Insights
Daily market commentary from Imran Lakha. Skew, vol surfaces, hedging, and what's actually moving the tape.
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The better-looking trade is sometimes the worse trade
Remember this... the payoff diagram is a photograph of the last day. It shows you what happens if you hold to expiry, if price lands in the right spot, if everything plays out along one specific path.
Vol doubled. I traded half as much
When vol doubles, I trade half as much. Volatile markets feel like opportunity everywhere. 2% daily ranges. Headlines every hour. Setups on every chart.
VIX is lying to you
SPX makes a new local low. VIX ticks higher. Looks bearish, right? Not so fast.
Three buckets, one question
Every options trade I take falls into one of three buckets. Delta. Theta. Vega.
Your hedge is bleeding you dry
Buying puts every month to hedge your portfolio is a guaranteed way to bleed money. Most puts expire worthless
The signal hiding inside implied vol
Stock hits a new high. You think it's bullish. But what's implied vol doing?
Stop buying calls on the bounce
You see a selloff. You think it's overdone. So you buy calls. Then theta eats you alive because vol is through the roof.
Stop overpaying for protection
Your hedge is expiring. Vol just spiked. The obvious move is to roll into another put. Don't.
Why I'm using flies instead of calls right now
Most traders see SPX stretched 1-2% below VWAP and reach for calls. In 30-vol, that's a terrible trade
61% hedged. And I'm taking it lower.
"Hedge your entire portfolio so you're fully protected." Sounds responsible. Until you do the math.
Crashes don't start from the top
"Buy protection when markets are euphoric and everyone's greedy." Every beginner trading book says that.
One bad day is wrecking your vol reads
One spike to 120% a year ago is still messing with your reads today.
Not all put buying means the same thing
"Record put demand, must be close to a bottom." I keep seeing this take. And historically, heavy put buying does line up with bottoms.
Right view. Wrong structure.
"I had the right view... but still lost money." Does this resonate with you?
Skew is storing energy
Everyone wants to sell premium right now. I get it — vol is elevated, theta looks fat.
$50 billion moves a $50 trillion market
The US stock market is worth $50 trillion. The amount that actually moves it on any given day? About $50 billion. One one-thousandth.
Your model doesn't watch the news
I spent 20 years on institutional desks. The most sophisticated risk decision I ever witnessed was a senior trader hitting pause.
The view wasn't the trade
"I had the right view but still lost money." I hear this time and time again. And the answer is always the same. The view wasn't the trade.
15% in a month. That's not a win.
Made 15% in a month on a position I expected to take six months. Most people would celebrate. I started recalibrating.
The rally no one trusts
NVDA is rallying. The options market disagrees. Skew is telling you something...