Lots More With Charlie McElligott on the Sharp, Strange Selloff

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Odd Lots 28 min 8 speakers 4 chapters transcribed 1 month ago
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James Reed 0:00
Building a successful business is hard. Building one that lasts is even harder. The jobs market is tough. Industries are evolving. AI is advancing. How do you adapt and stay ahead? I'm James Reed, Chairman and CEO of Reed, and host of the All About Business Podcast. Every Monday, I sit down with founders, CEOs, and entrepreneurs who've built extraordinary businesses, the people who get things done. I ask them about the decisions that mattered, the risks they took, the mistakes they made, and what they'd tell you to do differently. Whether you're building a business, leading a team, or simply fascinated. By how successful people think. You'll hear honest conversations about the good, the bad, and the ugly of building something that lasts.
James Reed 0:45
If you want top insights and actionable advice to apply to your career or business venture, listen to James Reed, All About Business. Listen on Apple, Spotify, YouTube, or wherever you get your podcasts. See you next time.
Unknown 1:04
Bloomberg Audio Studios Podcasts, Radio, News. It's good.
Charlie McElligott 1:11
It's good. You know, markets are fun and Well, and as we said, spring's here.
Tracy Alloway 1:15
Yeah, markets finally got interesting.
Charlie McElligott 1:18
Oh man. I I mean I have so many thoughts. Oh good. All right. If you can't tell from my normal stream of consciousness operation.
Tracy Alloway 1:25
You know how I know it was bad, Joe?
Charlie McElligott 1:28
Go on.
Tracy Alloway 1:29
It was one of those weeks where we talked about negative g gamma quite a lot. What's interesting? Interestingly, we didn't talk that much about standard deviations, which is kind of funny. Normally those two kind of go hand in hand, but not last week. It was weird.
Joe Weisenthal 1:44
What's gamma again? I feel so dumb because I know we've talked about gamma and it's just one of those things. It's like, what is it again?
Tracy Alloway 1:50
Should we get you a refresher?
Joe Weisenthal 1:51
Yeah, I need one of those guide to the Greeks books or something. Or like a little like laminated card that I can like
Tracy Alloway 1:58
someone should do a coffee table book.
Joe Weisenthal 1:59
Yeah.
Tracy Alloway 2:00
Yeah.
Joe Weisenthal 2:00
Guide to the Greeks. And I like Greek stuff these days, you know, 'cause I'm into like ancient history and everything like that. I know what alpha is, I know what beta is. After that I started getting a little dicey. I did a deadlift.
Tracy Alloway 2:13
I'm both the most popular trader and most successful trader at Citadel.
Joe Weisenthal 2:18
Feta's going viral.
Tracy Alloway 2:19
Uh barges.
Joe Weisenthal 2:20
This is an after school special, except
Tracy Alloway 2:22
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? No, I No,
Joe Weisenthal 2:32
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 2:41
How do I get more popular and successful?
Joe Weisenthal 2:44
We do have the perfect gift.
Tracy Alloway 2:47
You're listening to Lots More, where we catch up with friends about what's going on right now.
Joe Weisenthal 2:52
Because even when the odd lots is over, there's always lots more.
Tracy Alloway 2:55
And we really do have the perfect guest. Oh, the definition. I feel like I've done this before. Um, but gamma, gamma is the option sensitivity to the change in delta, and delta is the option sensitivity to the underlying price. So gamma is like the change of the change. It's a function of the underlying price, but it's second order. And I guess negative gamma. That's when Delta is in the opposite direction to the stock price movement. So Delta goes down if the underlying asset price is going up. And then it becomes less negative if the underlying asset price is falling.

Why did the S&P 500 sell off sharply without a big spike in volatility?

Tracy Alloway 3:42
And we usually see people talk about this during market sell-offs because all the options traders have to basically sell or buy stuff to hedge all that changing. Exposure. And the suspicion is always that that hedging activity are pushing the market in one way or the other. I think that's it. Okay, I did it. Um Charlie, you should write a book, a coffee table book on the Greek letters.
Charlie McElligott 4:07
I'm I'm liking this like Spartans versus Romans history vibe where we're going. Yeah.
Joe Weisenthal 4:13
That's very you. I feel that's very comfortable. Yeah, if you're comfortable. It res it resonates. It resonates. Yeah, I know.
Charlie McElligott 4:17
It resonates.

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