Fed Gets Dovish? | Post Election Year Cycle | Option Vanna Rally? | In the End its Earnings
By Derek Moore
Show Summary:
Derek Moore and Shane Skinner geek out on the second derivative option Greek Vanna to understand how implied volatility changes cause buying or selling in markets. Plus, does Powell and the Fed not care about inflation anymore? Later, examine the post-election year seasonality to see if we are entering a historically weak period. All that plus what happens historically in markets when the fed has long period between rate cuts, interest rate probabilities, how to understand why stocks go up or down (return attribution).
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Topics Include:
- What is Options Vanna?
- Why do implied volatility changes cause buying and selling in markets?
- How do option market makers hedge or offset option orders?
- Understanding how price to forward earnings (the multiple) and EPS estimates drive price
- What type of environment are we in currently?
- The Fed’s Jerome Powell Jackson Hole speech hints at dropping 2% inflation target
- Did the Federal Reserve just give the ‘all clear’ for a rate cut turning dovish?
- Why earnings estimates drive price in the S&P 500 index
- How implied volatility changes affect an option’s Delta
- How VIX Spikes and subsequent drop causes additional buyers to come in
- What historically happens August to October from a post-election seasonal standpoint?
- Data shows that when the Fed has time between interest rate cuts historically markets do well
Mentioned in this Episode
Jay Pestrichelli’s book Buy and Hedge
Derek’s new book on public speaking Effortless Public Speaking
Derek Moore’s book Broken Pie Chart
Contact Derek