How Positioning Moves Markets with Cem Karsan, CIO of Kai Wealth

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It.

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Good morning everyone. Welcome to this live session this Friday. We have a lot to talk about, but I'm very excited to be here. And together we have Ryan Darnell which has been with us over the past few weeks. So you guys have probably seen him in some of our lives. And a special guest, Cham Carlson, founder of CIO and CIO of KAI Wealth. And both Ryan and Cham have over almost two decades of experience in the financial market in market making structure and derivatives. So I'm very excited to have you guys here and we're going to go over some token coins today. We have a lot of things happening in the market, but before we go, I would like you guys to maybe give a short introduction about yourself for those who don't know you.

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Ryan, do you want to lead? Sure.

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So Ryan, Darnell, for those of you who have listened to our volatility corner session every few weeks where we round up volatility markets and what options markets are telling us about market predictions. I'm currently the founder and chief investment officer of Senecal Capital Private Investment Fund. I have about 17 years now of experience running futures on options trading desks. Currently also managing some exotic options risk for a few different commercial clients.

[00:02:14.21] - Speaker 2
Awesome. And I'm Jem Carson, otherwise known as Jim Croissant on social media. I am long history here in the options market. Started in 98, 27 years ago. I'm dating myself but very different world. When I started in markets, eventually built one of the bigger options market making groups in the world. We were actually at our peak 13% of the volume of the S&P 500 options and more than 10% of equity option volume. Through the great financial crisis. So long time ago markets were very different. But I like to tell people I started when the box was much simpler. You could open the front and take a look at how all the gears worked and now it's a black box. So that's given me a little bit of a, I think some insights into how some of these things work. So excited to talk about kind of the flows and, and everything here. We we now run a a set of volatility funds both for hedging purposes as well as for directional trading. And last of all, we have a wealth advisory business that gives non correlated wealth advisory allocation and investment advice.

[00:03:27.12] - Speaker 1
Awesome. Yeah. And basically like today session is going to be about flow and we had some really interesting move in the market just before we connect it. So I think what would be, I think very great for our users is to understand your take of what's going on right this morning. And then we can go into the importance of flow for even retail traders that do not really trade options. But even if you are a futures trader I think it's very key to understand how option can shape the market. And with your guys experience understanding that would be very important.

[00:04:00.03] - Speaker 2
Yeah, look the reality is even though this is not what you hear in most financial media that day to day, hour to hour, week to week, even month to month, year to year movements and markets are not generally a function of some geopolitical or macro setup. It's a function of liquidity. It's a function of how many buyers are there versus how many sells dollars. And people get very wrapped up in the, the macro goings on of the world. But the reality is who's buying and who's selling and why is critical to the outcome. And flows, a lot of these flows are not based on opinions, they're based on structural effects that exist in the market. And one of the biggest has always been big but has is even bigger than ever these days is the actual non linear positioning in the market which is structured products, options and non correlated vehicles. And so understanding their structural effects and the flows are critical to outcomes. Importantly not only is it critical, it's actually somewhat predictable because it is structural and it operates in a certain way. And that can be a huge source of edge. Right.

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In a world where prediction is otherwise quite hard. So I think those are kind of the reasons and why options volume is bigger than it's ever been. It's been growing exponentially. My theory is that that is, and I've been saying this for four or five years that this is still the early innings. I think options will and are in the process of eating the whole two sided underlying market. And we can get into all that. But yeah, knowing this now you're still not, you're not late, you're still early. If you start to learn this stuff at this day and age.

[00:05:47.25] - Speaker 3
That reminds me, it's a great point because you know when I was running the desk at Deutsche bank, you know clients wanted to call every day and the sales team wanted to know every day why is the market up? Why is the market down? They always needed a reason. People have this just innate craving, this innate hunger for needing to understand why. But they always wanted to hear you know, a story. But, but the joke on the trade desk was we'd always give them a story. Oh like crude's up because this happened in the Middle east or interest rates or dollar but at the end of the day we'd always turn to each other and say like, more buyers than sellers.

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More buyers than sellers. That's exactly, it's that simple.

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So, you know, we always chuckled at that because, you know, exactly as you said, we were thinking about kind of these little details which we weren't trying to, trying to always tell this big picture story.

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Right, Absolutely. I couldn't agree more. But like I said, it's the beauty of these flows is much of these flows, which are quite significant in this day and age, are largely predictable, not predictable in terms of necessarily up, down, but in terms of what they mean in terms of movement in time, movement implied volatility, movement in, you know, in the underlying of what that means for ball effects, etc. So I think that's the hard part for people and that's part of what we'll be talking about today is, is understanding that these flows are not just directionally indicators in terms of up down, but they are very conditional indicators on a broad distribution of time and space. And so they're very valuable for modeling that distribution, but not necessarily modeling up, down always.

[00:07:35.09] - Speaker 1
Yeah, yeah, I think that's very interesting. And I think like we, most of our users within our community are traders that do look at options, but they're mostly also looking at futures markets. So maybe like we can go over the importance of all this option activity, how it can also shape kind of the future market and future trade. So even if you are trading futures is very key that you pay attention to the option market because that's going to have an impact on the direction and the risk that you might want to take.

[00:08:07.06] - Speaker 3
So yes, Jim, I guess I'd ask you first what you know from, from your perspective. I don't know how much directional trading you, you were typically doing throughout your career. But you know, how would you, how would you let the options markets influence your directional trading first? I know, I know, I agree with you. It's, it's often less about up, down and more about kind of risk distributions. But, you know, but the obvious one for all the listeners, right, is like, okay, how can I use this to know if it's going up or down?

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Well, I think the key here is, is up down can be part of the prediction. I'm not saying that that's not part of it, but, but understanding the different outcomes is way more valuable.

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Right?

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I'll give you a great example, you know, and this. And we'll get more into kind of where we are, where we're going now. But you can have a very high probability of a right tail outcome in the next three months.

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Right.

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While simultaneously having a very high probability of a stair step down in the next month. Right. Those two things can simultaneously be two of your higher conviction bets. Right. And holding those two things in your head at the same time is confusing for most people. You know, I can tell you right now that the odds of a small decline, meaning a couple percent, is very low in the next three weeks, meaning 2%, 3%. I can tell you the odds of a 10% or more decline in the next three weeks is very low. But I could tell you a 4 to 7% decline is actually quite high. And that idea is very confusing to people like, because people like to think in two dimensions. It's easier, it's simple. But, but the important part is understanding how these flows operate and what they mean to that distribution simultaneously. I think the odds of our small steady grind higher in the market for the next three, four months is actually quite low. I think if we're going up, we're going up big and that's a very different outcome. And actually how you want to position for that optimally is very different.

[00:10:18.01] - Speaker 3
Yeah, you know, it's, I love that you bring that up about how people really struggle with those probability distributions and the fact that it's not just a norma that we have these fat tails. Because I remember one of, the first, one of the first studies that I did when I got into the industry. I kind of always learned in school, oh yeah, well, you know, so the stock market traditionally goes up 8%, 10% depending on what, you know, time series. You're using a lot more lately. And so I went looking at historical distributions to think about kind of my tail risk and different things like that. And you know, the immediate thing that popped up to me when I actually bucketed the returns was there are almost no years that were 8% or 10%. They were almost all, you know, above 15% or minus 20%, minus 25%. You actually, it's actually an outlier to get up 8%. So people don't realize that just because on average your expected value is to make 8%, that's, that's very much a long game. So in a given area, we're far more likely to, to have an extreme move up or down.

[00:11:21.05] - Speaker 3
So that's always sort of remarkable to me. We always talk in our volatility corner about like, use it to size your trades.

[00:11:28.11] - Speaker 2
That's exactly right. And I, and that's true for all time intervals. That's true for, you know, weekly, daily, but also long, long term. And I know that's not an options focused thing, but you're talking about long term returns, annual returns. One of the interesting things we talk to clients about is, and this is again, we probably won't dive much more into the big pictures like this because we're going to be options focused today. But I do want to make the point that in 125 years of data we actually have three periods of 20 years where in real terms markets don't make money for 20 years. That's a pretty mind blowing thing. A two decade period. That markets don't make money in real terms is an unfathomable thing. But the last 125 years, 60 of those 125 years and if you just chop them into block it, the blocks, that's what happened. And, and, but meanwhile the average returns for the S P 500 in 125 years is 10 and a half to percent. Right. And so people, investment advisors, sit out there and say, hey, just stay long for the long run. Well, yeah, you're talking 125 years.

[00:12:38.00] - Speaker 2
I, I'd be with you if you're talking about 50 years, you could probably make that argument. But there are 20 year periods where you could not only go sideways but potentially even lose a significant amount of money. And that's, that's hard for people to keep in their head at the same time.

[00:12:50.11] - Speaker 3
Well, when we look at international markets, right, it's even more extreme. I mean for some of these international equities, markets that have less history, sometimes even half of their history, they didn't go up. I don't know exact numbers, but you look at the German stock market, the Japanese stock market and you, you can actually say for most of its history it wasn't going up. You know, if you take out a few big runs, a few big kind of 10 year macro runs, they're big net losers. Especially in real terms as you point.

[00:13:15.02] - Speaker 2
Out that 125 years I'm talking about a very good point is, is of the empire, right? It's like the building of the United States market. So yeah, and, and I think it's really important. And actually I said of the, of the equities, I was about 60, 40, 60, 40 portfolios. People that come at me like what are you talking about? 20, a 60, 40 portfolio has achieved nothing for 20 years. Three different times last year, 25 years just to clean that up. But, but yeah, I think, yeah, we're talking about the US Exceptionalism, the reserve currency of the world. All these, all these other elements. Right. You know, again, you go to emerging markets, very different story for sure. So. But yeah, we can zoom in a bit there. But distributions matter is the big point. It's, it's not just what is your time frame, what is your distribution. And ironically that's a much easier thing to predict. I want to drive that home. That sounds complicated, but that's actually a way easier thing to predict. And if you can do that, you can make a ton of money. Actually probably more on knowing that than up, down, and.

[00:14:14.06] - Speaker 2
And again, people have a very hard time capturing those, all those ideas that this is. Okay, I should be focused on on the much more complex distribution. I can make way more money off of that. And it's much more predictable than trying to just play two dimensions. Remember, when you buy the underlying asset, whatever it's, whether it's a stock, a bond, gold, whatever, you're taking on all of the risk of the distribution. You're taking every single moment on the distribution on your books. I'm guessing most people, when they bet on things, don't actually want all the moments of the distribution, don't want to make a bet on all their opinions are probably much more unique to some, some set of outcomes. And the key is focusing enough and understanding what those moments are and which ones you think are undervalued and which ones you think are over and expressing it in that way. And I really think that's critical now. The beauty is we have the ability now and the liquidity to trade all the moments of the distribution. And this is why options are eating the entire market. We really try and tell people options are like superior technology.

[00:15:19.10] - Speaker 2
Instead of playing in two dimensions, you get to play in three or four, depending on how you look at it. Why in the world would you still live in a flat world? Why would you still play in a flat world? It makes no sense to me. Never mind. You don't have to understand, by the way, all of the things that I understand and the eight signals and everything else to take advantage of simply the precision provided by using an option as opposed to an underlying. And the world is waking up to this. And this is why volumes have been exponentially growing since I started the business, but particularly in the last five years, you know, you'll remember in 2020, everybody was like, whoa, this option, boom. It's crazy. This is a short term thing. It's all about the tendees that people are just. I was very clear in 20, 20, 21. No, no, this is the acceleration. We've hit a tipping point, right? And this option adoption and you can expect this to really accelerate. But much like a technology network effects eventually. You know, some technologies are better but they take a long time to adopt.

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But when they do, they can go vertical. And that's really what I think we're seeing in the option space.

[00:16:24.02] - Speaker 3
I think you brought up a great point there about like which moment you want to participate in. Because one of the most common things I, I see when I talk to kind of your, your, your average person who's new to investing or getting into it, they'll, they'll state a specific thesis. You know, it's like, well, you know, I want to buy Microsoft because I think the release of this or I want to buy Apple because the release of that product is gonna, is going to cause, you know, a successful, you know, earnings quarter, a nice rally. And to your point, they're looking for one specific bet. They're not looking for all the different tails and all the things. Well, what does that have to do with Federal Reserve and interest rates like you know, we're going to talk about a little bit today. And what does that have to do with the broader macro concern you're trying to. Specific view. So how do you get access to just that specific view? You know, is it to. And obviously it's a little bit trickier, especially historically for our retail traders. I mean go short and index and do spread trades like, like a professional kind of market maker or hedge fund would do.

[00:17:27.11] - Speaker 3
But we're starting to have those things available and with options you can pretty easily replicate that, right? You can be longer put on the S P and long a call on, you know, on, on Microsoft or something if you have a bet like that.

[00:17:41.14] - Speaker 2
And, and, and that flexibility and actually I would call it precision, right, of being able to take the outcome that you want and eliminate the outcomes you don't want. Right? Is allows for a very efficient risk reward. That's the key, right? If you, if you take the other risks, you're muddying the, the benefit you're getting on a risk reward basis for the edge or value that you have with a bunch of other risk and things that you don't. Lastly, I'll add to that the other benefit of using options is they're very capital efficient because if you only take one moment on the distribution out of an infinite number, the amount of capital and requirements to take that are much smaller. And in a world where interest rates are no longer zero, but you know, four and a quarter for now you know, matters. And there's a reason that options were created and the options exchanges were launched in the early 70s. Hedge funds started in the 60s and 70s because when interest rates go higher like they did in the 60s and 70s, capital efficiency and flexibility to bet on more non corollary dynamic outcomes is much more valuable and much more important.

[00:18:51.05] - Speaker 2
So this has been better important for a long time and it's grown at a steady rate and the infrastructure and network effects are leading to a tipping point. But the other thing that's driving it is quite frankly we're in a much more nonlinear world and there's much more of a need for non correlated investment in capital efficiency.

[00:19:09.17] - Speaker 3
Yeah, I love that, that word choice precision because, because that is exactly what you want in investing. You want to express a specific view and you want to have a specific risk reward. I'm also glad you brought up risk reward because that's one of the things we hit on on my volatility corner all the time. Because the biggest problem mistake that I see from, you know, retail investors is that they come in and they say, well I'm long this in case it goes up. Because I think it's going up. It's like okay, and what if it goes down? Wouldn't you know? And they're like, well I don't know, maybe I'll buy more. Okay. Or will you sell like, you know, because people are very bad at predicting how they're going to behave, you know, when things actually happen.

[00:19:45.23] - Speaker 2
Right.

[00:19:46.04] - Speaker 3
Like the greatest quote, the wisest philosopher of all time was Mike Tyson. Right? Everybody's got a plan until they get punched in the face. And so I'm always telling people, you know, you gotta, you gotta think about the risk reward on your trade and you'll see that it's not just me me, it's, it's. Anytime you listen to a professional, you know, trader, that's the first thing they're going to talk about is risk reward is how much are you risking to make. And you know, a lot of, a lot of traders toward the lean want to lean towards being long tails. Hey, I want to make three for every dollar that I'm risking. Other traders can go the exact opposite. You know, Maybe I'm risking 10 to make one, but, but they're thinking about that all the time. They're thinking about their odds, right? So I mean to me that's the key. And we can actually get with, with your choice of like words, precision we can actually see in the options markets from implied volatility from sku, we can actually see what the probability of these particular risks and rewards is. Right?

[00:20:34.02] - Speaker 2
Yeah, I couldn't agree more. I mean a lot of people attribute like the most important, you know, thing they think to investing is being right, being getting that the direction right up and down. I would argue the hardest and most important thing what makes a really good investor or even trader is understanding risk. And that's little more complicated but that involves distributions and understanding kind of where your return is and what you're risking to make that money. I couldn't agree more. Options are perfect for exactly that because of that precision.

[00:21:10.10] - Speaker 3
Yeah. When I was, I was looking at some research on why people often underperform the S&P 500 and you think it'd be because they buy a really bad stock. But interestingly I think the average stock that like a retail investor buys often beats kind of like the median stock in the index. But the problem is they often miss out on it on a tail, on a good tail in this sense. So many times they'll miss out on a no name stock that goes up thousand percent or you know, 10,000% and sometimes those can be one of the key drivers of your performance. And so you know, again, so the district, you just can't use that word distribution enough. And for everybody on here, like you know, if you're not, if you're not familiar with that, that's something you want to just pound into your head. Right? Like thinking about distribution markets, looking at those, those volatility smiles and because that stuff is just absolutely critical.

[00:22:02.11] - Speaker 2
Can agree more.

[00:22:06.07] - Speaker 1
And I don't know if jam you want to maybe comment also a lot of our traders use 0dt's options and I think we're seeing like an, a great increase. I think especially I think February was the biggest month this February that we had from the latest research that I, I saw. But basically understanding how that can actually shape especially if you're trading futures or even if you're trading SPX0DS. How can that flow and how can you know, you forecast. Our market makers may need to adjust their hedges when looking at the release.

[00:22:42.25] - Speaker 3
Yeah.

[00:22:43.01] - Speaker 2
A couple things about zero dt. Why is, let's first start with why is zero DTE exploding? And, and why are people using it more? One, because it's much easier for your average investor to think about distribution without time effects, without implied volatility.

[00:23:02.15] - Speaker 3
Right.

[00:23:03.11] - Speaker 2
To say I'm making a bet and I want to know, you know, making A bet moneyness, you're removing that kind of third dimension. You're getting shape, right? You're getting moment on a distribution but not dealing with the time and the implied volatility importantly effects those, those become more complicated and again, most people would prefer not to take those risks because they don't have to. And I think that makes sense, I think that makes sense for, for people to place their bets in the most tied to the opinion that they most clearly have at that moment. The other thing is distributions are constantly changing, right? And so you'll by being able to bet that day, then the next day you can model your next distribution and do that. And it's a way of segmenting kind of bets. It's essentially bringing in the $500 trillion of long stocks, bonds and other assets, you know, in a more accessible way using the benefits of, of options. And again it's, I'd say it's the next step after let's say trading the VIX or a future. Right. It brings out the, the dimensionality and get the benefits of actually trading direction but without that, that complexity.

[00:24:21.09] - Speaker 2
So I think that's what's been drawing people in. The other big part that people don't know, which is very important, is that market makers can't hedge zero dt with anything but zero dt. So any trading that happens in zero dte gets hedged out in zero dte, which increases more volume. Right. To that specific part of the distribution. Why it's the most convex moment in the distribution. There's a dramatic difference between trading a one day versus a two day option. It is almost impossible to do that. Well, at least at scale if you're a market maker. So, so you know, the SIBO will often taunt like, oh well, like all this talk about, you know, the lack of balance and you know, 0dtes being dangerous hogwash. Because quite frankly, you know, look, the data says market makers are flat 0dt at the end of each day. Well, yeah, because they're flat. Because they have to be at least, you know, kind of in terms of deltas and Greeks and, and whatnot in the 0dt or, or within the day. So I, I think that's, that's important, important part of why the volume is so high there.

[00:25:33.29] - Speaker 2
But importantly, you know, so you have to really think about these, those effects directly, you know, for what's trading there. It's going to affect the outcome on that day and it's going to affect the outcome, you know, not really the next day or the day after really just on that day. And importantly, because there's a loop and market makers only hedge zero dte. With zero dte, it can create cascades and we've seen that several times. If a big enough order comes in, you know, market makers can't distribute the risk out to the rest of the market. You know, they have no other place to go. Then guess what? Then they're going to have to go cover in into an illiquid market that can be particularly dangerous. We've seen several times in several days in the last several years where a big order goes up and then all of a sudden everything the market moves right to strike, right and, and big moves all of a sudden from an otherwise kind of quiet market. So they do have major effects. Watching that flow and understanding, you know, what it is likely to do at that moment is very, very important.

[00:26:40.13] - Speaker 2
But you also have to understand that it is, these are very short time frames that we're talking about. So you, this is not something you can digest like hours later and say well that's going to do X or.

[00:26:50.05] - Speaker 3
Yeah, I can absolutely confirm what Jim's saying there. Like, you know, in all the years of running different market making desk, when we would get, when our options would start to get down to kind of two one and finally zero dte, we just, we're out of them because it really takes a special level of expertise. I mean it was just not something we wanted to specialize in. We felt like we had a lot of edge and trading the kind of medium to long term options and we knew when we were in over our heads. And you brought up another great point about how people say oh, it's going to add all this risk. There's always this industry reaction. One of the reasons I love midorq is because there's always this industry reaction. Retail guys, they don't know what they're doing. They're going to get blown out. They shouldn't be trading these 0 DTES. But I've been thinking a lot about it, especially getting ready for this call. And I do think it's, it's going to be a big net risk reduction for a lot of retail traders. And it's because you get brought up about the time you're removing that time element, that more that complexity.

[00:27:50.04] - Speaker 3
Because if you're short like a low delta option, right, where you really get beat, beat up is not the market move against you, it's after it moves against you and then the panic comes in and then the value of that option starts going higher and higher and Higher because people are paying more of a premium option than before. And so you can start to see these exponential losses on these things. Right. You know, you start with an option that you were short for a dollar and suddenly it's 1050. And so I think zero DTE is nice because you remove that time element, you remove that vega element. For those who have kind of, you know, watched some of my stuff about where we talk about vega, you're basically saying that, hey, you know, you, you've picked that specific moment, you're betting on what happens today. And at the end of the day that's going to be, you know, not fixed. There's obviously a distribution on moves, but then you're over and you get to play that game again the next day. So you're not, you're not suddenly having to buy back not only the losses of today, but the losses of next week and next month, which can already be priced in when you're trading a longer dated option.

[00:28:53.11] - Speaker 3
So I think it can be net risk reducing, you know, for a lot of customers who, a lot of, you know, retail traders who historically would have just gotten into a position in a stock and then held it and maybe, you know, they hold it and hold it, they're bleeding, they're bleeding, they're bleeding and then they're puking out after a week of losses rather than one day.

[00:29:13.27] - Speaker 2
Yeah, if you think about it, 0dte is most dependent on the actual underlying. It's the highest gamma. And I think a lot of, think of 2022. You know, there are a lot of situations, I go back through all the years where we've seen this, where the market goes down and puts get destroyed. Right. Because of the implied volume in them. And the sku, you know, these, these, these options which people think are going to give them some type of hedge don't really work as well. And, and I think there's been a lot of frustration by people who, trading options that don't understand those vega and skew components that like, why did, why did I lose money on this hedge ultimately? And I think a lot of that has, you know, draw people to the simplicity, like we were saying of, of betting on the underline, which is what people are really trying to do. It is about betting. And that's a, that's a taboo word in trading. But you can call it whatever you want, but it is betting on an outcome. And if you go to the casino, imagine there's no edge. Like everybody's just trading point to point and there's Not a net casino.

[00:30:16.29] - Speaker 2
If you go and trade, you can go, go get, you know, a very specific long shot on a certain outcome. You can, you can do all these things and that flexibility is really what people are, are coming, you know, coming to markets for here in options.

[00:30:30.26] - Speaker 3
Yeah. And like you say, I mean, betting is often seen as a bad word, but at the same time, we often use the analogies of poker when I'm kind of teaching my sessions. Because at the end of the day there, you'd like to be the poker player who has the edge. Right. You know, you'd like to be the player who, yeah, you're going to fold a lot of hands, you're going to lose a lot of hands. But on average, you know, if you in the game and you size your, your, you know, your, your bets appropriately, you know, you're going to be gradually building, building that stack, right?

[00:30:58.21] - Speaker 2
Absolutely.

[00:30:59.20] - Speaker 1
It's a good analogy. I like it. When. So there's a lot of talks about, we get a lot of questions about key levels. We provide, of course, gamma levels for stock CTFs and indices. How, what are, you know, the things that you look for during the day to understand if a level will hold and then how do you place your bets based on, on that and what are the tools that you are looking for? For.

[00:31:28.02] - Speaker 2
Yeah, I think importantly, you know, a couple of things. One, I think there's a lot of focus on kind of gamma supplied at certain expiration.

[00:31:38.06] - Speaker 1
Right.

[00:31:38.17] - Speaker 2
Strike. You know, I've said this for some time. You know, that's. That stuff is. First of all, getting that right is hard. Right. It's harder than just looking at the options markets. Why? Because there's a ton of structured products. There's a ton of over the counter. There's a bunch of things that are not well documented on the option side two or traded publicly. Two, understanding who's holding what is important. Yes, there may be a lot of trading or open interest on a certain strike. But is that open interest held by dealers or is it held by. And what dealers are holding it and how are they hedging it? I think that's, those are critical dynamics in terms of gamma. But more important than all of that, let's say we get the positioning right. Let's say we know who has what and let's say we understand their re. Hedging or their, their effects, you know, what they're going to do given a market move. I would argue that the gamma effects, generally speaking, are only really dominant and critical. Maybe, you know, 10% of the time they are, they are much more important into a, into a bigger decline or a bigger move.

[00:32:49.24] - Speaker 2
Right? The, the more important things more often doesn't mean gamma's not important. It's just when it's important it's really important. And then, and most other times it's not. The, the other parts that are probably more important in my mind are, you know, the vana and charm effects that I talk so much about. Right. The, the effects of, of as implied volatility moves and, and as time passes kind of what are the flows and when are those coming? And those are much more predictable and they are, they're massive and they, they matter maybe the 90% of the other time, right. Maybe with less impact and less convexity. But, but they have, they matter critically to outcomes. And, and so I think, I think it's important to look at all those. It's also important to understand how they all interact because as time passes and deltas get bought back, that can compress volatility which can buy, create more buying that can also decay into longer vega, which can then put, put more ball on dealers books which can then you know, these things can create loops both down and, and up. And understanding those dynamics and how all these things kind of interrelate are critical.

[00:34:00.03] - Speaker 2
So point is, and we can get more into all of that if you'd like, particularly on a charm side. But the gamma part is easier. Again, people that are kind of more used to two dimensional markets are much more drawn to the effects understandably of gamma. Right. Because it is about the underlying move and some compression of all or exaggeration of all in that underlying market on a realized basis. And so my view is, is generally speaking the option effects that, that are a little more confusing to people but yet much more valuable are actually these monoton things.

[00:34:40.18] - Speaker 3
Yeah, I mean something I'd add to that is, you know, I'd say that there's kind of, if I, if I was thinking about the hierarchy or the progression level, you know, if you think about like getting belts in martial arts or something of, you know, the first level of kind of trading or investing, you're not even thinking as a, as an amateur, which again, you know, kudos to just getting involved, but they're not thinking about risk reward and distributions at all. And then the next level is you start to think about these levels and then you start to ask questions like will this level hold? Will this resistance or support level hold? Will this, you know, gamma level hold? But then I'd say the next level, the Next step you want to take is not will it hold? Because ultimately those aren't very reliable. You know, as you said already, like predicting direction is tough. Is it going to bounce or not? But I think the bigger question going back to this distribution thing, which I just keep hammering on because it's such a good point, it's the next level question to me is what happens if it doesn't hold?

[00:35:35.24] - Speaker 3
What happens when it breaks, what happens when it bounces? You know, and so it's, it's starting to think about again those, those, those distributions in those tails. So, you know, personally I'm thinking about set, I'm thinking about building my risk reward to my trades around those levels. Not necessarily the pro, simply that, you know, if I've got my stops below one of these key levels and it doesn't hold, then I'm getting out because I don't want to participate in that tail, right? Whereas, you know, so it's, it's less, it's gonna bounce there. And I'm buying it because it's, it's at this level and I think it's bouncing and it's more about, you know, I've got a number of trades on and we've got to use risk management, you know, we can't, can't ride all these trades. We can't wear every trade to the bitter end. We just gotta, you got to cut your losses on some of you, move on and lean into your winners. And so yeah, to me that's really the next level.

[00:36:26.12] - Speaker 2
Yeah, I agree with that. And I actually think that I'll add the following. I think really thinking about time better and not just your own modeling your own distribution, but thinking about how the world, who is warehousing all this risk is modeling the distribution and how they have to then hedge, right, Those, those books as that distribution changes is critical. And that's kind of, I guess the last level, right, is like you have to at poker, there's playing your, the probabilities and then there's playing the player across the table from you and then playing the probabilities right. And, and I think that's, that's really what we try and do with the prediction is what are what cards is the other side holding? What is their reaction function, which is like their reaction function, particularly dealers, is that they have to keep some level of neutrality to their book. And given that knowing that time is moving forward, what is that likely to force them to do? And then how does that change the distributions of your outcome and how you should Play in the bet. So I think that really is kind of that final level where you want to get to.

[00:37:39.02] - Speaker 2
And that's where the value of understanding that open interest is. But again, understanding that open interest is not just about Gamma, it's about the full distribution that the other side is holding and they're re hedging. That has to happen as a function of that, both in terms of Gamma, which is what people talk about, but importantly in terms of time passing, implied volatility, moving. And so that's kind of the process I would follow if you want to get to that final step.

[00:38:05.01] - Speaker 3
Yeah, and in poker, we have the same. Like when you're running poker, just like you say, usually the first level is to figure out the problem. You know, the first person just likes to play and learns the rules. The second level, you learn the probabilities. And then the third level you went, you learn when to ignore the probabilities. Right. You learn when you have to play the other person's card. So that's, you know, again, the analogy is great there. So, yeah, I'd love to hear as well about the violin charm, because I, you know, I confess those have been things that I've ignored more myself. I mean, I think there's various ways that we look at it, maybe probably the same thing, but, you know, I love to hear different people's, you know, flavors of those.

[00:38:43.29] - Speaker 2
Yeah. I think the important part here with Von and Charm is, you know, as time goes forward, the deltas of positions change. Right. Pretty. Pretty straightforward. And that's assuming implied volatility stays the same.

[00:39:02.12] - Speaker 1
Right.

[00:39:04.21] - Speaker 2
And assuming the market stays the same. But more times than not, the market trades in some general range, not always. Right. And when it does, you know, implied volatility, you know, is either going to go, it's probably going to go down. In that scenario, generally speaking, we also have a downward, you know, sloping, you know, upward sloping to the back of the curve curve, historically. And so naturally, as time goes by, options already slide to a lower volatility. And so you. Not only as time passes, are you losing deltas on out of the money options, but you're also likely sliding, sliding down a curve or compressing volatility at the same time. And, and so these effects can combine. You know, it's not just about how much time passes, it's how much time passes and how much implied volatility is coming down. And often those are the same effects. So. So Vana and Charm. What it is essentially is it's if there was no skew in the market. And all positioning was neutral on both sides, right. Of calls, out of the money calls and out of the money puts, their bond and charm would probably have no effect.

[00:40:11.28] - Speaker 2
Right? Those two effects are a function of skewness and positioning. The market downside versus upside. If I'm shorted out of the money put and long and out of the money call, I am short stock against it. And if they both go out of the money, I have to buy back that stock and those deltas over time.

[00:40:31.27] - Speaker 3
One thing I just add for our listeners just because I know sometimes the Greek terms can be overwhelming for folks, but there's a lot of practitioner brute force hacks. So one of the great ways to think about it, your fauna charm, is to just literally look at, we have these scenario analysis tools. So we'll kind of shock our book and we'll say what happens if we roll it forward a week and see what happens? But you can often just go look at an option like a little shorter. If you're looking at one month option, you're curious what's going to happen to it over two weeks, you can go look at the equivalent, say in two weeks. There's some adjustments you might need to make for, for delta space and probability depending on how far out of the money it is. But there's a lot of ways, you know, one of the things I always try to encourage listeners is, you know, just play around, just get a black Scholes pricer and just play around, just see how as you change the implied volatility because these things sounds fancy, you know, gamma delta, vega charm, but at the end of the day it really just means changing inputs in your pricer and then just looking at how things are going to evolve and thinking about, oh wow, you know, what could happen in my auction price.

[00:41:37.24] - Speaker 3
You don't, you don't need to be a professional market maker to be able to at least approximate what these, what these risks are going to do to you.

[00:41:45.17] - Speaker 2
Yeah, I agree. I think the Greeks kind of confuse people, right. Like it's Greek to me, right? Like at the end of the day, like, you know, the reality is these things sound fancier and, and more complex than they are. At the end of the day, people are hedging options and they're doing it, they're managing their risk. And in order to manage risk, they have to have risk models that tell them how much should I be, how should I be hedging this? How much stock should I be short against it, how much volume should I be along against it? Etc and so understanding how those changes in time ultimately drive the rebalancing is critical.

[00:42:25.21] - Speaker 3
You look out for then on that.

[00:42:27.12] - Speaker 2
Front, like so importantly. The reason this is so valuable in my opinion is because the whole world is long assets, right? You don't buy insurance for the appreciation of your home. You buy insurance for the, you know, burning down or they're being a problem for it. So there is a risk premium and essentially infinite demand for insurance. Insurance gets priced, the downside insurance gets priced dramatically higher than any type of upside insurance. And actually upside insurance doesn't really even have risk premium. It could have negative risk premium times partially as a function of this. So that negative risk, premia and overpricing of insurance is a function of. There's just not enough people to insure. It's the biggest carry trade in the world. I'll reiterate, it's the biggest carry trade in the world. Hedging the downside of equity assets, really all assets, is enormous. $500 trillion market that needs to be hedged. It's a profitable business too, probably one of the most profitable in terms of pure dollars that are made in the world banks and to, you know, the funds, entities all over the world, structured product issue, you name it. These people are, are profiting hand over fist to ensure the market.

[00:43:51.17] - Speaker 2
You know. And by the way, that's not a Warren Buffett's favorite business. You know, value investing is, is insurance for a reason. It's a structural edge. Now the key is again risk management. These insurance companies, which is what they essentially are, right, have to hedge their own risk. You know, no insurance business. Let's go back to the insurance analogy. No insurance business is going to go out there without reinsurance. They're not going to go out there without making sure their pets are diversified. So they have hundreds of thousands of properties that are being insured and over different areas, right? They're too concentrated in an area they can, they'll go belly up, right? So the key here for a market maker or a bank or an entity who's in this game is to, you know, collect their edge and then offset their risk. That said, it is a very imbalanced, the most imbalanced trade on the planet. That's why there's edge in it and there's structural edge. So you know, the whole world is digesting this insurance premium and that insurance premium has to be hedged and that insurance premium as time goes forward evolves based on where all the contracts are written, on what products and, and so the, the Hedging out of that in real time is, is maybe the most important flow on the planet.

[00:45:11.11] - Speaker 2
It is, it's critical and again we can measure that in both time and implied volatility change. The Ivana and charm pieces are the day to day re hedging of risk. Essentially the gamma piece as I mentioned matters but it only matters if markets move in a meaningful way because the re hedging effects there are really a function of if the major risks in these institutions get, you know, gets, you know, if you hit or approach those areas and they need to re hedge it then it becomes a problem otherwise. And again most scenarios that's not the case. It's not the most critical thing. So, so understand those gamma effects. I really think of much more as, as a function of kind of tail management and risk management for the most part. I do think the value of gamma, the gamma levels is measuring more when volume is particularly well supplied and when it compresses volume. But then that effects of those are actually the Vaughn and Charm flows. Like those are the bigger flows that come out of that volume compression. And so if you have that ball compression, other than just hey, let's sell options which you could do, but if you want to play directionally based on that vault compression which happens more time than not, you really want to be focused on those, those longer chart flows, the timing and when they come and how big they are and how much they.

[00:46:28.20] - Speaker 3
Yeah, that was going to be. One of my next questions was for a, you know, a regular investor, if they decide okay, so I buy what you're selling. I think this idea of insurance and getting this structural premium, you know, selling puts effectively is, is the way to go. Obviously, you know, again as a professional there's a lot you can do. But if you were trying to dip your toe into this, how would you think about reinsuring if you will, as you know, as an investor who's just getting into it and trying to earn some of these tail premiums.

[00:46:58.14] - Speaker 2
That's part of what's happening. 0dt too. Just to go full circle, there's a lot of market makers who are find themselves buying extra net kind of gamma in the front right. To cover some of the insurance business. Now that's not a perfect hedge. And by the way, there's no real perfect hedge. That's the whole idea with risk management. If there was the, you know, the premium wouldn't exist.

[00:47:20.05] - Speaker 3
Yeah, sure.

[00:47:22.10] - Speaker 2
Exactly. So, but, but, but the, the key here is, is to, you know, for the most convex tail moment to be hedged you can do that with you know, some fixed calls which are incredibly convex. Right. You can do that with zero dte. But to be on the, the furthest part of the distribution that gives you the most convexity in the most extreme scenario. And I think that's, that's how I would think about that. There's a long standing, very, very successful trade that happens where people sell S P puts and own VIX calls against them. It is a historically a very profitable trade and there's actually ways to get into that that they get you more net tail convexity when the event happens while still making historically not every scenario more money historically right on the, on the, on the actual puts as you go through now we won't get into all that. It's a much more institutional structured trade. But there, the point here is, you know, find the place of greatest overvaluation. And yes, fixed calls are overvalued too. I'm not saying they're not right. But, but the important part is at least you're getting the most convex moment in the amount of net kind of outlay that you get for that max convexity is much less relative to what you can collect for kind of these medium type scenarios which are generally, you know, structurally quite, quite profitable for being short put and short stock.

[00:48:49.11] - Speaker 2
So yeah, the answer is first, first order, you get the most linear hedge against the delta. That's the, that's why we talk about monocharm. You get short the underlying liquid market against those positions positions. And then, and the other part would be, you know, to, to then own some reinsurance. You know, the, the risk there then is you get some big upside move and you're short the stock, right. And then so you probably need to go get some really cheap call insurance on the upside too. And so there's, it depends on the structure of the, the distribution. It just depends on where, where the, the cheapest kind of VOL. Exists. But I will say historically at least in the last 10 years, upside, you know, kind of medium to long dated calls are, are there's no risk premium, even negative risk premium. You could argue for those. So owning those is, is a cheap way to be, to be long and not take as much risk into a decline. So those are generally a good thing to have in the books and you know, with a little bit of short stock. And then again this is why people are long haul short put short stock historically.

[00:49:57.11] - Speaker 2
But there's a million different, you know, permutations we can do and it would depend on, on the structures. But but yeah, I mean, look, one of the only real structural edges in the market is, is, you know, selling a 30 ball and buying a 10. You know, that doesn't mean it's free. That doesn't mean it's without risk. But skew is overvalued. And so the key comes into managing that risk. And that's why it's the biggest trade in the world. You can argue, right. And that's why understanding the effects of it on the actual distribution, obviously it bends the distribution given how big it is and how important it is and how easy of a structured trade it is to make money on that.

[00:50:38.17] - Speaker 3
That's why we're always trying, I'm always trying to get folks who are new to options trading to think about, okay, you've sold that call. Now look at buying that higher up call, right? Especially that cheap skew. You know, when we're in a, as you said, there's this huge structural long position. People are long assets. And in an era where dividends have been getting just compressed and compressed and compressed, people realize it's not tax efficient. They'd rather, you know, repurchase shares. There's a lot of folks who want income. There's a lot of older folks who are trying to figure out how to live off of that. Those covered calls look really, really, really enticing to folks. And so I agree, I think the negative risk premium, because there's this structural demand to, to sell covered calls, you know, really makes those appealing. And so, you know, it's, it's always, it's always tough for folks. I think you bring up reinsurance, but I tell people all the time, you know, anytime one of my friends says they're getting into options trading, the first thing I say is, are you selling.

[00:51:32.02] - Speaker 2
Them or buying them?

[00:51:32.25] - Speaker 3
And I usually sell. And they say, do you ever buy the further out call or put. And they go, oh, no, you know, because I'd give up too much my premium and I'd say buy the further output and do it three times as much. I don't care what you do, just buy the further out, you know, be so that, so that in five years you don't call me and say, ryan, like, I screwed up bad, lost everything.

[00:51:53.29] - Speaker 2
Yeah. An incredibly well documented, profitable trade is just iron condors, right? Selling put spreads and selling call spreads. Why? Because you're, you're going to stay in the game. There is a structured premium to the risk premium, right? And if you, you can lose money, but as long as you contain your losses when they Happen, right. You rinse and repeat over the long run, you will make money. It's the reality. And not saying that's a, the perfect trade, there's way better things to do, right? But to your point, if it's when you're short of tail and that tail blows up, that you can't stay in the game and it's the tail that kills. Kills vault training, Right. So you, you know, we used to have a saying on the floor. People get a kick out of this. Sell a cab, drive a cab. A cab was a, you know, a nickel. You know, sell a cab, drive a cab. Right? Like you don't, you don't, you don't sell the nickels, you don't sell the dimes. You buy the little tiny stuff because guess what? When the world blows up, those don't go from a nickel to a dollar, they go to a nickel to infinity.

[00:52:51.23] - Speaker 1
Right.

[00:52:52.01] - Speaker 2
And so the payout of those, to your point, you could actually own extra of of those most convex moments, particularly on the call side, which are cheap and those tend to pay quite well as a risk management tool. But yeah, the key is risk management. Stay in the game, rinse, repeat, and as long as you are. And by the way, you don't always have to be short ball. I want to be clear, like, there's a risk premium on the put side, but there's, there are plenty of situations where buying calls are, are a no brainer. Actually, I think we're approaching one here. Right. Or in one now, particularly in this type of an environment.

[00:53:26.22] - Speaker 1
Yeah.

[00:53:27.03] - Speaker 3
And yeah, I can't emphasize that enough. Right. Like it doesn't matter. Every time I, it seems almost every time I run into anybody who's been in the option industry for more than five years, that's what comes up. Whether they call them cabs, you know, lottery tickets, teenies. They always don't be short. Those damn things don't be picking up pennies in front of a steamroller. I just had a guy at a barbecue yesterday, it turns out. Oh yeah, he trades, you know, interest rate options. The first thing he said is, we're, we will be short the belly, but we're always long wings, we're always long the tails. And if you've been in this industry for more than 10 years, you almost certainly. That's your kind of default structural strategy. Right?

[00:54:07.00] - Speaker 2
There's, there's truth to that for sure.

[00:54:10.04] - Speaker 1
Awesome.

[00:54:10.18] - Speaker 3
I mean, I guess we're running out of time here and. I don't know, Fabio, there were some questions you wanted to get in. But, you know, I'm curious how you think for some of these newer assets, particular things like crypto, how, you know, how options, you know, you know, implied volatility surfaces and everything, and liquidity is evolving for those and, and where you see some opportunities and how they fit into this picture of kind of convexity entails.

[00:54:34.14] - Speaker 2
Yeah, I'll, I'll speak less generally just because we have short time. I'll talk more specifically. Right. To, to, you know, the environment we're in and what that likely means. Obviously, how you structure trades is very dependent on the environment you're in. But important to note that, you know, let's start with the macro. We're at, you know, record valuations by lots of metrics equivalent to when I came into the business. I came in 98, 2000 was similar valuations. If you asked me in 2001, 2002, you know, will we ever see that kind of a bubble in US Market markets again? I would say, I mean, after The Nasdaq dropped 92% and 95% of tech businesses went belly up, I would have said no, I don't think we make that mistake again in my lifetime. Well, here we are, right? And I know we're not here to talk macro, and I'm not. And the reason I mentioned that, though, is not because the valuations, because valuations are not a good metric for like, as we talked about the beginning, about predicting whether the market's going up or not in the next month, the next year, the next quarter, you know, 10 years.

[00:55:35.23] - Speaker 2
Okay. It's a relatively good predictive tool on a decade basis. But, but what that can tell you is certain things about the distribution and for all assets, not just crypto. We can get to crypto very specifically as well. But the reason bubbles happen and the reason to your point we don't get a lot of 8% returns, we get big returns or we get big declines, is there are structural effects that, that come into the market, that buys the market. These are the passive flows that, you know, Mike Green and others talk about. These are the. That the Vaughn and charm flows that I talk about from the carry trade. That is put versus call. You know, these are buybacks. These are the government in the Federal Reserve incentivized to continue to provide liquidity and push assets higher. Okay. There are plenty of other things I can get to, but these things operate day to day, regardless of macro or valuation or anything else. So that's 1, 2. As things get to a decade long, predictive like, okay, this is not a good time to be long assets historically.

[00:56:34.27] - Speaker 3
Right.

[00:56:35.07] - Speaker 2
You know, you know, based on if you just look at Shiller PE like, you know, the long. The next decade long returns is on average 0 to 1%. Right. So, and I'm not the only one.

[00:56:45.19] - Speaker 3
Talking about this like in the same camp.

[00:56:47.23] - Speaker 2
Goldman, I don't know how you couldn't be in the same camp.

[00:56:50.08] - Speaker 3
Right.

[00:56:50.15] - Speaker 2
Like, it's just so obvious. So. But that's the problem, right? Because at the end of these things, and this was true in 98 before we saw a 50 rally markets and then a 92% decline. The problem is institutions know things are. This isn't, you know, structurally a good time to be long. So they get short. Institutional investment was at the 0th percentile coming into the summer 0 and is now at the 15th after they've massively deleveraged and had to pretty much because of the squeeze cases happening as that happens. Right. What is, what this is a. There's a voting machine, you know, more buyers than sellers, drives market up. Well, if you're, you have net short positioning in the marketplace, what do you think's going to happen? Those, especially if you're in a period where those structural flows are very positive and they keep pushing. Right. It doesn't matter where valuations are. There's more buyers and sellers. And this is why squeezes happen, is why big bubbles happen and why also the fastest moves are at the end of the bubble. You know, the biggest, fastest, most convex moves are at the end in 98, 99, 2000, we saw upside calls for almost two and a half years explode higher.

[00:58:00.10] - Speaker 2
And I want to be clear, it was the easiest trade on the planet. You know, balls were too low on the calls. You would just buy them every day and sell stock. And if the market went up, it would go up big and you'd make a ton of money and the market went down. It was. Those balls would go up again. And so what happened is implied volatility just expanded dramatically, went up into the last year of the rally for the full year, the ball just kept going up and up and up and up under the rally and it became a megaphone. What happened is that drove more volatility in general. So we got massive pullbacks and then massive rallies. This is what a bubble looks like. Looks like we are entering the bubble phase. Right. So can we. Or we have entered, I guess I should say, you know, and I want to be clear. Does that mean the market's going up or down? Well, likely going up, but it will end spectacularly when it does and it will go down big. Okay, that's the reality. But people are gonna say, well, you're playing both sides, Jim.

[00:58:58.26] - Speaker 2
Choose a side. I don't have to. I don't have to. You can go buy calls, sell stock delta neutral, not pick up or down and make money in both directions at this point. Right? That's what I'm telling you. That right call is right side of that distribution is way too cheap. So you asked specifically about crypto and market structure. And by the way, there's call skew in crypto. So it's less cheap there, right. We're talking more equity indexes, etc, but there's a reason it's, you know, it's the right skewed in crypto right right now. And like let's go into now let's get into crypto. So that's in general, right. So markets are, and liquidity are going to drive a, a reflexive loop likely on the right tail when this, you know, if, if, if and when this thing gets going, right, Which I think is, is likely at this point. Importantly, there's no bigger driver of liquidity in the world. Bigger than the Federal Reserve, bigger than the treasury, bigger than the government. I mean bigger, not the government, bigger than the economy itself. The biggest driver is the market. The market itself creates more liquidity than anything else on the planet.

[01:00:05.25] - Speaker 2
Now the Federal Reserve and Treasury can, can manipulate through, through saying hey, we're going to do X or Y what the market does on the bonds, bond side and equity side, which can then drive liquidity. But, but the biggest driver, liquidity is the market itself. And so it's a loop. And so that's the other thing I want to be clear. We had a, more, more businesses created, more income created. We were in a budget surplus in 98.99 because the market was going up. And what happened when the market went down? 95 businesses went on, we went into recession. And people always think it's secondary, that the markets are secondary. They reflect, they reflect the economic values. I'm here to tell you it's the other way around. I mean it's a, it's a, it's a, a loop. But the bigger driver is actually the market itself and the liquidity itself. And so because it's a loop, if markets go up, you get more collateral, more leverage, more investment, more economic outcomes, more SPACs, more, all the things, right? And now great irony is people also get more short into that. That also drives more short squeezes at the end of the, at the end of the.

[01:01:11.28] - Speaker 2
Okay. Anyway, that's the big picture to drive into crypto and precious metals, which I'll put in the same bucket right now. Even they're different things. I've said this on other venues, but I really want to hammer this point home. Very few people understand that it's probably the most important thing in finance, period. $500 trillion of assets on one side which are equities, bonds, private equity, private credit, venture capital, real estate. I would put in that as well, long assets. Right. And then you have as of three years ago, only $4 trillion of what I'd call alternatives. Okay. And I'm not talking about private equity, private credit, because those aren't alternatives.

[01:01:48.16] - Speaker 1
Right.

[01:01:49.22] - Speaker 2
What are those alternatives? This is again as of three years ago and then we'll update it to now. $4 trillion was crypto, hedge funds, structured products and precious metals. I say 4 trillion because even the gold was 7 trillion at that point. Three years ago only 1 trillion was outside of sovereign vaults. Okay. That number is now almost $15 trillion in three years at a tripling of of those. People don't understand why. It's because you have 500 trillion on this side with no way out.

[01:02:25.05] - Speaker 3
Yeah, you got to buy something. Right.

[01:02:26.23] - Speaker 2
So I don't care. That's gone from 4 to 15. Right. This is with the market going up. Right. And the risk themselves not presenting themselves. These are where the early adopters who are managing risk and trying to get more non correlation. But importantly those investments, some of them like the structured product hedge fund in particular, have dynamic structural effects on the underlying assets themselves. And that's part of what we're talking about with the bond and charm everything else. So the structured products and how those are tied in this summer and the hedge fund squeeze and the shorts there and the dry, all those are also very important to this distribution, this outcome. So as it relates to crypto and precious metal, I mean I don't know how you can look at that supply and demand imbalance again voting who's are there more buyers or sellers and not be long convexity there. I don't care what the price is within reason. So. So that's what's driving the tripling in precious metal and gold in three years. That's what's driving the driver tripling and precious Bitcoin and crypto the last three years. And for the early adopters, the you know, thousand X.

[01:03:34.14] - Speaker 2
Right. For the last, you know, decade. But importantly, you know, I'll leave you with that like that early, early innings. Early innings still for, for all of those, those assets and early innings for the growth of hedge fund structure products as well and the effects that they have. So making what we're talking about all the more relevant. Important.

[01:03:59.01] - Speaker 1
Yeah. And I think, Jamal, I really want to thank you for this because we have a lot of people connected. I think the content was awesome. Thank you for. We've been working on this for last few months, so really appreciate you taking the time and thank you, Ryan, also for being part of it. And I think, guys, if you want to send us over any follow up questions or any comments, just, just reach out via email@info mentor q.com but I think I want to really. Again, thank you again for being here. I don't know if you have any final, final things that we want to say before we close. We are at the hour, so I want to be conscious of your time as well.

[01:04:37.09] - Speaker 2
I'll say one, one last thing. People get intimidated by this stuff. They say, this is above my head or I don't too complicated. The reality is, A, it's still early innings, so you're not too late to get started. B, it, it's one of those things is like another language, right? You think, I'll never learn that language. And if you just chip away, before you know it, you know the words and all of a sudden things start making sense and it is, it's exponential. So I encourage people to hop in and, and just start learning. There's, there's a lot to unpack and it's. At some point it becomes your view of the world kind of changes because again, you start moving from two dimensions to three. Thinking about this as it relates not just to markets, but how, how everything in it relates. And I, I strongly recommend people jump in and, you know, start learning. Yeah, thanks.

[01:05:28.28] - Speaker 3
I always learned something too. So, you know, it's never too late to start learning. And you should never stop learning. You'll always learn something in these markets. That's why they're so addictive. Right? Especially when you start doing 3D and 4D, like Jen's saying here. Right. You never stop being humbled and then taking something away from it. A new way to make money.

[01:05:49.21] - Speaker 2
Absolutely. Wonderful meeting you, Ryan. Wonderful meeting you, Fabio.

[01:05:52.17] - Speaker 1
Thank you. Thank you so much, guys. Thank you for watching and see you soon.

[01:05:56.08] - Speaker 3
Thanks. All.