Market Rebellion and Options Insights with Jon Najarian

Former Chicago Bears player turned trading guru Jon Najarian joins us to share his unique journey from the chaos of open outcry trading floors to the precision of modern digital trading. Feel the rush of the pits as Jon recounts the electrifying highs and lows, and learn why he believes female traders often have the upper hand, thanks to their cautious and disciplined risk management strategies. This episode is packed with eye-opening insights into the realities of trading, both past and present.

We tackle the turbulent world of market disruptions and volatility, analyzing historic events like the 2010 "fat finger" trade and the impact of social media influencers like Roaring Kitty. Jon dissects the current challenges in the cannabis sector, despite legalization. Discover why cannabis stocks have struggled and why some investors still see potential in this risky market. This isn't just about trading; it's about understanding the forces that shape financial markets and the importance of staying informed.

Dive into advanced options trading strategies and market analysis with us. Jon shares notable trades in companies like Lyft, Vornado Realty Trust, and QuantumScape, emphasizing the value of spotting significant options activities. We explore why disciplined trading and diversification are crucial, especially when volatility is high. Plus, get an update on Market Rebellion's expansion and new ventures. Whether you're a seasoned trader or just getting started, this episode is packed with practical advice and expert insights you won't want to miss.

The content in this program is for informational purposes only. You should not construe any information or other material as investment, financial, tax, or other advice. The views expressed by the participants are solely their own. A participant may have taken or recommended any investment position discussed, but may close such position or alter its recommendation at any time without notice. Nothing contained in this program constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in any jurisdiction. Please consult your own investment or financial advisor for advice related to all investment decisions.

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Transcript

Speaker 1: 0:08

my name is michael. Guy at publisher of the lead lag report. Join me for the rough hour is mr john nigerian. Uh, john, I I often find that a lot of people who see guys like you in the financial media they feel like they know you, but I don't know how much they actually know about your actual background. Right? So let's let's reset the table for those that are not familiar. Who is John Deere? Who are you? What have you done throughout your career?

Speaker 2: 0:29

All right and I won't belabor the earlier parts of my career, but basically I came to Chicago, happy to be here, was lucky enough to play football for the Chicago Bears, which was always a dream of mine to play pro football but also to play for the Bears, because Dick Butkus was one of my favorite players when I was growing up, and he, of course, and Walter Payton and Gail Sayers were people that I grew up watching, even though the first 12 years of my life were in San Francisco, and I grew up walking to Kezar Stadium those of you who remember that. And then, as we moved to Minnesota, my dad became chief of surgery. I adopted other teams, like the Minnesota Vikings and like the Chicago Bears. But so I came out of college, played football for the Bears, got cut after four games, was lucky enough to be in a city that was proudly the center of open outcry, trading and open outcry. What does that mean? Instead of pointing and clicking with one of these folks, we literally would stand in the pits and scream and shout at each other, probably like you do at presidential debates. I sat there in the pits for 1981 until 2004. So for those 23, almost 24 years, I was one of those men in the pits.

Speaker 2: 2:06

They're men and women, of course. Only about 5% of the floor was women, though, probably because men can be disgusting. They think it's good luck to wear the same clothes that they wore yesterday if they made money. You know a lot of superstitions, a lot of bad eating choices at lunch and things like that made the floor pretty rank but nonetheless, obviously a woman can be as good a trader as a man. But floor trading is a physical sport. It is bumping, at times hitting and buy, sold, you know, as fast as you can. Whoever's first gets the trade gets as much of the trade as they want. Sometimes they'll share it with their friends, other times not. And it is sort of like in trading places when Eddie Murphy and Dan Aykroyd go down into the pits of the Comex, I think it was, and they go down onto the floor and they're trading and Dan tells him you know the World Series, super Bowl, they have nothing on this. Well, of course they do. The World Series, the Super Bowl, nba, nhl playoffs, those are athletes. There are some athletes and some former pro athletes on the trading floor, but for the most part it's adrenaline junkies like me that figured out. If I'm fast and I can do some math quickly in my head, I can make a lot of money trading head. I can make a lot of money trading and it was the most fun until about 2004 when I left, because very, very quickly this, the mouse took over and now we all trade that way.

Speaker 2: 3:57

Even traders on the floor are pointing and clicking a lot more than they're doing open outcry. But that's what open outcry is. A broker says I want to buy these, what's your offer? And people compete for selling at the lowest offer or not the lowest offer. I'm sorry. They compete for selling at the highest offer or buying at the lowest offer, and we're all competing in a pit with, in some cases, dozens of people, in other cases hundreds of people. So anyway, long-winded explanation, but that's what I did for about 23, 24 years. Then I moved upstairs. Since then I trade just like you, just like Michael. I trade pointing and clicking. I try to use the same indicators I used when I was on the floor, but of course upstairs it's silent. I mean, there's not a sound and for the most part, traders need that sound to understand fear and greed in the markets. That certainly helps and we haven't had that since open outcry. Pretty much died.

Speaker 1: 5:10

So I find it interesting that you mentioned women traders, because there's a lot of interesting studies that show that female hedge fund managers tend to actually have better longer-term performance than their male counterparts. I'm not too proud, right, and the thinking there is that they don't blow up, they don't take just in general, men because of testosterone, they take on more risk, women obviously not as much, and, from a risk management perspective, women are more careful than men when it comes to trading and investing. So I want to transition that to a discussion around risk management, because where everybody is using a mouse and very quickly trading with the click of a button, risk happens fast when it happens. So obviously there's a lot of creative ways that you can manage risk from an options perspective, but I want you to lay a framework for how to think about risk, and the real risk is the risk of ruin, not just a regular drawdown. So lay out sort of how you think about risk, especially when you're in a cycle like this where there's so many divergences. Sure.

Speaker 2: 6:11

Well, it's one of the reasons that I absolutely love options is their ability to mitigate risk. Now you could also enhance risk. You could take it to the next level. You could also enhance risk. You could take it to the next level. But that's not really my goal. Most people like Michael, or like any of you that are trying to make a living or build up your retirement account, whatever it might be, using options. They are a great tool for that, because options allow you, allow me, to define my risk when I enter the trade. If I, for instance, jump in and buy Nvidia today and or Tesla even better example because Tesla early in the day today was up strong, it was up, you know, very strong in the morning. You look at the range it opened at 263 and changed $263. It traded up as high as $271. Right now it is $242. So that is a big open jump to 271, sell off hard If you buy the stock and if you set a stop loss, which I'm sure most of you know becomes a market order if it is triggered.

Speaker 2: 7:34

Now there are various forms of stop losses. I do understand that. But if you say I'm going to buy the stock here on the opening at 263, and I am going to set a stop loss at 262 or 260. If we trade there, one share trades at that level boom. Your stop order will liquidate all the shares you bought at 263 at that level. Whatever you picked as the stop order 262, 261, 260, whatever you picked as the stop order 262, 261, 260, whatever it might be that's somewhat open-ended risk to me.

Speaker 2: 8:16

And yet, with options, I could buy an option that controls that stock for a week, for instance, until next Friday, the regular expiration. What would that be then? Let's see. It's the 12th Friday, so the 19th of July. I could be in that trade until the 19th of July. I've defined my risk on entry because all I could possibly lose on that trade is the initial amount that I paid, which is much smaller than the $263 that Tesla's trading for. Why is that? Because it's only for a week. It's a limited amount of time.

Speaker 2: 8:49

Options are a wasting asset, so all of you who have traded them know that time decay is your enemy when you're a buyer of an option. Conversely, if you're a seller of an option, you're rooting for that time decay. So those of us that own the stock and sell upside calls against it, as I have done in Tesla, in Apple, in NVIDIA, in Supermicro, in Micron Tech, in Arm Holdings, any of these stocks. I am trying to enhance my yield by selling an option, usually with one or two weeks into the future. Why? Because that's very fast time decay.

Speaker 2: 9:32

Somebody has just moments before that option is nothing and, on the other hand, if I'm buying an option, I tend to want a little more time to be right. So these are mistakes that rookies, newbies, make all the time. They see something that looks cheap or they look at a daily option, something that they buy in the morning and it's going to be something or nothing by the afternoon. Most cases, people lose whatever they paid for that option by the end of the day. Now, not everybody, however, because some of us again, michael John, my brother, pete, people that know what they're doing will trade daily options. But it is not the bulk of what I do. It enhances what I do, but it is by far not my main focus.

Speaker 1: 10:23

I want to expand on that point about selling options for that yield. I do a lot of writing on seeking alpha right. I've seen your stuff. I'm always blown away at the number of products that have come out that are ETFs that have an option selling call strategy to enhance yield and some of these home families have just like insane yields right, just doing that all day long and it's profitable, but it's profitable until it isn't right. Going back to that point about risk, is there any evidence to suggest that we've gotten to a point in the cycle where that options writing is so prevalent that it could cause a dislocation?

Speaker 2: 11:04

Certainly it could. The dislocation would primarily be for a very, very undercapitalized clearing firm, perhaps somebody that was on the edge. It wouldn't be for a Goldman Sachs. It wouldn't be for a Morgan Stanley or Schwab or Fidelity or our brokerage Sogo Trade. It wouldn't be for any of those because they have enough capital, they have great risk control measures in place and these days, more and more of them are doing as we are doing employing AI, artificial intelligence, to keep an eye on the risk that people are taking, because if you're a brokerage, you are taking on the risk of everybody that clears through that brokerage, meaning that you know there are people that are trading at, for instance, schwab and they feel that their money is safe at Schwab I would feel my money was safe at Schwab and there are people that clear at a no-name brokerage somewhere where they don't have nearly the full faith and credit of, you know, the trillions of dollars of deposits that Schwab might have. So in normal times it doesn't seem that that risk of dislocation of one of those prime brokers or brokerages is that big a risk. But could they become the tail that wags the dog on a given day, for instance, a day like in some cases today, michael, where you have again the S&P 500 opened higher, the NASDAQ opened higher and now they're both negative and fairly robustly negative. Not crazy, not like 1987 negative, but the S&P is down 46 points. It was positive earlier in the day, so we're talking about at least a 50 some odd point swing to the downside. The NASDAQ was positive. It's now down 325 points. Again, that's only 1.7%, but do I think we could see somebody take on too much risk and cause that dislocation that Michael talked about there? Folks, yes, we could see that, but it's not usually the sort of thing that, for instance, I'll throw one out, michael, back in 2010,.

Speaker 2: 13:39

Many of us remember that fat finger trade where all of a sudden, the markets fell multiple percents like that, why Somebody accidentally entered an order that was far larger than they intended. I don't believe it was done on purpose, but that caused that disruption that you're talking about. Could that happen in an option? Sure, somebody could enter far too many options to buy or to sell and drive the stock up or down. I mean, you don't need to look a lot further than Chewy just over a week ago, when Roaring Kitty put out that picture of a puppy. And was that option driven? No, it was probably stock driven, but nonetheless the stock popped by over 24% as soon as he put out that picture of a puppy, or an animated picture of a puppy, and people began thinking, oh, is he talking about Dogecoin? Is he talking about Shiba Inu? Is he talking about Chewy? Well, it turned out it was Chewy that he was focused on, but it went up and down like that and they had to halt it because of that.

Speaker 2: 14:49

So again, michael's point is well taken. You could see dislocations from information that gets disseminated, right or wrongly, and options could be part of that, because, again, you get leverage with options. It's not just that you're committing that 1,000 shares of NVIDIA at $132,000. So, $132,000 position. Instead, what if you're trading 10,000 call options? That represents a million shares, because every option's for 100 shares that would represent a million shares. You can certainly swing some stocks with million share positions and people routinely trade 10,000 contracts, mainly institutions in the likes of NVIDIA, supermicro, tesla and so forth.

Speaker 1: 15:44

So you mentioned Chewy, which of course makes me think of food chewing. I'm on my second day of my seven-day fast. I'm trying hard to get to seven days, Seven days.

Speaker 2: 15:54

I'm trying hard man.

Speaker 1: 15:55

I'm trying hard, but I always try to find a transition, right? So it's like you're mentioning Chewy and a question from YouTube, from Rob, was what do you think about the marijuana sector? And I'm relating that to Chewy, because if you smoke, you're going to be hungry, right? Yeah, all right. So let's go through that. As far as any thoughts on the marijuana, sector Boy.

Speaker 2: 16:18

I have a cabin or a house in Michigan and Michigan has just approved more overlays of a map, meaning that they've at least six new dispensaries brand new, built from the ground up. You would think that, given that cannabis is legal in so many states, for medical as well as recreational, that these stocks would have been great investments Most of them if you weren't in at the seed round. You are not making money. There's a whole host of reasons you know. The prohibition against moving class A or whatever drugs off of between states and things like that across state lines certainly plays into it.

Speaker 2: 17:32

But I haven't seen a lot of money being made in the cannabis sector for quite a long time. That doesn't mean you can't make money in there and in fact if you own some cannabis stocks and you're selling calls, you're probably a very happy camper because you're enhancing yield dramatically with that. But yeah, I have been involved in the sector. I even helped with innovation shares, come up with an ETF for that for cannabis stocks. But quite frankly, I don't think anybody's unless they were in on seed round stuff, michael. I don't think anybody's unless they were in on seed round stuff, michael I don't think anybody's making money in the cannabis space, buying these stocks.

Speaker 1: 18:16

I'm a fan and friend of Todd Harrison and I've done a number oh, I love Todd. I've done on marijuana and I feel the struggle because it's been very hard. You can believe in a sector, an industry, but, man, that's been a brutal space to invest in.

Speaker 2: 18:33

Yeah, it certainly has, and Todd's as bright a guy as anybody understanding both. That issue I addressed about distribution as well as some of the other things. But I mean you know from 2020 till today that the one that they put up on our screen just a minute ago Michael Advisor, shares, pure Cannabis, msos, that thing was, you know, a $50 stock in 2020. Now it's seven bucks. I mean, these are incredible disruptions of wealth, not creators of wealth. Again, unless you got in at the early stage, I'm sure people continue to take shots and saying, okay, now that it's down here at seven, it's got to go up from here. Right, you'll look at the PEs of these stocks and they're still kind of high, at least in my opinion.

Speaker 1: 19:41

The real play there would be NVIDIA acquires the entire sector, because the reality is, with generating AI, there's going to be a lot of time for people to smoke. I think that's sort of the way to think about it.

Speaker 2: 19:51

Well and, by the way, I'm not saying you stumbled upon it at all, but you bring up a great point. I was just talking with my friend Scaramucci and we were both talking about AI and I said can you imagine how many jobs are going to be lost because of AI? And we both just shook our heads because it's going to be incredible. I know just from the robotics side Michael robotics meaning that so I helped raise over $100 million for a company called Miso Robotics. And if you look up Miso Robotics folks you'll see and I'm not trying to pump up, I don't believe it's publicly traded, so I have no reason to pump it up, other than I worked with them. I like them, I know they're smart people and they build a burger flipping machine. Turns out it also flips steaks and about 18% of steaks get sent back not destroyed, but get sent back.

Speaker 2: 20:55

Oh, you know this isn't cooked to my liking. I needed a little more, towards medium well or whatever. But if it's cooked too far, they got to throw it out because they can't use it unless they turn it into a steak salad for somebody the next day or something. So that's an expensive thing to throw those things out. And then you couple that with the idea that at a fast food franchise that's paying $20 plus an hour for people to work there, for instance, that's the law in California that is pushing more and more of these robotics for burger flipping machines, for fry machines we call it fry guy for sippy. You know the drink machine, and they know exactly how long we'll wait at a drive-through, michael, before we'll say nope, not going to go here. I'm either going to go inside or find another McDonald's, hardee's, whatever it might be, wendy's, if they can get.

Speaker 2: 21:57

With these robotics, the burger is done, fries are done, the drink is ready, all at the same time because it's all being done by the robots and they're all just passing it down the line. That's manna from heaven for these guys. Versus the 22 bucks an hour they have to pay a person to be there, and yet AI is going to disrupt far more than that. So imagine how many jobs are going to be lost. I think what we hit during the lowest employment rate that we've recorded on record. We won't come close to that again. We will be going the opposite direction, no matter who's president. It's not a political comment, it's just more jobs are going to be lost due to AI than created because of AI.

Speaker 1: 23:26

Another question, this one from X from GoToWork. Let's hear some unusual options, except he plays for today. To me, everything looks unusual today. I mean, we referenced it a little bit earlier, but yeah, you mentioned the entry turnaround on the S&P and the NASDAQ small caps up three plus percent. That smells and feels a little bit like some hedge funds that were doing spread trades getting blowed out Right. A little bit like August of 2008, 2007, rather. But yeah, let's go through some unusual options please here.

Speaker 2: 23:56

OK, well, I'll throw out a couple. So, for instance, smh that's S like Sierra, m, like Mary H, like Harry. Smh is the semiconductor holders ETF. We have bearish activity in that one. A lot of September puts being bought under where the market is trading. The market was $273 a share for the SMH. They were buying the September 260 puts. Let's see what's.

Speaker 2: 24:25

Another one here. I just did my three at three just a little bit ago, where I look at stocks that are. So let me give you those, let's do there we go. Lyft, l-y-f-t this one. The stock was $13.79. They were buying upside calls at the $14.50 strike that expire next Friday. So that's Lyft, l-y-f-t.

Speaker 2: 24:59

V-n-o this one, august 29 calls being bought. They bought them in one print 4,998 contracts. So that's nearly 5,000 options. 5,000 options at 100 shares per option, because that's what you control folks. That's a half a million share position in VNO and it's at the August 29 strike. So not July, but August. Third week in August these expire. They paid a buck 35 for those.

Speaker 2: 25:32

And I'll throw out one more as part of that. Three at three EQX EQX $6 stock. They're buying the 750 calls and I'll emphasize, as I usually do on that show, michael, that I do three at three. I don't like buying way out of the money calls. I will hit for singles and doubles all day. I don't need to move my hand all the way down to the grip on the golf club or on the bat and try to swing as hard as I can to hit a home run. I don't need to do that.

Speaker 2: 26:09

That's not me bragging, that's just me saying that I have a large account that I trade for myself. I only trade for myself. But when I'm doing those trades I'm just trying to hit singles and doubles. I am not swinging for the fences. Every once in a while you get one that works out like that because, shoot, what was it today? I know Delta, we had some Delta unusual activity paid off today when Delta announced bad or it wasn't horrible earnings but they basically had lowered guidance. Um, but let me see what I'm just going to pull up real quick. What? What was the? Uh? Let's see.

Speaker 1: 26:52

Okay, Um quantum scape.

Speaker 2: 26:59

So Q S is quantum scapecape. We had it for unusual activity. Volkswagen Group did a deal with them for their lithium metal battery tech. Volkswagen is probably among all the car manufacturers that are the old school manufacturers versus Tesla, the new kid on the block or Lucid or any of those. But obviously Tesla makes more EVs than any company but BYD in China and Volkswagen says because of this deal they did with QuantumScape, they're going to be able to basically do a million cars, a million EVs a year at some point in the future.

Speaker 2: 27:46

Meanwhile I'm just going to hit QuantumScape here and see what were they buying. They were buying calls just recently in QuantumScape and those calls let me see where is that it's posting up now. Sorry, I had too many screens open at the same time. So, with the stock at $5, just before the 4th of July, july 3rd, they were buying the 550 calls. So that gives them the right to buy the stock at 550. They paid two or three cents for each of those.

Speaker 2: 28:24

Well, today QuantumScape shot through. I think it went all the way to seven today and as it did, let's see QS traded all the way up. It opened at 714. It traded up to 728. So the right to buy it at 550 was worth nearly $2. Let's call it $1.70 or something like that. You paid two cents for something that went to $1.70. That's a lot more than 10x. So that was our big winner today, quantumscape.

Speaker 2: 29:13

But we did okay with, you know, a number of those unusual option activities. I'd say, michael, right now there is more unusual activity than I have ever seen. Don't know why. You know, is it all Pelosi? And you know the members of Congress? I'm sure the Republicans do it too. By the way, I'm not sure that it's Mitch McConnell, but some smart Republicans are probably doing it too, because guess what they can do legal insider trading. Now they're trying to yet again pass some sort of bill to back off of that and say, look, the American public's getting pretty pissed at us trading on this insider information. But right now they still can, and they do on a daily basis, I guarantee it.

Speaker 1: 30:00

Unfortunately, I think a quarter of the American public still thinks Greenspan is head of the Fed. You've got to be careful with that line of thinking on that. Markets obviously have a bias to go higher. The number of days goes up versus down. I'm not big on the options space but I'm going to make the assumption that from an options perspective, you probably naturally want to be long bias, call bias more often than not, aside from doing certain strategies to manage Probably about 70% of the time, I'd say 70, I'm in calls, maybe 30% of the time I'm in puts, as you know, the old expressions stocks take the steps up and the elevator down.

Speaker 2: 30:46

uh, stocks take the steps up and the elevator down. Those, those down moves happen fast.

Speaker 1: 30:48

but you got to be just as disciplined to the downside as the upside, except in 2022 where it was a staircase down, which was unusual, right in both stocks and bonds, as we know. But but okay, so let's talk about that that 30 of the time. Um, is there something from a big picture tech analysis market movement perspective that makes you say I need to bias the positions to be more on the put side, or is it more just feel?

Speaker 2: 31:16

I trade very little on feel. These days, michael, I try to make over 80, 85% of my trades based on the unusual activity. And what makes it so? What makes unusual activity something that stands out to me? Somebody buys a lot of options. So if the open interest meeting from the time that option was listed until today, it's got an open interest of 500 contracts, okay, what if it trades 5,000 contracts tomorrow? Number one I know those are opening trades. They're not just flipping the 500 in and out 10 times, they're buying 5,000 contracts through the offer. I want to be on that trade. Sometimes that happens on the put side Frequently in fact, it happens on the put side bigger than the call side, and I'm more than happy to follow right along with whoever that smart money is.

Speaker 2: 32:18

Again, there are so many ways that people can obtain information that is not illegal. In some cases it is, but in most cases it's just that. Well, john is in Puerto Rico. That's where I live most of the time. John's in Puerto Rico, that's where I live most of the time. John's in Puerto Rico. He can't be at this super microcomputer investor day in Las Vegas and at the same time I can't be at the FDA awaiting a drug approval and so forth and so on. But I guarantee you somebody, just like the show Billions, somebody at Axe Capital, is at the FDA waiting to hear if that drug sounds like it's going to be approved or not. It's really, you know, we're not seeing as much. In fact, the placebo is doing just as well as that drug, in which case, of course, it's not going to pass phase one, phase two or phase three trials.

Speaker 2: 33:21

There are people that will be at all of those things. Some of those people work for the likes of Axe Capital, the fictional firm, but the rest of them are working with Andreessen Horwitz, even though they're a PE or a venture capital firm. They're working with Blackstone, blackrock, you know, any of the biggest hedge funds on earth, citadel, because that's going to be alpha, that's going to be something that allows them to outperform the markets. So they are going to have people there to garner as much of that information as possible and then, when they give it to their you know the PMs on the desks those guys are going to guys and gals are going to be trading it.

Speaker 2: 34:10

And, by the way, back to Michael's point and mine about women, I think sometimes, michael, men have too much ego in the trade. That's not to say that women don't have ego, but for some reason they're able to push it aside better in many cases. Bryn Talkington, great example. She runs shoot that big firm. It's a multi-billion dollar firm, she trades a lot of options out of Houston, texas, and she will routinely cut her losses I think faster than most guys and she will then have less of those drawdowns that guys have saying I know I'm right. I know I'm right and then again you're not. I know I'm right and then again you're not.

Speaker 1: 35:29

So on the unusual options activity, I am curious. You mentioned Tesla and NVIDIA and others, the bag seven. Is there anything to suggest that you have better returns or better risk, just whatever you want to frame it with stocks that are not in the media, that have unusual options activity, right Sort of?

Speaker 2: 35:54

the things which are not getting attention, which maybe it's a biotech company as an example. Yeah, in fact, the best trades, I think quite frequently are exactly like QuantumScape, where it wasn't in the news until it was. Quantumscape moved 31, 32% today. And why? Because of that Volkswagen deal, of course. But when you see something moving and unusual activity like what we cited in QuantumScape, that somebody bought a lot of these calls a lot more than usual, so, again, unusual that without a known catalyst, known catalyst might be earnings. So it didn't have earnings. That's not why. Was it a new product introduction? No, was it a lawsuit being settled? No, but many of those might be things that are known about a certain stock that is likely to have one of those catalysts. If it doesn't have a catalyst, if it's not in the news, I like that move all the better because there are a lot of amateurs, even if they're not hedge funds, but they might have a lot of money.

Speaker 2: 37:04

I know regular investors that trade 5,000 contracts, that's half a million shares, like we discussed. But I know investors that swing that kind of bat. I don't. I trade 100 to 300 contracts at a clip. I don't trade 5,000 contracts, but there are those that do, and when would they do those trades when they have insider information? Maybe, but most of them are doing it because, hey, earnings are tomorrow and I think AI is blowing it out, so I'm going to buy some NVIDIA upside calls. Well, I'd rather buy it because I saw unusual option activity. I'd rather buy it when I don't know that they have earnings tomorrow, but instead it's like and I don't know that they have earnings tomorrow, but instead it's like why am I seeing all this unusual activity over here right now If there's no known catalyst? Maybe somebody really knows something that's not public.

Speaker 1: 37:59

I'm jumping on that trade. So you mentioned you do more than just the options, obviously. So diversification is not just about timeframes, about asset classes, and more than just the number of stocks, number of strategies. So, with that in mind, I got another question from YouTube, from Chris Sinclair, which says what do you suggest to invest in for 20 years, steady for retirement? Now, I will caveat this by saying who the hell knows what's going to happen in 20 years, right? I mean, it could either be an AI-driven world where we're all getting fed or we're all going to be fighting with sticks and stones. And if you know the quote that I'm referencing, you know what I'm referring to there, right?

Speaker 1: 38:37

It's a nuclear play for the wrong reasons, but any thoughts of sort of just very long-term, outside of the options world what's interesting to you.

Speaker 2: 38:51

The most interesting thing right now that everybody talks about, of course, is AI. And then the next thing they talk about, the things that Michael writes about and so forth are okay, but is it priced in? Because, you know, whatever Amazon and a number of other stocks 98 to 99, had those explosive moves and then many of them became dot bombs not dot coms, dot bombs and some survived, like Amazon. It went down to single digits but obviously turned it around and survived and thrived. Obviously turned it around and survived and thrived. So what with a 20-year time horizon? I would say energy, because right now AI is so important. So many people are betting billions, perhaps trillions of dollars on AI-related things and God bless you if you have invested in AI early. I wish I invested in it earlier, but I've been in a number of these stocks that I've talked about already MU, arm, nvidia, supermicrocomputer, all of those kinds of things, even Intel, microcomputer, all of those kinds of things, even Intel, which was not a winner for me, but I think it will be. I think the place to invest with at least a five-year time horizon is energy, because these devices or these technologies, I'll say it's not a device because it's in the cloud, it's in the data centers, but those data centers are putting up mind-blowing numbers in terms of electricity demand pull, if you will. So EVs were already putting a strain on our grid and grids around the world. You couple EVs with AI and we're in a world of hurt. We cannot produce enough electricity for all of the EV vehicles that are going to be on the road along with AI, as more and more people use it for everything. Ai as more and more people use it for everything. I mean, you know, accenture did $900 million in AI this year or, I'm sorry, this past quarter. That's Accenture. You had SoundHound today talking about. Now they're SoundHound AI and they're going to, you know, basically play through Peugeots and Vauxhall and all of these vehicles just by me, you know, allowing SoundHound to do that through that vehicle and provide AI for what I want to know, what I want to listen to and all that kind of stuff.

Speaker 2: 41:46

There is going to be so much demand on electricity that I don't think you can lose betting on energy. I'm not saying fossil fuels, I'm not saying oil. I think oil goes higher, by the way, but I'm not saying oil, natural gas, that is a source of energy, instant on power, like that. So if you have a coal fire plant and you're at peak demand, you're going to put on nat gas if you have the ability to, because it takes a while to get that water boiling with coal once you're at peak, I mean, but with nat gas they can boom, fire up those additional boilers and get those turbines turning. So I would say nuclear, which is one of my top picks. Ura is an ETF for it. I'm in that, I'm in CCJ, camco, I'm in UEC, I'm in UU, uu because I'm a true believer.

Speaker 2: 42:47

I think these go higher, higher, higher. They were unduly hit by the Fukushima disaster and Chernobyl and people all of a sudden said this isn't safe. We're going to shut down these nukes, one of the biggest mistakes Europe made. France is lucky that they didn't shut down as many as they were going to, but a lot of these are going to be huge winners five years from now. Again, ccj is up seven times. You put a thousand dollar investment, it's $7,000 five years later. There aren't a lot of those out there, other than the AI plays, but this is going to be one of them.

Speaker 1: 43:33

Speaking of the AI plays another question from a McMarket rebel Cool. Why do you think AMD hasn't gotten the love in the AI space?

Speaker 2: 43:44

Why do I think what isn't getting love?

Speaker 1: 43:47

AMD is not getting the love.

Speaker 2: 43:48

AMD. Um, yeah, you're right, it's not getting as much, it's getting some, but you're right, not as much. Love, um, I don't exactly know why. Um, I haven't seen near the amount of unusual activity in that one either. So, in in some cases folks, um, like all of you, including Michael, we can't be experts on everything. I can't tell you why, but once I see something starting to move and a lot of interest in it, then I can really research that hard and find out what's there.

Speaker 2: 44:23

I mean, a lot of you are out there. I'm sure when you heard QuantumScape you thought lithium, yeah, but they're not a lithium miner. They're not taking lithium out of the ground in Nevada or in Afghanistan or whatever. By the way, kazakhstan is why those uranium stocks are hopping, because Kazakhstan has some issues regarding extraction of uranium from that part of the world. But and that just happened yesterday I think overall the lack of upside move out of AMD could be partially on. The things that Apple has been doing creating their own chips certainly hurt Intel over the years when Apple was getting deeper and deeper involved in chip development and so forth for their myriad offerings of computes, whether it's these kind of computers or whether it's laptops and desktops and things like that. Apple has hurt both of those companies a lot as they've moved away from chips by AMD and Intel.

Speaker 1: 45:40

Taking it back to big picture, options traders are supposed to love volatility. We have some pretty low volatility and you and I both know volatility can stay low for a long time. A lot of that will depend upon credit spreads. As I keep saying, there's a connection between credit spreads and vol and equities. Is there anything that would suggest that from an options perspective for example, if the VIX crosses 20 or 25 or 30, you're changing up your options approach and strategy? At a portfolio level? I mean, I know there's plenty of hedge funds that will degross their leverage at certain levels. So when you see certain vol levels getting hit, what do you do?

Speaker 2: 46:30

levels getting hit. What do you do? I tend to be a bigger seller of vol as it goes high and a bigger buyer of vol when it's cheap, like this. Why is that? I would rather be in option spreads or options outright. When vol is cheap, it means my premiums are lower. When vol is high, I like selling those. Now, not in every case. I'm not scanning constantly for where's the 300 vol right now. You and I know, michael, that 300 vol is attainable all the time in biotech stocks, in cancer treatment stocks, stocks that are coming through phase two trials, that this is either going to make or break that company. Yeah, they deserve 300 vol. I'm not selling options on that, but if I'm talking about again NVIDIA, ibm, dell, super microcomputer, whatever it might be, and the vol is moving up because people are concerned, chinese banks, for instance.

Speaker 2: 47:34

Kyle Bass was tweeting yesterday that Chinese banks are running at 340% of GDP to their debt. We run at one in the United States, these banks. We run at one in the United States, these banks. So could there be a major failure over in China? Yep, there could be. Is China completely disconnected from the rest of the world? Nope, not at all. So if we have something like that.

Speaker 2: 48:08

Like you mentioned, credit spreads, which is smart because those were the canaries in the coal mine for 2008,. Were those credit spreads? If these credit spreads start blowing up again now, I'm not saying they will, but all you have to do is look at what happened in March when those various banks, like Signature Bank, like Silicon Valley Bank, like Republic and so forth, when their CDSs or credit default swaps were blowing up. Yeah, you had a pretty good indicator that there was trouble and some people feasted on that. Obviously the big four on that. Obviously the big four Citigroup, wells Fargo, jp Morgan Bank of America, merrill feasted on that because they absorbed those like that. But that wasn't the kind of credit defaults problem blow up that we had in 2008, fortunately.

Speaker 2: 49:08

Could there be one of those out there? Eh, you know, that's what we all worry about, or we should, and just as people you know looked at, for instance, the president at the debate have struggling to sound cogent and so forth. I think a lot of us saw some of the signs of this a long time ago. But how much can you bet on that? And I know you can bet on predict markets and all that kind of stuff, but the same thing's true with bank failures and things like that. Until you actually see a line and a run on those banks, which we saw in all those that I just named, it's just you recognizing, like Kyle Bass did, that there's a problem. But is that problem going to be solved by just the Chinese printing more yuan? Yes, probably, and letting some of that bad debt just go away? Yeah, probably. So it's not the same as in the United States.

Speaker 1: 50:16

As we wrap up, maybe talk to the audience a little bit about market rebellion and some of the stuff that you're doing outside of X.

Speaker 2: 50:23

Sure, well, this hat, the one I'm wearing 10X those of you out there. He's got so many companies that are billion-dollar companies, and the guy started as a car salesman and started teaching people number one how to sell, number two, how to manage their businesses and things and then built this huge portfolio of great businesses. Well, we partnered with them because, as good as we think we are at marketing to investors like yourselves, we knew we needed some more muscle and some more marketing expertise and sales, and that's what Grant brought to us at Market Rebellion. So we're doing a big webinar tonight. Believe it or not, this number will seem strange almost it's so big, but we've got 16,000 people registered for our webinar tonight at seven o'clock. If you go to marketrebellioncom, you can see that, and it's free, not charging a penny for it. Are we selling something? Yes, we're doing instant cash flow real estate portfolio. You want to know how to make money on real estate without owning any stock? We'll show you tonight. So we're doing that, michael, and thank you for letting me say that we're.

Speaker 2: 52:00

Also, we bought a brokerage firm called SoGoTrade that we are partnering up with those guys. They've got stock options, futures, as well as cryptocurrency, and they're in 85 countries. What did they need? They needed what we needed and now what we have with 10X. They needed marketing and we're going to get this thing to be multiple, hopefully 10 times bigger than TradeMonster, which we were lucky enough to sell to E-Trade in 2016. The next time it's going to be 10 times bigger and the tools for traders, the spreads that are built in it's free trading we don't charge commission trading. It's going to be big and I think you'll hear a lot about it as we go through the rest of this year 2025, 2026. I think it'll be a great ride.

Speaker 1: 52:57

I give you a lot of credit, John. You've been at this a long time and you know how to communicate and educate, and that's not an easy skill, especially in a world where you made that point about. You're not an expert in everything, which means you're not as popular an ex as others which claim to be experts in everything.

Speaker 2: 53:15

That's right, you know if. What did Bill Maher say? If Martians showed up, somebody would show up as an expert on Martian. You know skeletal structure or something like that, you know really Appreciate everybody watching this live stream again.

Speaker 1: 53:30

This will be an edited podcast under Leadlag Live. Check out that webinar if you are watching this live tonight, and hopefully we'll see you all again on another edition of Leadlag Live. Thank you, john, appreciate it.

Speaker 2: 53:39

Thank you, michael Best, to you and all the audience, Thank you.

Speaker 1: 53:43

Cheers buddy.