Lead-Lag Live

Trading Psychology Unveiled

• Michael A. Gayed, CFA

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Remember when trading meant calling your broker and waiting an hour just to find out if your order was filled? That world is gone.

JJ Kinahan, CEO of IG North America (parent company of Tasty Trade), shares how the playing field has fundamentally changed for retail traders. With 21 years of experience trading on the Chicago Board Options Exchange and leadership roles at major brokerages, JJ offers rare insight into this transformation.

Today's retail traders wield professional-grade tools, instant executions, and information flows that rival institutional capabilities. The most dramatic shift? Options trading is no longer exclusive to professionals. As JJ explains, "Options are giant probabilities" that can be used strategically when traders understand the risks involved.

The conversation explores a fascinating retail trading psychology: during market uncertainty (like the recent "tariff tantrum"), traders initially flock to broad ETFs like SPDR and QQQ, gradually returning to individual stocks as confidence rebuilds—starting predictably with Microsoft and Meta. This behavioral pattern offers valuable signals about market sentiment that even professionals watch closely.

For new traders, JJ's advice is refreshingly straightforward: start with one contract, know your personal risk tolerance, and understand why you're entering each trade. "The easiest thing in the world is to risk more money. The hardest thing is to risk a lot, lose it, and then get into a bad cycle where you feel you have to make it back."

Looking ahead, the trading landscape continues evolving toward 24/7 access, with Tasty Trade launching 24-5 equity trading by June. This shift reflects growing global interest in US markets and the expectation that investors should be able to react to news in real-time, regardless of time zone.

Ready to level up your trading knowledge? Explore how defining your risk parameters might be the most important skill you can develop as a trader.

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Speaker 1:

I mean it's amazing to me that there's still all this. I don't use the term dry powder because I think that's cliche, but there's a lot of money that's still seemingly just like ready to deploy.

Speaker 2:

Well, I think what you know one of the things also is 401ks have been a great thing. For that. I think many younger people have been drilled into their head. Put some money aside At least I hope they have drilled into their head. Put some money aside at least I hope they have. You know, I get amazed every time I go anywhere at how much. To your point, if you go to a nice area of a city or something like, how does this many people have this much money? But it is really amazing that people continue to have money to trade. Now, one of the things we will also see is many people have retirement money here and they put aside a different amount to trade. Now, one of the things we will also see is many people have retirement money here and they put aside a different amount to trade the market with. So, to your point, I think it also depends and this is something I would advise people to do is what's your purpose on your trade?

Speaker 1:

My name is Michael Guy, a publisher of the Lead Lag Report. Joining me here is JJ Keenahan, tasty Trade. I'm pretty sure I've heard of that company. You guys are making the rounds, but, jj, introduce yourself. Who are you? What's your background? What have you done throughout your career?

Speaker 2:

Sure, Thanks for having me, Michael JJ Keenahan. I'm the CEO of IG North America, which is the parent company of Tasty Trade, which is our brokerage firm, Tasty Live, which is our content side of our business, Tasty FX, our FX business, and Tasty Crypto, our crypto side of our business. So you know, we encourage anybody to come in and use our platforms. It's a retail brokerage firm and we are the same people who started Thinkorswim, which ended up being sold to TD Ameritrade and ultimately, is now part of Charles Schwab. My background personally is I traded on the floor of the Chicago Board Options Exchange for 21 years. I left there to go to Thinkorswim. We got taken over by TD Ameritrade. I stayed there for the next 16 years and then I came over here as CEO three years ago.

Speaker 1:

Okay, so a lot of real background in the industry, and there's obviously been a big proliferation of different brokerage firms focused on the retail trader. I am personally always blown away at how retail just seems to control the market. It's not the market of pre-COVID anymore and you see that at major lows retail does come in, and whether they're the reason that it's the low or not it's unclear. But I'm curious to get your thoughts on why is it that retail has become so powerful?

Speaker 2:

Well, I think a lot of it goes back quite a few years, and you think about when I was on the trading floor. This is up till 2006,. We had a huge advantage. The platforms were not very good for retail. The information was absolutely awful. People had to call in and literally wait for their fills. They might not get filled for an hour. Now you fast forward to where platforms are. The fills are instantaneous.

Speaker 2:

The information is actually probably better than many, even professionals, get, because they're not looking at news or et cetera. You know, and the biggest difference is you do what you want when you want and think of all. You know we broadcast 14 hours a day on our Tasty Live side. We're just giving people ideas and education, and the biggest thing for the self-directed investor is to really get an idea. What should I do now? What's happening now? Why is this happening? You know, similar to a lot of what you do, michael, all day, which is fantastic. You're just trying to help make people better, give people really good information, and that's truly been our mission.

Speaker 2:

And we foundomenal platforms, great education, much of it free, and you know many of our competitors also do very nice education and the fact that people had time then, and the greatest thing, in my opinion, that happened during crypto happened during COVID, I'm sorry is that even if people didn't continue to trade et cetera and hopefully they did, and we know that's my goal is to get everyone to trade here every day but even if people didn't, it was the first time in many people's lives that they actually got educated about how the market works, even if it only helped them make better decisions and how they allocate in their 401k. But what we have seen is a large part of retail continue on, start to get more educated and what they've also done is not only, you know, the ability for them to trade partial stocks, along with the ability for people who got more knowledgeable about how the options market works, has really helped the retail trader just participate in a much different way, in a much greater way than anyone ever even dreamed of before that time.

Speaker 1:

Okay, so that shows a few directions to go on that. And let's hit on that options point, because that's where I think it gets to be really particularly interesting. It seems to me and obviously you're much closer to this than I am that retail really has gone into the options market. You know, full on right. Retail really has gone into the options market. You know full on right. I mean it's and you can argue this is similar, related to sort of this cultural shift towards wanting to bet more and parlays and things like that in terms of you know, some of these gambling type of apps that you see out there. But I thought options were supposed to be sort of the domain of the sophisticated. Talk me through that, because are we at a point where retail really understands how options work or is there still a lot of misunderstanding about the risks involved?

Speaker 2:

Well, I think that there's more of a media if I'd say it that way narrative that options are super risky and they can be if you want them to be. However, I think what most people have learned to do is there a speculative element to them? Absolutely. There are people who are going to do that because, you have to remember, all options really are our giant probabilities. What is the probability that we will be at a certain strike on the expiration date? So options are probabilities.

Speaker 2:

However, what we have seen a significant change of, particularly in the last couple of years, is people starting to use more spreads. Why do I love to see people do that? Because the biggest mistake you can make in trading options, in my opinion, is not defining your risk. So if you go in and you trade a spread, you know right away what you can make, what you can lose and how long that is going to take to its longest end, of course, because there are expirations to options. So when you start to define that type of thing upfront, it makes it so much better.

Speaker 2:

The perfect example, michael and I mean how many times have you heard in your life don't be emotional about trading. But I think you and I both know it's money. People get emotional with money. One of the nice things about the options market again, because there are expirations and you can define your risk is you lay out the worst case scenario before you make the trade. You're still going to be angry if things go against you, but at least you say OK, I know this is the worst that can happen, so I can make better decisions. The reason people make bad decisions when they get emotional is they never thought about worst case scenario and we really try and educate people. What most professional traders do, what we did when we were on the floor Start with the bad case and then say does the good case pay me enough to take the bad case risk?

Speaker 1:

Part of not being emotional is having the right unemotional tools right to play with, and you often hear that line that retail has so much more access to tools than ever before. Stuff that was much for an institutional side is now easily accessible, whether it's algos or things like that. But let's drill down when you hear that line that institutional tools are available to retail. What are those tools? What are people referring to?

Speaker 2:

Certainly, you know people can use APIs to write up their own type of charting software et cetera. We obviously provide tons of charts et cetera, and I think if you think about just the tools that are available on our platform, you have what is the probability that an option will expire at any single time. You know very much related to Delta, but the difference is probabilities. Take into account volatility in a different way also, but we'll also have what is the? What is the probability it'll touch a certain level at any point in expiration. So, obviously, full chart probabilities that help people, analyzation tools. So you can say well, if I make this trade, let me analyze what will happen, not only to that individual trade excuse me, sir but what happens to the rest of the position that I may have on. Those are some of the really good things. Now let's take a that any firm can provide, and we certainly do provide all of that.

Speaker 2:

But take a step back and look what the industry is providing. What the industry is now providing are expirations on the ETFs and indices that are daily. The best part about options is that you can really, you know, as part of defining your risk, you define timeframes also. So the fact that you can now define timeframes pretty accurately. Overall, you lay over the fact, all the risk tools that are available to you, you lay over all the probability tools that are available to you firm, our firm, you know giving you ideas and education all day long, so you understand the risk and how to use these tools in the best possible way. It really is mind blowing to think how far and the last thing being no commissions to trade equities you know. It's mind blowing to think where all of this has come in the last 20 years. Are we at some?

Speaker 1:

kind of saturation point in terms of the things that are available to retail. Meaning, have we, have we taken care of all the low hanging fruit and mostly high hanging fruit there?

Speaker 2:

I think we'll continue to develop new tools overall. You know, one of the things that we're starting to see more and more is people starting to take an interest in futures and particularly futures options. And the reason they've taken an interest in futures options is because the framework is basically the same If you trade an option on a SPDR, if you trade an option on an SPX. What's the difference on an S&P 500 futures option? In all three cases, you probably don't want to deal with the underlying, so it makes it a lot easier when you go on with the fact that I would prefer not to have to trade the future, I'm going to unwind my position before expiration days, et cetera. So when you start to have that mindset going in, then they look very much like each other and you go with what fits you best at that time.

Speaker 2:

Of course, I'm not saying to anybody that you should just go out and trade futures options immediately. Please get educated. If you're going to trade an option at all and you know, if you want a paper trade, go do that. But I will warn people about paper trading. The one thing about it is I'm one of the greatest paper traders in the world. I can lose $50,000 paper trading and I won't flinch. I'm down $20 in regular trading and I hate everyone I ever met. So there really is a big difference there in terms of that feeling you get when things go against you.

Speaker 2:

But back to where I was going about what's going on in the industry. The futures market has gotten so much more interest from retail and it's probably where the securities market was eight-ish years ago. But more and more people, as they get educated, realize that products become more and more fungible, the more you start to understand them, and what it comes down to then is you as an individual saying what fits me best in this particular situation. The exception to the rule in this case would be some of the commodity options, because they work backwards from everything else. So I won't go there, but I do want to make sure that I say that Again being educated on how they work, being educated on the differences in the underlying, helps you make a better, more informed decision.

Speaker 1:

There is this impression out there that retail just just YOLOs, you know, they just go all in and risk management be damned. And I think you can argue that there's some evidence of that, because a lot of the folks tend to go into levered ETFs and kind of more speculative type of gear products. Is that fair to say that there's just this sort of wave of aggressive positioning?

Speaker 2:

I would dare anyone to show me any profession, any skill, anything that goes on where a certain element are doing it wrong or doing it in a way that probably doesn't make sense to people who understand it. You're not very good at it when you start. So if you're going to make a bad and just like any new skill you learn, you're just not good when you start, and so people when they start, if they want to go into things they don't understand, are probably not going to have good success. So there is an element that's going to happen there. There are people you know where you started who do like to speculate, and that's fine if you understand what can happen to you if you do it. I think the traditional path for many people quite honestly has been they do come in, they buy a call in a stock they think is going to go up. The stock maybe goes up a little, but not enough for what they paid for their call, and they're like one of two paths tends to happen mostly from there. They're like oh, they screwed me. Or they're like but there has to be something to this and they spend a little bit more time and get a little bit more educated For anybody who's listening to this podcast and you're new and you're trying to get started, the biggest piece of advice I can possibly give to you is please, please, please, start as small as possible.

Speaker 2:

If you're trading an option, start with one contract. Learn with small amounts of money. It's trading an option. Start with one contract. Learn with small amounts of money. It's the greatest favor you can do for yourself.

Speaker 2:

Again, you talk to people investing all the time, michael, and, as you know, one of the biggest mistakes they make is they lose too much money when they are starting out. And if you just start with little amounts, you'll learn a lot because, again, you're not good yet. It's just like if you started to play golf. You realize when you start you're going to hit maybe a good shot occasionally, but you're not good yet and you're trying to get good, so don't put so much pressure on yourself overall.

Speaker 2:

And again, I just think the one contract to start is really the best thing anybody can do for themselves and have that mantra for a little while. Now you might want to engage with more you know with the market a little bit more often, maybe weekly, or, you know biweekly or monthly, just to get used to it Because, again, like I'll use golf as an analogy when you're swinging you want to do it a little more often and get comfortable doing it. But doing these small amounts will help you get more comfortable when you feel comfortable. The easiest thing in the world is to risk more money. The hardest thing in the world is to risk a lot of money, lose it and then you get into this bad cycle where you feel like you have to make it back right.

Speaker 1:

Let's talk about that word risk. I study finance at NYU. One of my majors risk is volatility. Risk is about risk of ruin. How should retail think about managing risk? And how does one even do that, given all of these tools that now retail, the ability of retail to access?

Speaker 2:

Well, I'm going to combine what you asked me on the last question with this one a little bit. I think one of the things that retail traders become really, really good at is managing their money, and what I mean by that is the years I traded on the floor. I never thought do I have enough money to make this trade, I just made the trades. What happens for retail is they have a set amount of money. Maybe somebody has $40,000 in their account. Well, they have to think to themselves should I risk $1,000? Should I risk $2,000 on this trade? So they really start to become good at managing individually every single trade as well as their overall portfolio, and I think that that's a really smart way to look at it. Am I just going to? You know risk to one, two, three percent per trade, and I think that that's you start to become smarter in that way in doing so. So I think the other thing that people have to develop going back to me talking about the one contract is what's your personal risk? An individual Michael may be able to say, ok, I can trade you know $100,000 worth of risk and it's not going to bother me. In the least I may say you know what I trade more than $20,000 worth of risk. I feel really uncomfortable, and so I think people have to get themselves to a point. Maybe for some people it's $200 worth of risk. Whatever it may be, we're all at different points in our lives, but you're also at different points in your risk tolerance. So just because somebody else is risking a lot of money doesn't mean you should do it, and you know you have people like yourself who are out here really trying to educate people the right way.

Speaker 2:

Unfortunately, there are too many people who will just say, oh, I risked all this, made all this. They don't show you all the losers on the way, and so with that, I think one of the best things that people start to learn who are going to survive at all is what's my personal risk tolerance, and that you should never apologize for it. You should feel good about it. Maybe if you're starting out and it is $200, have three or four successful trades, then say you know what? I'm going to go to $300 now. Step up the ladder slowly but surely. If you're younger, particularly, time adds up. You know I always joke. You just want to hit single, single, single single, and all of a sudden you've got a pretty nice stack for yourself. You don't have to hit home runs. Time takes care of a lot of that in terms of just building smaller amounts on every single trade.

Speaker 1:

I'm sure you've seen that meme. I've used that myself before. Buy the dip, buy the dip. Already bought the dip, I have no more cash to buy the dip. Every single one of these dips retail comes in. Where is retail getting this cash from? I mean, it's amazing to me that there's still all this. I don't use the term dry powder because I think that's cliche, but it's amazing to me that there's still all this. I don't use the term dry powder because I think that's cliche. Right, but there's a lot of money that's still seemingly just like ready to deploy.

Speaker 2:

Well, I think you know one of the things also is 401ks have been a great thing for that. I think many younger people have been drilled into their head. Put some money aside At least I hope they have drilled into their head. Put some money aside, at least I hope they have. You know, I get amazed every time I go anywhere at how much, to your point, if you go to a nice area of a city or something like, how does this many people have this much money? But it is really amazing that people continue to have money to trade. Now, one of the things we will also see is many people have retirement money here and they put aside a different amount to trade. Now, one of the things we will also see is many people have retirement money here and they put aside a different amount to trade the market with.

Speaker 2:

So, to your point, I think it also depends and this is something I would advise people to do is what's your purpose on your trade, and what I mean by that is is this trade supposed to be a one or two day trade, that is, your trading money, or is this where you're saying, okay, buy the dip, a stock that I really like, and I'll use Microsoft as an example, not a recommendation only because Microsoft. Every time we've seen a dip buy over the last five or six years, microsoft's been one of the first or second stocks retail traders start to buy. It really is amazing. We study the behavior of our clients and every time that's the stock people seem to have the most confidence in in times of trouble and are putting their money there. They have incredible cash flows, as we know, so it makes sense to a lot of people that that's a stock people turn to. So I always look for when people start to start buying Microsoft.

Speaker 2:

But what I mean by that is am I buying Microsoft in this situation because I think, ok, I want to hold it for a long period of time? Or am I buying it and saying you know what? I think we're going to rally over the next three, four or five days and I'm going to try and sell it higher. Really, knowing why you're getting into a trade before you make the trade is a great idea. I've made the mistake many times. I'm going to guess you have a couple also, michael, where you went from being a trader I'm going to sell this in a day or two to being an investor. Oh, this will come back at some point and that's the worst possible thing you can do. You're going to be wrong occasionally. Know where again, know where your risk is and know where you're getting out. The worst thing to possibly do is say this time's different, and I always joke. The only thing that's going to be different is it's the most money you're ever going to lose.

Speaker 1:

Yeah, I just had a little joke that an investor is just a trader who's in a red. I think that's the real way to say it. Right, that point about Microsoft's interesting, so it takes me back a little bit to sort of the Peter Lynch know what you own kind of thing. So that becomes what people are familiar with, right, because most people are probably on a Microsoft-enabled OS operating system. What other stocks do you find retail tend to sort of just keep on gravitating back towards.

Speaker 2:

Well, the Spider ETF is always largely traded, a normal QQQ ETF. When it comes to the individual names, the, you know, the everyday names that are traded are exactly what you would expect Apple, NVIDIA, Microsoft. You know, AMD is kind of interesting that it's one that's in there a lot Meta. Then you have weeks like this where you have some interesting earnings. So Home Depot has been a stock that our clients the last couple of days have traded quite a bit, and Target, because they both had news.

Speaker 2:

So I would say to your point earlier, if I look at the if you will, mostly Mag7 stocks compared to the what I'll call new stocks, In the new stocks people are trading a bit more speculatively that the earnings moves will move up a certain amount, down a certain amount, whatever it may be, as compared to some of those MAG7 stocks where people are saying, longer term, I'd like to own this stock. So again, I don't mind when I see that because people oh, don't you hate the speculative, people do it. No, they know why they're in the trade and that really is the bigger difference. They have an opinion. There's nothing wrong with having an opinion and setting this is the time frame I have for that opinion. I actually think that's a better person interacting with the market than someone who just has an opinion and says I'm going to let it go forever, Because that normally is not something people can weather the storm on, because every time there is a downturn like, oh my God, I have to get out.

Speaker 1:

How do, at least on the TastyTrade side, how do some of the retail clients, viewers, find new ideas? You alluded to education quite a bit and sort of idea generation, but talk me through how that actually looks on a platform. What's the journey like?

Speaker 2:

Sure. So you know I'll start with our Tasty Live side, which is providing content all day long. So, starting last Friday, you know the hosts on many of the shows like OK, we have Home Depot coming up next week, home Depot pre-earnings was expecting about a 5% move one way or the other based on their earnings. So that's pretty high volatility for Home Depot. So right away now you have a okay, a 5% move on a stock like that. You're talking about almost $16 one way or the other. So do you think that the stock will be more than $16 or less than $16? You can start to play it that way, because that's what the options market was pricing in. And one thing I would encourage people, even those of you who never trade an option, only trade equities one of the really good things options do is they say what a one standard deviation move is expected by the market. All market participants coming in give an expected move, and so with that, it's a really interesting way to start trading stocks too, because you can say, okay, if I'm going to buy a stock for six months and I'm going to put in my stop order down $3, but the stock in that timeframe is expecting a $10 move. Mathematically you're going to constantly lose money. So again, looking what the expected move is is going to help on that case. But back to the Home Depot example. If you're going to buy the stock and you know it's that big a move, well again, if you buy the stock expecting it to go up, you put in a stop order down $7. Mathematically you're putting yourself in a very difficult place. So these are the type of things. And, by the way, when Home Depot earnings came out, the stock moved $9.50 almost immediately to the upside, ended up moving back down about $4.50. So net on the day it had about a $14 move top to bottom. So again, the options market tends to start pricing this stuff in a few days before in terms of what will be the expected move on a stock overall.

Speaker 2:

We just let people know these are the type of things you should be looking for. If you find a trade idea in there, great, here's one. If you think it's going to be outside that move, here's one. If you think it's going to be inside that move. So just giving people ideas to think about. Of inner, outside moves, here's one. If you think it's only going to go up a couple of dollars. That's the type of thing we try to do. Then we use our platform for that, to show people how we are looking at these expected moves and which options we're looking at for those types of things. So it really is just about okay what's the best way to show the tools on your platform? And, more importantly, what's the best way to give people ideas? Even if they're not going to use what we said, we get them thinking.

Speaker 2:

I think one of the most difficult things for a retail trader, if you think about it, is you know they've done their prep work things. For a retail trader, if you think about it, is they've done their prep work whatever they have their cup of coffee. The bell goes off at 9.30 am Eastern and they're like, oh, what should I do? I wonder what everybody else is doing. So we're trying to give them that connection as to what many other people are doing.

Speaker 2:

Scott Sheridan from our brokerage side comes on every day at 10.15 Eastern and said, ok, in the first 45 minutes here are the top 10 symbols that we're seeing being traded today. Again, we're just trying to give people constant ideas as to what else is going on in the world, just to make them think. One of the great things about the market overall, as you know, is it's just about you know. It's a fight against yourself as well as against the rest of the world, and really just getting ideas, really starting to think, just helps you hone in on what you want to do, what you don't want to do, probably more importantly, and what you do want to do. What are ways to do it a very efficient way.

Speaker 1:

Talk me through some of the activity you saw during the let's call it the tariff tantrum. Yeah, the kind of volatility, because I think that's instructive in terms of sort of seeing how investor behavior or trader behavior is.

Speaker 2:

So I think there's a couple of really important lessons for people in that. So, as you know, the announcement came out after the close that day and for those of you who don't follow S&P 500 futures on our platform, the symbol is forward slash ES. Even if you're never going to trade a future in your life, I would encourage you to start following them because they tend to lead the market, be it up or down. That's where the money goes really really quickly because you can get 500 stocks instantly. The markets are incredibly deep and liquid. Right after it got announced, it rocketed up. It rocketed up. The futures were up about 32 points. Then, as we started going, country by country came flying back down the other way and, as you probably remember, after the close the futures were down well over 100 points. It was a gigantic move. We don't normally see that kind of move after the market close.

Speaker 2:

An important lesson, a couple of important lessons. The first important lesson is again knowing what your risk tolerance was, knowing what your risk tolerance was If you had S&P 500 positions on. Hopefully, people trimmed those up, if you will, a little bit, didn't have any loose ends and were very comfortable with the risk they were going to take. Going into that. The other thing about it for those who do trade options, it was a great testament as to why you should close out your options positions, because there's something called exercise and assignment which happens after the close. So what that meant was that, with this big move, people who thought their options were worthless all of a sudden, overnight, those options became worth a whole lot of money on the put side if you had sold them. So again, closing out your positions is a really, really smart thing to do.

Speaker 2:

It means discipline, and those who are successful long-term are disciplined. And it's easy to say be disciplined. As we all know, it's hard to be disciplined. I always joke if I was disciplined on everything I do, I could walk past Oreo cookies without eating three of them. But you have to decide where you're going to be disciplined in life. It's tough to be disciplined in everything. And if you're going to engage with the market, I would truly encourage you to be disciplined on the amount of risk you're willing to take, to understand it and to close positions when they go your way. You know, as you've, I'm sure, used on the show Michael and heard a thousand times, you know bulls and bears make money and pigs get slaughtered. You don't have to get the last penny out of every single trade or every single investment you make. You don't have to be the low, you don't have to be the high. There's plenty of room in between to make a lot of money, and I encourage people to close out their positions when they can.

Speaker 2:

So what was then? The behavior we saw the next day was a crazy. The next three days were crazy trading days Lots of opportunity, lots of back and forth. The market, though, overall, was having a tougher time. After that, to the point I made earlier, one of the things we noticed is we started to see people coming in and buying Microsoft. Along with Microsoft, they started to buy Meta. Those were the first two stocks that, overall, from a retail perspective, started to get a lot of play Along with the other thing that we saw in times of trouble, like we saw what you will often see clients.

Speaker 2:

What you often see retail do and I've seen it my whole career is they tend to buy things like the Spyder and the QQQ. Why do they do that in times of trouble? Because they're afraid to take risk on an individual stock. They want an index-related product, so they'll come in there representing the S&P 500 and the NASDAQ. When I start to see less trading on those two products and more trading in individual names, that means to me people are starting to get more confidence, and that's what we saw after day three. People starting to buy more individual names started with Microsoft. Meta went to Apple, actually went to Boeing.

Speaker 2:

In that situation I started to go out a little bit more to some of the traditional Dow stocks as well as the Mag7 related stocks. Pretty soon, on a normal day, we're going to see 35-ish percent of our trading being SPDR and QQQs. During times of trouble, we're going to see that maybe be 60% of our trading. But we noticed it was going from above 55 level down to about a 40 level at the end of that day. So we're like, okay, retail has confidence in this market again. And as we kept going up, we kept seeing that spread back out as people came back into individual names and it starts with a narrow amount and just keeps spreading out as folks are like hold on, this stock hasn't gone up as much as maybe some of the major ones and I have an opportunity there.

Speaker 2:

So it really is interesting to see that the ones that tend to go, the ones that went up last in this situation and I don't think you'd be surprised by that are the retailers, because in many ways they're the most affected by tariffs.

Speaker 2:

But you can see just in the last two days, with Home Depot earnings yesterday, with Lowe's earnings today, the differences on how people are thinking about tariffs and how people are actually, even in two retails that fight against each other all day long Lowe's saying they had good sales, my Home Depot a little disappointing. What does that actually tell me? That tells me that maybe the high interest rates people are a little more afraid to move homes. Lowe's is traditionally thought of the more high priced alternative, so perhaps people are putting more money into their current living situations rather than changing homes because of the higher interest rates. So it's a really interesting paradox going on right now and just starts making me think about okay, what does this mean for the housing market and for housing stocks going forward? Sorry, I know I went off on a little tantrum there at the end.

Speaker 1:

No, no, that's great and I think it's instructive to hear that perspective. Speaking about perspective, as somebody who's been a business leader for as long as you have, across all these different entities, I'm curious to hear your thoughts on what it takes to build a successful franchise, especially in a saturated industry where you might have to get creative on the UI and UX side and the marketing side. Talk me through any lessons you've learned over the years.

Speaker 2:

Well, I think the biggest lesson is always work with good people. I've been very fortunate. The people I've worked with my whole career I've known for a while before I started working with them, and so when you start that as your core of your business, that helps significantly. Then the next thing is when you hire and we're fortunate you take away some of the people who started this business, et cetera. Our average age is about 32, 33 years old. We have so many phenomenal young people and one of the things that actually aggravates me is when I hear people my age saying oh, the younger generation doesn't want to work, blah, blah, blah. I'm like well, then you're just hiring the wrong people. I think that's a myth. People want to work.

Speaker 2:

What you have to do is help people feel part of something bigger than themselves. Everybody wants to be part of something bigger than they are. How can you help them have that feeling that this is great and you want them to be part of it? And the other part of it is hold people to a consistent standard and say this is our standard. Are you meeting it? And if not, unfortunately some people won't and you have to part ways, but most people want to if you are consistent about what the standard is and if you help them get to the standard. Everyone struggles in their lives and I mean I'm sure you and I can name you know 25, 30 people who thank God they were in my lives, my life at a certain point and help me get to the next level. And I think one of the things I feel thankful for is that as I get older, I get to help a lot of younger people.

Speaker 2:

But to your point about UX, UI the business has changed so much. There have been so many new competitors who weren't even in the business five years ago necessarily, or weren't major players, who are now more than major players. You have to. You know our business is only seven years old. You have to constantly think about what's next. What are the next product sets my client wants? The biggest thing we all have to prioritize, I think, at any business, is what's my tech team going to work on next? Because you're always trying to prioritize. You only have so many dollars and so many people. What's the best tech? Priority for the next thing that you need and how fast can you deliver it? Priority for the next thing that you need and how fast can you deliver it? Speed and accuracy. And what I mean by accuracy is you also want to make sure that your platform is never down.

Speaker 2:

We're in a 24-hour market now. We trade crypto 24-7. You have to be up 24-7. You know overnight trading. We've had futures overnight for almost since our inception, so that makes sense. We're about to add 24 hour equity trading. So everything you do, you have to think about the fact that we always have to be up, but you still have to do maintenance and things like that. How do you plan those windows?

Speaker 2:

Overall, it's only becoming more and more complex and I think that, because crypto proved that there can be 24 seven trading, I would it would not surprise me within five years if we are talking about 24-7 trading on every product. Well, I won't say every product, but certainly equities. You're seeing more of the ATS is getting involved there and we're going to have, I know, a couple of new ones released within the year. So there's going to be more competition in terms of where those orders go. And if you think about it, you know we talk about, you know the American markets being the best, et cetera.

Speaker 2:

Many foreign people want to invest. Well, why wouldn't we give those people the opportunity to invest when they're actually awake. As we see demand coming in from Asia, as we see demand coming in from Australia, we're going to continue, I think, to see the markets that we trade be opened up more and more so those people can trade during the hours that they are awake and they are more functioning. And the biggest thing we'll see, hopefully, then, is liquidity going there, because at the end of the day, that's what retail truly needs. I always tell folks I think you want to be the smallest fish in the biggest pond. You want to be in, you want to be out. Nobody even knew you were there. The reason is, if everybody else is there trading, the markets are going to be really tight and you can get in and out at any time, and for a retail trader, that is the actual, you know true blood going through the veins is liquidity.

Speaker 1:

I'm actually glad you mentioned the 24-7 trading movement because I think that's maybe a good place we can wrap the conversation up around here. But do you think that's going to change anything? And then, from the TastyTrade side, is there anything that's being done to sort of prep for that? Does anything change on your end?

Speaker 2:

Well, you know, as I said, we're about to roll out 24-5 equity trading by the end of June. So all the preparation that goes into it making sure your systems are ready to go, and not only that, but making sure your support is ready to go too and then you have to think about okay, when dividends are paid, how you handle all that. I know this is a crazy thing, but what time does the day actually end in terms of what's thought of as the next day trade? What's thought of the previous day trade? So there is a lot of thought and planning that actually goes into this overall. So we're really excited. Our clients are really excited to have this access and so that they can trade.

Speaker 2:

Let's face it how much news has come out overnight or after the close over the last six months to a year? It's just becoming more and more and more. We want our clients to be able to react in real time if they so choose, and I think it's only natural. So that is 100 percent. 100%. Something we've been working very diligently on. As I said, we already do that for futures. So it wasn't a complete change for us, maybe adding a little bit more support, et cetera, just so the team doesn't ever get overwhelmed and our clients always have a good experience is obviously number one.

Speaker 1:

Make the pitch for using TastyTrade over any other platform and talk about sort of how people can sign up and access the service.

Speaker 2:

Well, I appreciate that. So tastytradecom and if you want to, you know, take a quick look at our content tastylivecom. So those are the two primary areas to get ahold of us or to apply for an account at tastytradecom. Our platform is built by people who traded options and futures for a living, and so we built in the platform we wanted to trade off of, and we've done this our whole careers. So I think that our pricing is incredible.

Speaker 2:

Our customer support I would put up next to anybody, because you'll be talking to somebody who did this for a living. They understand the risk. We constantly talk about risk. We give amazing risk tools, because what you'll find is, if you think of risk first, you'll be doing this for a long, long time. We have a long list of very loyal clients, and I think that is because we're very, our platform is very good and our service is absolutely top notch in the industry, because we realize that you, as the client, pay our salaries every single day, and so, with that, we're very conscious of making sure you're happy, because if you're not, there's too much competition in this space and you will leave. We never, ever, ever want that to happen.

Speaker 1:

Appreciate the conversation, jj. Hopefully those that listen to this and watch this enjoyed it as well. Learn more and check out TastyTree, and hopefully I'll see you all next episode of Neat Lag Live. Thank you, jj.

Speaker 2:

Thanks, Michael.

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Michael A. Gayed, CFA

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