor In 2000

October 30, 2026

People keep telling me they’re getting killed. With all due respect, we haven’t even begun to sell off in the S&Ps. The S&P 500 was down about 1.3% this morning while the NASDAQ was down close to 3%. I heard this same talk early in my career, and the market looked exactly like it does right now. In 1999, Traders Bragged About Making Tens Of Thousands A Day In ‘98, ‘99 and 2000, I was working on a trading floor in Chicago and flying back to Scottsdale, Arizona, on the weekends. If you’ve ever spent November through May in Chicago, you understand why. I was 23, 24 years old, and almost everything we did on that floor was non-directional. Then I’d come out here, have some drinks at a bar and listen to people talk about the tens of thousands of dollars they made that day. By 2000 and 2001,

Where $13.7 Billion Fled Today

October 29, 2026

https://youtu.be/swQQ8-i-qxU Three out of every four S&P 100 stocks closed higher today. Blake Young still calls it a warning. He tracked the money underneath. $13.7 billion flowed into declining positions against just $1.7 billion for the winners. That’s a 12 to 1 ratio. Blake says a big move up or down usually separates buying and selling by maybe $2 billion. Extreme days run 8 to 1 or 10 to 1. The S&P 500 has traded in a very narrow range for three straight days. Blake sees more than a flat, range bound tape. To him, today’s failure to bounce shows the market rotating out of risk. He expects that rotation to last a while. XLK gapped down and closed down. Blake reads that as a runaway gap and wants traders exiting their technology stocks. Utilities and consumer staples are holding up as defensive plays. Utilities have already gained more than

Options Volume Fell 20% On Fed Day, And Nobody Can Tell Me Why

October 29, 2026

Only 56 million options contracts traded yesterday. That number comes from the OCC, the Options Clearing Corporation, which reports every listed option that trades in the U.S. For those of you that have never seen an OCC report, it’s your worst nightmare. No, it’s just option volume. Now, correct me if I’m wrong. There was a Fed announcement yesterday, positioning before the PCE data and positioning before some of the biggest earnings of the year, with everybody on the edge of their seat about AI. So why did only 56 million contracts trade? Where Did 15 Million Options Contracts Go On Fed Day? The year-to-date average is almost 71 million contracts a day, and October has been running about 73 million. If we’d done 63 million, I’d call that light. At 56 million, you’re 20% off the norm for this month, and that’s absolutely unheard of. No one participated in

Wall Street Is Hiding In The Banks, And That’s Insane

October 29, 2026

The banks were up 1.6% this morning while the NASDAQ was down almost 2%. With all due respect, it’s getting downright insane when you’re buying financials. Think about who’s holding the debt behind AI. If companies like CoreWeave go belly up, who do you think is holding a crapload of those notes? It’s the financials. Apple Is Trading Like A 10-Year Treasury Right Now We’re trying to rotate our way out of this by any means possible. Healthcare is ripping, and staples are getting bid. So is Apple. Apple is like a bond right now. I know that sounds weird, but until they screw the proverbial pooch on earnings, buying Apple is like buying the 10-year. The money is getting out of software, and it’s getting out of semiconductors again. Bonds spiked too, and people will tell you it was the PCE data. Nobody gave two craps about the PCE

Where I’d Short This Bounce

October 28, 2026

https://youtu.be/_8B2uyRjrhY The semiconductors finally got their bounce. I’m treating it as a bounce and nothing more. SMH looks like a classic rip your face off rally after a stretch of heavy selling. I want to short into it, possibly as early as tomorrow. That short won’t come from hammering futures until my hands bleed. I’ll build it as a structured trade with a defined risk spread. Today gave the market every reason to pick a direction. We had an FOMC announcement and two heavyweight earnings reports on the same afternoon. The S&P 500 stayed stuck in the middle anyway. The tape got choppy when Kevin Warsh hit the stage. It flattened out once he stepped off. Earnings delivered a split decision. Microsoft caught a fairly strong bid after hours, while Google came off hard and fast. I don’t care about earnings per share on these reports. I care how the

0DTE Options: How Same-Day Options Work and How to Trade Them

October 27, 2026

0DTE options, options with zero days to expiration, have gone from a niche product to one of the most heavily traded corners of the market. They can turn a small amount of risk into a big percentage gain by the afternoon. They can also go to zero before lunch. I’m Don Kaufman, and I’ve traded and taught options for over 25 years. 0DTE trading rewards preparation and punishes improvisation more than anything else I’ve seen. Here’s how they work, and how to trade them without blowing up your account. What are 0DTE options? A 0DTE option is any option traded on its expiration day. “0DTE” stands for zero days to expiration. Any option becomes a 0DTE option on its last day, but the term usually refers to index and ETF options that list an expiration every trading day: SPX: S&P 500 Index options, full size and cash-settled XSP: Mini-SPX options,

Why Software Ignored The AI Panic

October 27, 2026

https://youtu.be/USa1C7TP00c Software climbed almost 6% last week. Chips dropped 2.5% over the same stretch. Gianni Di Poce is pounding the table on software as it presses against resistance that’s held for months. That rally runs straight into the AI headlines. The media keeps warning that AI will crash the economy and bury software. Traders took the other side of that story anyway. Gianni reads the move as proof that sentiment follows price. This week brought a second encouraging sign. Defensive sectors led the market for three straight weeks before it started. Utilities finished on top three weeks ago. Consumer staples led the following week. Energy took the top spot last week. Gianni calls those flows the opposite of what bulls want to see. Technology stormed out of the gate this week instead. The Nasdaq climbed about 1.25% on Tuesday, with semiconductors up almost 3.5%. Gianni puts that chip pop in

The $25 Trade Everybody Tells Me I’m Crazy For Making

October 27, 2026

Every Sunday night, I put one number on the S&P 500 chart. It’s the expected move, the range the options market is pricing in for the week, and I grab it at 3:17 p.m. Central on Friday. This week, it’s $153.49. On Monday, I put on a trade aimed right at the bottom edge of that range, 7,470 on the S&P 500 index, or SPX. It cost me 25 cents. That’s $25 for a one-lot, which doesn’t even get you a decent meal at McDonald’s. Everybody’s telling me, “You’re out of your freaking mind, man. We ain’t going all the way down there.” Good. I like it when people say that. Why It’s So Cheap The trade is a put butterfly. You buy one put, sell two puts at a lower strike and buy one more put below that. It costs little, and it pays the most if the index

	Today
09.00	Don Kaufman \| Pre-Market Prep \| FREE SESSION 09.20 09.30 Don Kaufman \| Early volatility 09.20 10.30 Jeff Bierman \| Market structure 10.30 11.30 Brandon Chapman \| Ghost Hour 11.30 12.30 Gianni Di Poce \| Macro overview 12.30 13.15 Elizabeth \| Price Action 13.15 14.00
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14.00	Corey Rosenbloom \| Options tactics 14.00 15.00
15.00	Blake Young \| Market wrap 15.00 16.00

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