Lots More on How TikTok Options Traders Got Quiet

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Odd Lots 23 min 6 speakers 7 chapters transcribed 29 days ago
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What is the overall market backdrop that triggered the recent volatility surge?

Joe Weisenthal 0:01
Our hometown is not a test to
Unknown 0:03
ninety miles northeast of Nashville, a battle for the future of America plays out in one small town. Developers with right wing ties have purchased hundreds of acres of land. We need cities on a shining hill. This is our town. A podcast about what happens when a small town becomes the site of a social experiment and fights back. I guess you didn't move in on a bunch of dumb hillbillies now, did ya? Listen to our town on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
Scarlett Fu 0:37
Bloomberg Audio Studios Podcasts Radio News.
Joe Weisenthal 0:42
Tracy, we have Ben in a leather jacket.
Tracy Alloway 0:45
Yeah. Well, it's not just a leather jacket. It's a black leather blazer with sort of braided edges. It's got a little bit of a wait, is this an insult or a compliment? I don't know. A little bit of a a little bit of a renfair feel to it. Okay, good. All right. I I
Joe Weisenthal 1:03
wasn't quite sure. This is like one of the that would be a very polarizing comment to some people. Not to me. I do not have Renfair vibes, but I look I respect it. These are Renfair times. These are Renfair times. So I get it.
Ben Eifert 1:16
I get it. They absolutely are. There's pictures of me on Twitter in s you know, nightingale armor with the sword. So I think this is fair game. I did a deadlift. I'm
Tracy Alloway 1:26
both the most popular trader and most successful trader at Citadel.
Joe Weisenthal 1:31
Feta's going viral.
Tracy Alloway 1:32
Uh barges.
Joe Weisenthal 1:33
This is an after school special, except
Tracy Alloway 1:35
I've decided I'm gonna base my entire personality going forward on campaigning for a strategic pork reserve in the US. Black gold These are the the important questions. Is it robots taking over the world? the world. No, I No,
Joe Weisenthal 1:45
I think that like in a couple years the AI will do a really good job of making the Outlaws podcast. One day that person will have the mandate of heaven.
Tracy Alloway 1:54
How do I get more popular and successful?
Joe Weisenthal 1:57
We do have the perfect gift.
Tracy Alloway 2:00
You're listening to Lots More, where we catch up with friends about what's going on right now.
Joe Weisenthal 2:04
Because even when the odd lots is over, there's always lots more.
Tracy Alloway 2:08
And we really do have the perfect guest.
Joe Weisenthal 2:14
We are of course with Ben Eifert, QVR advisors. Ben, who's been getting steamrolled the most by this market? And I have some thoughts on this market, but I want to hear yours.
Ben Eifert 2:24
No, it's a it's a super fun market. I mean, really first you had the deep seek thing here. Yeah. Right. And that was really interesting because equity markets went down, but the fun was all under the surface, right? It was what what did we sell off? Eight or ten percent in index. It wasn't a huge deal, but there were like eight standard deviation moves in market neutral factor type relationships and crowded equity long short.

How does Benn Eifert explain why TikTok “vol‑fluencers” have gone silent?

Ben Eifert 2:44
And so you saw, you know, the type of people that had the really popular equity position. Positions, you la NVIDIA and you know, Tesla and all these kind of stocks just get really, really murdered. You heard of a lot of pain at the big multistrats. Again, you have to put that in context because they're pretty well risk managed. The losses weren't that large in in percent terms. But you had again just very, very, very large moves. And then I think the interesting thing about that was that led to a lot of de-risking in hedge funds. So you had pretty high gross and net leverage coming into Yeah. And then it came off quite a lot, you know, a lot of de-risking. And then when you know that when Liberation Day hit, I think positioning wasn't nearly as you know as offsides as it could have been otherwise.
Ben Eifert 3:26
And so you did see obviously big drawdowns in the equity market, big rallies back, a lot of volatility. But I think you know the losses that you saw among hedge funds probably weren't as bad as they would have been otherwise. Another interesting thing to note, and we, you know, we talked about the That's a lot. There really isn't That much of the kind of super crowded short volatility, short tail risk, tail risk selling kind of stuff out there that there was like in 2019, 2020 for the pandemic. So you didn't see that those kind of fireworks, right? There weren't like hedge funds getting liquidated and people getting carried out in body bags and big auctions of all their positions, making markets go crazy.

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