You’re trading the wrong session. 30 years of data says so. Columbia Business School, Purdue, and UC Berkeley all ran the numbers and reached the same finding. Strip out the overnight returns from the S&P 500 and average daytime returns over 3 decades ran flat to negative. Take $1, put it in the S&P 500 in 1993, and collect only daytime returns for 30 years. You’ve got $1. Collect only the overnight returns instead and the number looks completely different. The institutions figured this out a long time ago. Nobody told regular traders. Nobody built a way to trade it. I was employee 13 at thinkorswim, then 13 years at TD Ameritrade running options education for 7.5 million traders. I saw every mistake they were making and what the big money was doing with the overnight window. That’s where I started building. Every major stock has what I call an

The market barely blinked at the hottest PPI print since 2022, and oil’s pulling back while bonds are still screaming and Nvidia earnings are the only thing anyone cares about tonight. Meanwhile, I went on the Schwab Network this morning and walked through something that probably looks insane on the surface, which is taking a bearish position against a stock that just ripped 82% in 12 months and went parabolic in the last 30 days. I broke down three defined-risk spreads I’m working right now, including the freight train I’m willing to step in front of with a $3.15 debit.  Here’s what’s inside the replay: → Why I’m bearish on an old-tech name that’s suddenly trading like it’s 1999 again, running from $90 to $120 in what looks like a straight vertical line on the chart. → The health care play that failed to break a major psychological level and

My order hit the bid and didn’t fill. That doesn’t happen to me. Maybe five times in my trading career has a market-limit order failed to fill the way that one did during this morning’s session. The bid moved 50 cents in the time it took the routing engine to do its job. When that happens, you’re not looking at a quiet market with mild sell side.  You’re looking at a market where the desks on the other side are choking.  They can’t hedge fast enough, so their servers are throwing everything at the hedges because the positions themselves are getting thrown around so wildly they have to re-hedge every couple of seconds. Price tells you nothing in those moments. Watch the fill quality instead. So here’s the setup from this morning’s tape. The S&Ps opened down half a percent. On a 7,000-point index, that’s not even remotely interesting. Volatility

Cisco’s expected move yesterday was $9. The stock moved almost $18. That’s a two standard deviation move — and the chart is a wall. A few days ago, Cisco and Intel both took out highs they hadn’t seen since March of 2000. Twenty-six years ago. I was a young buck back then. I remember what this kind of move looked like the first time. Most traders are looking at Cisco and Intel right now and thinking these are fundamental stories. They’re not. They’re mechanical ones. Now to be fair, these tech stocks actually make money. That’s the part where it’s unfair to compare to the original internet bubble. But the mechanics underneath the moves are the same thing in a new costume. Dealers get short call exposure as customers buy upside. They buy the underlying to stay flat. The price runs to the next strike, the short gamma compounds, dealers

The market is pricing in peace for the 43rd time, plausibly. PPI just printed the hottest number since 2022 and the tape barely moved. Half a percent here, a quarter percent there. Don’t worry. Tech can cure everything. I get nervous when it’s this quiet on data that hot. That’s the trade. I sat down with Schwab’s Big 3 this morning and walked through three defined-risk spreads I’m working right now, including the $50%-year-to-date name I’m willing to step in front of with a $6 debit. Here’s what’s inside the replay: → Why I’m bearish on a 50%-YTD industrial that’s now trading like a tech stock with a 45 P/E — and the $20-wide July put spread I’m using to clip $14 of upside on a stock that needs to fall $80 before August earnings… → The gold trade I’m taking after the most surprising session I’ve seen on a

A guy I worked with got duct-taped to a chair. This happened more than once across about 20 years.  He could not stop himself from closing positions early, so a few of us literally taped him to the freaking chair until the trade played out. He was not a small guy either, and it took a number of people every single time. I’m going to tape your hands to your seat today, because you need it. This morning in the chatroom, I walked through what is happening in SPX. The big trading firms, the dispersion shops, are selling boatloads of naked options in SPX and using all that premium to buy calls in single names like AMD, Intel, Nvidia. They are taking premium in one place and applying it somewhere else. That part has been going on. Fine. Here is the part that got crazy. In the last few trading

In 1998, I lost $82,000 in 17 minutes on Qualcomm. I was 22 years old, sitting on the market-making desk, naked short calls. The stock started moving. I turned to hedge and the thing was already up $10. I said out loud, “I’ll wait for it to back off.” Before I could do anything, it was up $50. It’s 100% my fault. I knew that then. Still know it now. I had to walk upstairs and explain myself. Twenty-two years old, convinced every mistake meant I was getting fired. I had to wear Depends that day.  The guys upstairs were pissed about the loss, but not really pissed at me. “You handled it right. You got out. Could’ve been a hell of a lot worse.” That was my gamma squeeze education. One session, 17 minutes, $82,000. I’m thinking about that morning a lot right now, because Qualcomm just did it

The whole market has turned into one giant gamma squeeze. I was about to write that exact thought this morning when I saw a tweet from a trader I respect who said the same thing first.  He beat me to it, but the observation is right and the data backs it up. Yesterday alone, $2.6 trillion in call options changed hands.  That number is not a typo. It is the largest single day of call volume on record, and it is happening alongside a market that does not seem to care about earnings, valuations, jobs reports, or oil rallying to nearly $100 a barrel overnight. Here is what a gamma squeeze actually is, in plain English. When traders buy enormous quantities of out-of-the-money calls, the market makers who sell those calls have to hedge by buying the underlying stock.  As the stock rises toward the strike price, the market maker

The market is pricing in peace for what feels like the 35th time this week. Peace sells. Marketplace is buying it. AMD didn’t hurt either. But under the hood, advance-decline is still scattered. Correlations broken. Gamma gone wild in one name in particular. That’s the trade. I sat down with Schwab’s Big 3 this morning and walked through three setups I’m working right now — including the freight train I’m willing to step in front of with defined risk. Here’s what’s inside the replay: → Why I’m fading the most aggressive gamma squeeze in the market right now — and the $3.30 June put spread I built to clip the volatility risk on a stock that just went from $40 to $111 in five weeks… → The streaming name where economic headwinds, fuel prices, and summer seasonality all line up against subscribers — and the $2.75 July put spread targeting

The market is up this afternoon, but most stocks are not. That sentence does not seem like it should be true, but here are the numbers as of mid-afternoon.  On the New York Stock Exchange, 785 stocks are trading higher and 1,976 are trading lower, which means roughly two and a half stocks are red for every one that is green. The S&P 500 is up about half a percent anyway. You see strength in that tape? Here is what is actually happening. A handful of large tech stocks are pulling the indexes up while the rest of the market bleeds, with chips and memory stocks doing all the lifting.  If you own anything outside of those names, your account is probably not feeling like it is having an up day, and the headlines are lying to you. This is what most retail investors miss when they look at the