And welcome everybody to another episode of smart money Circle.
I'm your host, Adam, sorry. Han with me today is CC legged
or whose co-founder of options AI which is a new brokerage firm
that makes options, spreads enjoyable and straightforward
with an easy-to-use visual, which I love visual platform CC,
welcome, welcome to the smart money Circle and thank you for
coming on the show. Great to meet you.
So likewise so CeCe, can you tell us a little about your
story and how you got to where you are today?
They sure so, well, I was an options Market maker but right
now, the college. And so, you know, I was in New
York on the floor of the American Stock Exchange way.
Back when before everything was completely computerized and you
know, I did that for years and then at some point, I left that
and I was doing a lot of options and trading education was
working with some, you know, some people that are on CNBC and
things like that and started seeing the Action space
particularly in the trading space through the eye of the
retail investor a little bit more when you're on the options
Market making side. You know you're essentially it's
all sort of faceless like you can see if something's from
Goldman Sachs you can see if something's retail you don't
really get a sense of like the intention behind all of that
order flow and then, you know, working with a little bit, you
know, as an educator and working with a retail audience and
seeing how people were using options.
And seeing that there was like, You know, sort of a big void in
a big difference between the way institutions is options in the
way, you know, retail investors, everyday investors, use options,
seeing that difference was sort of the inspiration behind
options II, which was, you know, options trading, platforms and
brokerages, haven't really changed in 40 years.
I mean, there were 12 and whistles and all, but it's still
this focus of, you know, platforms that don't really look
that different than You know, back when I was on the trading
floor walls of numbers options Chains, It's Greeks, it's all of
this sort of, you know, like esoteric knowledge.
That's really intimidating for the retail audience.
And unfortunately what comes from that is that, you know,
retail investors reach for the things in options that they can
understand really quickly. And that tends to be things like
buying call. Al's or buying puts and things
like that. And so what that ends up looking
like from an order flow perspective is retail order.
Flow is generally, looks like lottery tickets, right?
It's people being like you know, scanning and options.
Chain saying I can afford a $1 call what if this stock went up
right? I've been worth $2.
Yeah that ugly and whereas institutional option order flow
is much more you know sort of well thought out.
You know, for lack of a better term.
It's you know, it's sort of using options as a plan it's
using options around portfolios, existing positions, its
positioning for a move in a stock that they like, or hate,
you know, in the case of a hedge fund, in a way where it's like,
you know, this, we want to position for this stock going,
15% higher over the next few months.
We don't want to waste money thinking that it could go up
50%, right? Because that the chances of that
happening are unlikely. So that so what ends up looking
like is the way, institutional order flow looks, it's multi
like options trades. It's, you know, it's creating
zones of profitability and defined risk lost it in the
options chain if you can imagine that.
Yeah, so yeah, it's interesting. You and I but to some people
it's a, it's a real blind spot. They don't look at that side of
the equation, right? And so when we went and sat
down, To build options, AI. We were like, alright, well
let's sort of tear up the entire, you know, game plan up
until that point. We purposely did not look at a
lot of other products and we started thinking, you know, like
how do we how do us like ourselves as experts, see the
options market and we see it much differently than a wall of
numbers are at least most of us. And it's more, you know, we
decided that this should be highly visual.
You know, most investors and most Traders are looking at
stock charts, right? And then I would love to buy the
stock down here. Where's the stock went up here?
I'd probably sell right. We're here, I'm confused and I'm
not quite sure what I would want to do, right?
And the options Market provides all of that, those sorts of
opportunities to buy low, sell High, create income from a stock
going sideways. And all of those things you can
really picture. It's, you start to think of the
options chain out into the future as sort of these levels
of, you know, where I could, you know, be a seller or buyer or
you know, ad Bridge, you know, all of those sorts of things.
And so what we did is we based everything around a
visualization of the options market.
So at options. AI, you see the historical chart
and then you do a visualization of the future.
And that future is basically all the options chain drawn out with
expectations from the options market.
And then based on the side, the has expectations are based on
the Greeks or add. They how do you bases
expectations. Yeah so it's basically it is and
Even thinking, you know, how you got to the Greeks is basically
just buyers and sellers, right? Okay.
So the same way that the historical stock prices were
buyers meeting Sellers and you know, Finding consensus.
And then, you know, one side of the trade name wrong, right?
Yeah. It's Market is doing the same
thing and in the beauty of the options Market is, it's
incredibly efficient, right? And it includes every person
from the Robin Hood Trader with $500 in there.
All the way up to Goldman Sachs, right?
And it's all of those people's expectations out into the future
and so when you get into like sort of the Greeks and things is
the options Market creates something that you know, options
Traders, call the expected move, right?
The expected move the easiest way to think of that and to
visualize that is it is basically like the point spread
on a football game. So if a stock is $100 and
they're about to report Quarter earnings.
Then the options Market is doing a price of.
We're all of those expectations in the future, think that stock
could move higher or lower and that comes out as the expected
move. And so let's say a 100 dollar
stock, the options Market is expecting a move of eight
dollars on earnings. Well, that means that we can
draw that out into the future for that week of earnings and
say, you know, the options Market is pricing to move
anywhere from 90 to die. Is to $108 right now, that
doesn't mean that it's going to happen, right?
That means that's where everybody has put their options.
That's a consensus and S sounds, right?
Yeah, so to go to do any sort of, you know, we would make the
argument before you do any investment or any trade or
particularly any options trade. How could you not like first
look at that information, right? Because if you're like, oh I'm
really bearish this company's done.
They're you know they're going to miss It's like, all right.
Well is $92, right? Because if you think it's going
to be much worse than that, the nuts opportunity in the options
market right now. So very much like that, sort of
sports sports betting analogy, is, you need to know what the
options markets pricing before you even like weighed in.
And if you are going to buy that stock and they've got an
earnings coming up or you know, something like that.
It's like well my risk the options Market is pricing my
risk, basically down 8%. Right?
And I should know what that means.
Colonel monetarily to my position.
If that happens, right? And yeah.
So anyway, it's and then what we do on options.
AI is vegan then do those options trades?
Do those, you know, adding income, you know, using them for
leverage, adding protection and you can see that on the chart
and then instantly. See as you drag these things
around on the chart which is essentially your options
positions, you know, what is my risk?
What is my reward? What is the Probability of our
that's cool. It'll adjust accordingly.
Yeah, G-Dragon. That's good.
Yeah. So it's basically taking all of
that intimidation factor from the options chain and making it.
You know, options are basically can be intimidating because you
get into all of this sort of nuanced, right?
But that Nuance is like 10 5 to 10% of options trading.
The other like 90% is really straightforward math.
It is You know, is this stock going to be above or below this
break? Even, you know, in two weeks or
two months or a year? Yeah.
And that's where everybody should start as if they
understand those sorts of breakevens and which side of
that brave. Even in my on they can get to
the Nuance later but that's the core of like an options position
and it just makes my show on the chart basically just explain to
the audience. What's he saying here is that
options at by expiration their binary either winner You lose.
So if you buy a call option let's say it 108 and expires in
two weeks that two weeks from. Now, when that time comes, if
it's above 108 and you own the call you win, if it's below
their you lose more or less - the premium, all that kind of
stuff. So having the ability to
understand that in mind, takes 80 to 90%.
You said of the equation. I like the confusion out of it.
Yeah. And I stayed with a doubtful.
They look at me like I'm crazy sometimes.
I feel like it is not you know people are like oh you were in
options Market. You must be something like math
whiz and I was like I'm not really, it is not it's not a ton
of variables, the core of options, you know.
There are there are some little like nuanced variables that I
think that, you know, only a professional options Trader
could like understand and then you're getting into like second
level Greeks and things like that, but for that's only that's
mostly just important for somebody.
That's professional options, Market maker jobs like that on
Wall Street. You where you have the million
positions for somebody that's looking to go long apple and it
should concern themselves with the basics and right, gross,
they're going to trip themselves up and they're going to make,
you know, bad decisions because they're going to be missing the
forest for the trees. Yeah.
Sorry.
It's almost like trying to learn division before you learn
addition. Subtraction.
It's just a lot of Education. You know, they start with like
the Greeks and things and I'm like, you just wait on that
stuff, you know, like, figure out basic probability.
I love that. So let's talk.
I'm interested in several things.
You've got going on CC, first talk to me about the money maker
options Market maker, not moneymaker, but the market maybe
it's his 40th slip, their the market making activities.
And when you saw it on the exchange, what was that, like
from being there and then now being removed from it?
Do you feel that there's an edge to being there, or is it,
they're not an edge? And how does that work a little
bit can explain what that you're not like and so on and so forth.
So just to sort of Plane that market-making job in general.
So, if somebody goes to like most of your audience, you know,
everybody's probably bought stock and sold stock, and all
when you go to buy shares of apple, or spy, or something like
that, you probably are looking. At the same time you were buying
Apple shares. Someone else is selling Apple
shares, somewhere out there. Right being matched up, right
with options, there are thousands of strikes And, you
know, dozens of expirations. So you can imagine the chances
of you putting in a call by, in apple, you know, twenty dollars
away, two months out and meeting somebody doing that exact same
behavior selling that. At the same time, it's close to
0, right? So, what market makers in
options do is they're generally on the other side of every
single one of your trades. Oh, wow.
Yeah. And so I, you know, there's,
there's, you know, chases like if you're trading like spy, By
and QQQ you know, there's there's a lot more at the money
that week, right? You will your super super
liquid. That's what you mean.
Right, opposed to sons that aren't liquid.
Okay, got you make again, good or your, or your buying and
somebody's already gone in order breast in there, right?
So, but other than that, in general, most of, like, a team,
let's say I'm making up a number.
But let's say, 80% 90% of the you're trading with a market
maker, is what a market maker is doing, is providing the
liquidity in the options Market. That wouldn't be there otherwise
and Way that job works is, you're essentially taking all of
that order flow buying selling and you're reacting in real time
to it because you don't want to be take on a massive position
based upon getting caught sleeping and everybody suddenly
buys a bunch of options from you.
In some biotech company that you didn't even know was about to
have FDA approval on something, right?
Right. Because you're generally not
even following the news and all of these stuff.
Yes. Much too much going on, right?
So and yeah, you see something order from Goldman Sachs and
some biotech stock, you know, something's up, right?
Right. So the so that options marker,
market-maker all day long. As a career is basically trying
to stay as neutral as possible. So you'll hear like delta
neutral options trading because they don't want to be taking big
Market risks overnight. They're also trying to say
somewhat neutral as to their net cells And buys of options, which
is called gamma and Vega and things like that.
And they're basically making their money with either in two
different ways. The more sophisticated and
fancier way of explaining the job would be the they're buying
low volatility and selling High volatility and what they're
doing that is over time as latvala slowly goes low.
They'll be a little bit longer and is it goes higher there'll
be a little bit shorter because it's mean, Hurting really what
they're doing. Is all of those trades intraday
on all of those different strikes.
They're getting tiny different prices based upon their fair
value of those options. So if somebody sells you a 100
call at, you know, one dollar and you have a fair value price
of a dollar five. You're unlikely to then, just be
able to go flip that option, but some other options strike.
Somebody might be paying you 50 cents and you have a fair value
of 45 cents. So that options Market maker has
just created 10 cents of edge now that ten cents of edges and
guaranteed. Because then you've got this
whole thing has to pull it out fast, right.
But it's like that's how they're making money day-to-day got it.
So it's the sophistication of being a traitor.
Get stalked up a lot but really what they're doing is all that
intraday, you know, sorts of things like, we're just creating
Edge every day and then managing their positions to hope.
Hopefully capture as much of that edge by expiration as
possible. So you said there's two ways
they make money. The first is its by vol 1 is low
and sell fall when it's high the second.
Yeah and the second was what was scalped was the difference
between basically scalping Edge, stopping it.
So it's not wears a like somebody making markets in a
stock they can buy buy the stock for $100 and they can sell it at
100 dollars and five cents and that's just that's like
guaranteed money. Yeah.
Options Market maker doesn't have that opportunity that often
right? So they bought something that
they valued at $1 and then sold something that they valued at $1
five room, you know whatever and they've created five cents in
Edge which is the capture by not messing up their positions in
the next three weeks or something.
I love that. So basically what you with
options Not really what you can but most of the time you try to
buy the midpoint or somewhere in between where it's going.
So it's a lot of flexibility with respect to where you get
executed where stock you kind of get filled.
There's a been asking it's really straightforward but with
options is it's more of a new ones.
So that Nuance is where the market maker comes in and that's
their Edge because they can Buy Here, Sell their Buy Here, Sell
their or cell by itself, whatever they want to do.
Is that yes, without getting feel like, I've got a little too
far into the weeds there, but like, there's a great lesson in
what I just said. Yeah, so the options Market are
wider right than Equity, markets, right?
Let's there's less liquidity, there's less retail Traders on
each side of it. Yeah.
So you may see a let's say you saw a call and it was $1 at
$1.39, right? So the midpoint is, you know, a
dollar fifteen, mmm, that one dollar and 130 is what those
market makers are showing, but you're going into a competitive
options Market. Where if Bunch of people have
priced that in their models. Some people might have priced
that that they're willing to pay 115 for that or 110 and so it's
a really good lesson for people that are going to when they get
to the point of actually executed in options trade.
They should price discover in between those bid bids and asks
because there are computers and algorithms at all of these
market-making firms that all you need is you know, you might get
Executed really close to the midpoint of an options thing
sometimes that sometimes you won't, and you really have to
keep going down towards the dead or up towards the offer, but
you've got it, you know? And we do that on options AI.
We try to provide a lot of these, like, sort of nudges
through the platform and that is one of them is our ticket
encourages to cancel, replace cancel and replace until you
find that, you know, that price that liquidity and what we don't
even offer a market buy or sell button.
Our ticket because we came from that side of the business.
You know. That's ya know.
There's yeah within that bit and ask, you know, in general, and
sometimes there isn't but, you know, it depends what your
trade, you know? So I love this.
So basically, you were able to what you're able to now with
options. AI is kind of where I was going
with that. You thank you for diving in deep
there and very helpful for us to understand the market makers
roll. It's really critical but with
options that when you come to get executed, there's a wider
spread and you can hit The bid at the ass but you can go
somewhere the midpoint. So with options AI you have that
tool built in to help the individual.
Investor find a better price than just getting the market
order and buying it outright exactly.
Like Greg, you're not want people to submit its
particularly because we specialize in multi, like
options, spreads or all of those things.
I just talked about compound, right?
When you're doing a oh you know selling a call and buying a call
simultaneously then you've just taken two spreads and You know,
you double the size of the entire spread for your order.
So in that case, you absolutely want to be working that order,
you know, like you started that we, you know, we encourage on
the ticket, it starts at the midpoint and it's a
instantaneous pretty much instantaneous cancel and replace
so you can just sort of walk it down until you find that
liquidity. I love it.
Well, thank you. That's a beautiful, fantastic.
Okay, next question CC for you. Let's dive a little bit deeper
into options. They I can you tell us about the
business? Enos and the value people get
from using it and how it differs competitive advantages, you
know, speak to that a little bit, please.
Yeah. So, you know, we positioned
ourselves, you know, going back to like what I was saying
earlier that most retail options trading is basically being used
as a lottery tickets, and we've actually seen statistics, we
were in an article a couple of months ago and CNBC where, you
know, they mentioned Robin Hood's order flow and I do Don't
mean to pick on Robin Hood or anything but it's the most
retail of retail, you know, great poster child.
Yeah, right. Exactly.
And so 99% of their order flow is single leg options.
And so when I see that somebody, that's an Insider, you know,
sees that statistic, it basically means that most people
are doing YOLO called buying, right?
It'll probably be very low will, you know, guaranteed a very low
probability of profit which means they're looking at A 100
dollar stock and they're saying wouldn't it be amazing if it
went to 125, right? So institutional order flow
looks almost exactly opposite and it looks like the most but
one of my co-founders he came from the institutional options
brokerage side of the business and he's like I never see any
institution to a single leg options order and if they do
it's probably guaranteed against Some big, you know, stock
position from even and they still use spreads right?
And so anyway like you never see that, you know, their mirror
opposites right? And so options AI, it's
basically, you know, in a few clicks I can say, you know, I'm
bullish, bearish neutral or I can create levels on the chart
and options AI is immediately putting a few options trades,
you know, in front of you. Now, some of them are calls and
puts, you know, occasionally you Do just want to do that.
But for the most part, you know, people are singing.
Oh you know, I could do a call spread that in this case in this
stuff that I like and or I could even sell a car that put spread
meaning I'm like taking other side of like you know I'm
basically just positioning the stock does not go lower.
Right right, you know and with with those kinds of Trades, you
see that probability of profit like for instance that credit
put spread might have a 65 percent probability of profit
which makes Sense. Right?
Like the probability of a stock going down. 80 calories is
better than 50%. Right?
If you're buying something for the stock to go higher, you're
going to be less than 50%. You need the stock to move eight
dollars, right? And so those sorts of things and
what ends up happening is when you get those trades in front of
that audience, they immediately clicks and they're like, oh man,
you know? Like now that I see like there
were four different ways to express this view.
I'm going to like Like you know I really like this up another
one and I wouldn't have I would have needed the intent of to do
that trade on another platform. I mean I would have needed to go
to my E-Trade platform or whatever and said, I want to do
a credit put spread and you're out which credit put spread.
I wanted to do it with options, are I?
You've just said, I think you know I'm bullish right.
Like here's one of the options is a credit put spread.
And so what ends up happening is about 80 to 85 percent of our
order flow is multi like Okay. And so that means that we are
the mirror opposite of Robin Hood and our order flow.
Looks a lot more like institutional order flow and
it's kind of hilarious. Because when you're on the
market, making side of things that has a name, and it's called
toxic, right toxic, okay, toxic order flow because you're going
to lose most likely, right? The market market makers were
this, right? Because they think it's smart
money. And what's funny is that If
somebody's doing those sorts of Trades from a retail, brokerage
the market makers, it's very difficult for them to tell the
difference, which right, and look right.
So, you know, a lot of a lot of our Twitter flow and when it
might, it might be a lot smaller, but it's the same
strategies that institutional, you know, hedge funds, mutual
funds, big money, management companies, and things like that.
It's their type of water flow looks like it, which is sort of
funny. So we've always thought about
using that, in branding is like be toxic order flow.
Right? It's like yeah, it's that's
awesome. So basically what you're doing
with options AI is you're helping the retail investor
think and execute orders like the Institutional Investor
almost been the money smart, money kind of parallel.
Take helping people come into the smart money, Circle, part of
the pun there and you're creating smarter orders and
accomplishing the same goal, but just doing it in a more
efficient and smarter ways that correct.
Exactly. And so, you know, we can't
obviously, you know, trading investing this hard, right?
And you take losses and you're wrong.
Wrong and things like that, but what we want to do is like set
people up for the highest probability of success.
And at the same time, we only offer, you know, this is some
another decision that we made is we don't think retail Traders,
should be doing things with unlimited risk, and so, on
options. AI everything is defined risk,
right? So you there are no abilities to
get into a trade and not understand your risk and It's
all defined. It's like this trade.
I understand this. I have a 60% probability of
profit. I'm risking $400, I'm sorry, I'm
risking $600 to make $400 on something that is slightly more
than 50%, you know, chance of happening, right?
And I get that. And what that does, you know, to
your, you know, your area of expertise was like psychology
and all is that we want, you know, all of us as humans are
really bad at decision making especially Specially Under
Pressure, right? And it's a huge thing.
I've always said, it's funny with the title of your book.
I've always said it's like I started a hedge fund.
I would hire like, psychology Majors, not Finance Majors,
right? And so the like, you know that
that the those ways to use options like to add income to a
portfolio, to hedge, a portfolio, like in times like
this, there's that you can sleep at night, not only sleep at
night and make better decisions, but when the Down 30%, you've
set yourself up so that you're a buyer down 30%, not a panic
seller. Right, right.
And those those are the ways that like options should be used
because that's exactly the way that like hedge funds are using
options, right? They're not setting themselves
up for unlimited losses because you can't be that guy that blew
up the hedge fund. Right?
So retail the retail you know investing everyday investor
should be thinking about options the same way.
It's like, how do I, you know, how do I, if you're an active
investor, you goal is to beat the market, right?
Or else, you wouldn't be doing it, or it's just a hobby and
it's fun, right? I think didn't care about these
things. You would just be invested in a
Index Fund, right? You want to wait until you play
the game to win, you're playing the game to win, right?
And so why not play it exactly like the professionals are doing
which is you know, using options not as like wouldn't it be great
if this happened? It's like it's probably not
going to And so let me do it this way, right?
It's again yeah, it's I go ahead.
No, I mean I was going to say it sounds.
I mean, we started around the, I started the 90s and it sounded
like you wrote my book because that's wrong on the outline here
in the book and actually TCL taking a step further, since we
have this psychology thing in common.
See, this is the first Finance book, that I know of at least
that has cartoons in it. So I'll digress for a second.
I've got a dumb money Beast, which is the Tasmanian Evil, an
emotional creature that runs around and then the smart money
superhero. And the whole idea is to help to
bring out the smart money superheroes that you can step
back and make the rational not emotional decisions with your
money and what without a spoiler alert for the book but one of my
most important rules is to respect risk, right?
So always defense first before you enter know where you're
going to exit, how much you going to risk, if you're wrong
and yada yada yada. But I love what you're saying is
this is really powerful. So, to be able to do that with
options and have a platform that's visually friendly.
Is, I mean, that's genius my mind's eye because I don't think
that's ever been done before. Like, is that correct?
Exactly. And it comes from our
experiences and it's, you know, being in a professional, like,
derivatives trading firm the best traders in The Firm where
the guys whose emotions were like that, right?
History line across and they never got to buy in the never
got too low. They were the guys that guys and
gals that played my wife, that's where I met my wife.
They were the You know, they were the types of people, you
know, looking for singles and doubles every single guy singles
and doubles every single day, right?
And you could tell that person that walks into, you know, and
I'm sure this happens at every hedge fund, every big trading
desk at a big bank. And I mean, you could tell the
people that look like they're going to blow up the firm,
right? Yeah.
And they're the types that think they have.
It figured out, see patterns, where there are no patterns, and
don't trust, you know, you that humility, right?
Yeah, it's really important. In investing and trading, right?
Because everyone no matter how good you are at this.
You had a, you had a recent horrible experience, like I'm
sure Warren Buffett than a percent horrible experience in
the last 3 months, right? So investment is probably
tanked. Yeah.
And that kind of, you know, humility is what you need to be
successful over time. And so what we would say with
like options trading is, you know, unfortunately, most
people's entry into the Ian's Market is, it's being sold to
them as a get-rich-quick scheme and it's, it shouldn't be that
way. It should be an overtime
strategy of, you know, there's an options Market that could
potentially add in come to my portfolio.
There's an options Market that could help me sleep at night on
my portfolio. There's an options Market where
if I'm really geeked up on some stock that down, you know, like,
for instance, take like a Shopify or something right now,
it's down like 85% and it's like, whoa.
I'm going to put a bunch of my money in Shopify or do I want to
like take a shot and Shopify. So if I want to take a shot in
Shopify, then there's like, all right.
I can do some defined risk options trade where I get like
this, you know, I get a chance and if I'm wrong I'm wrong.
And I don't like, you know, it doesn't ruin my year, right?
So those sites types of things or the way that people should be
seeing the options Market. I love that.
So earlier today, actually, I was watching TV in the morning
which I don't normally do, but Michael, no regrets was on.
He was talking about crypto. And he had a big tattoo of Luna
and Luna wanted to cryptos at 120 or something like that,
imploded or whatever. Right?
So he the the lady on TV, ask them.
What about the tattoo you regret getting it?
He's like, no, he fired back instantly saying it's a good.
Reminder that you're not always right?
Yes. That you're going to have
losses, you going to be wrong so on and so forth and that speaks
to your point right there, right?
Where you everybody. He's a multi, he's a self-made.
Billionaire that guy. Anyway, took ages, took it on
the chin. So yes so powerful if you Fact
risk and you do that right over time, how you can compound your
wins? I love you too.
So much to do is look down on his arm.
It's, it's right there. It's all right.
Yeah, I love that. So, okay, that's how you handle
risk. Let's talk about the business.
Some Timeless lessons. You've learned along the way.
See, see that you like to share with the audience could be
training lessons, life, lessons, relationship, whatever you want.
Yeah. So, What we were just talking
about is interesting because it can sort of take it one step
further, which is zooming out, right?
And this is one of those like trading lessons that I think
everyone who's like, you sort of actively done it either
professionally or at home, you know, like those times when
you're like, zooming in So Close like on the chart, like from the
last half an hour trying to sleep pattern, you're going to
let us keep going. Yeah, you know, it's like it's
like oh my gosh. Like your flip.
Being a coin, right? Yeah.
And like trying to like predict the market intraday and trying
to predict the stock and all that sort of thing.
And so then when you realize look back at your history when
you zoomed out and solve a big picture, you made such much more
clear decisions, they did they didn't have to be as precise,
right? Like, you know, when you're
zoomed in on a stock chart, if you've got to get the next 20
minutes, right, right? Yeah, 100%.
When you zoom out, you're like, alright, well, the markets, you
know, for instance, the market right.
Now, what was it down 30-some percent last week or two weeks
ago or something like that. I mean, traditionally if I told
me, like, if I woke you up from a coma after year, and I was
like the markets down 30-some percent, would you be bearish or
bullish? Right.
You want to buy cheaper understood?
Yeah. You'd rather write, I mean, not
that, I'm not saying that this is the bottom.
It could be worse or whatever, but it's certainly 30% cheaper
than it was fun of me yet. Value investors we bullish the
technicians with bearish but I get your point.
You're like hey yeah, takes you So when you're zooming out, your
all of a sudden, all right, well now the big picture is I can't
predict what's going to happen over the next two weeks.
But I do know that my longer term, things are now cheaper,
right? Like if I'm thinking about
longer term investments in my shorter term strategy is focused
on the current volatility. Right?
Right. Instantly.
You know, like I should be thinking about like how do I not
get run over in this market? Short-term and how do I have the
bullets to like take advantage of the, you know, something like
this long-term, right? And so that's sort of you Now,
all the sudden informs that zoom in, right?
So by I mean out for use, you know, focused on the what to do
that day. Really.
Yes. So I think that's like a great
lesson. That's something you learn, is
she like your trade is like you realize you're zoomed in 22 to
Lofton, right? Couldn't agree that like I don't
know, there's like a metaphor for Life there, I guess there
is. So again I'm going to I can't
believe the over the parallels here.
So when page 82 my book, I talk about it.
I have a thing you're familiar with Arbitrage right?
Yep. Concept of Arbitrage.
So for those for the audience it's just a discrepancy in price
and let's say gold is really high in Gold stocks are down,
you can sell one by the other and then eventually, I mean
verts and that's that. So I have that in zooming out, I
call it time Arbitrage, I see most people training, they lose
because in looking at the forget the they've see the famous the
forest, they forget, the trees they're looking at the leaves on
the trees because we're looking at a chart of the half hour
chart, even Daily charts most days, just don't matter.
So I call it time Arbitrage where the long-term investors
when because they're able to step back and they don't care
about the 20 minute chart or the one minute chartering that kind
of stuff and they're they're aligning themselves with longer
term uptrend that kind of stuff. So that's a really really
powerful concept. Another option is there's very
specific ways that this plays out and what I was sort of
describing like longer term position in a short term
position in this is We're options market makers, for
instance. Like right now volatility is
high, right? They want to be net short
volatility across their entire portfolio because eventually who
knows when the vix is going to go from 30 back to 15, right, at
some point and 19 is like its historical meeting or something
like that, but you've got to survive for, however, long it
takes for it to do that, right? And so is an options.
So it's an option relatives Trader or, you know, You're not
betting everything on volatility, going back to
nineteen immediately because you were going to get run over in
the meantime. Right.
So in and so there's lessons from that as to like what to be
doing as an investor at all in times like this, which is being
really, really careful and protecting yourself short term
and trying to start to think about the long-term, right?
Got it. Yep, that's it.
I love that. Let's talk about Timeless
mistakes, where some Timeless mistakes, you've seen people
make, or you've made. And you know, how do you avoid?
Boy them who we um you can get more than 18.
Well, mention the phrase earlier like seeing patterns where there
are no patterns. Right.
This is one of those like cognitive biases and I'm sure in
your book. Yep it's an Imodium.
I love those lists with cognitive biases because it is
exactly when you are like Trader, a professional Trader
and every investor should have this as well.
Is you see that you have to recognize the cognitive biases
in yourself and that goes back to what I was saying.
The best Traders, you saw. And that sort of even
temperament with that. Even temperament was hiding was
a lot of that, like, self-reflection and
meta-analysis, and it's like staring at the Luna tattoo.
Yeah, it's sort of like, I, why am I making mistakes?
Like, what am I doing right now? Right now, I feel like the
mistakes. You see, people make is, is
feeling like they've figured it out, right?
I'll keep the other side of it. Okay?
Got it. There's not have it is the
mistake is like seeing those patterns and fit in.
And you know, we used to, you know, options Market, making and
trading. It tends to be a Young Person's
profession and there's a reason for that is, as you get older my
age, you start to like some of those things creep in right?
You you get set in your ways a little bit, you're you're less
some sort of open to the randomness of it, all right?
And when you're young, it's like oh this is just straight math
and probability. As you get older, you're like
Oh, you know I think I've got this kind of figure it out and
then you don't right. Right.
And so that humility and you know stepping back and seeing
the randomness of it all and trying to like think of the big
picture is very important and thinking you have it figured out
again like going back to like a Warren Buffett.
I'm sure he seems like a really, he seems very humble on those
fronts, right? Like he, he probably, he's not
the type of person going out saying, like, I have this all
figured out and I, you know, think it look at all these
great. Investments and everything like
that. He's like, he probably uses
words, like, we got really, you know, we happened to get great
timing on this investment, and we got really lucky and his
investment. So I trust people that use the
word lucky, right? A lot more than like, I crushed
it because I'm so smart. You're so right.
I've interviewed countless people on the show and I'm
fascinated with the smart money. And, you know, you don't get a
six pack by accident. You don't become a billionaire
by accident. You don't join the smart money
Circle by accident, right? There's certain things you do
and then you get the six-pack or Over the you win, right?
So one of the Golden Threads or the pick up a tree, trunk,
you've got different branches, people do different things, your
options and other guy might be stock.
Another guy might be fundamentals technicals and it
all comes back to the trunk of the tree, which is some version
of humility and, or knowing, I don't know, which is what I
said, let me try one job, which is to learn, and I'm content and
doing this. It's a labor of love, I love it.
And once you cross that line of saying, oh, I know, and I'm
great. And then, you know, all that
cubism yada yada kicks in game over.
I mean, it's not one of my favorite movies, I'll digress
for a second but you're there with me because the link back to
the options trading, is from a line from Nicolas Cage in the
movie, Lord of War and he was an arms dealer, interestingly
enough from Ukraine, and in the movie, there's a great scene, he
built himself up and blah blah blah at the very top before the
downfall. He says I suffer the curse of
invincibility right? That was so unbelievably
powerful when the Traders are, you know, Like deal with one of
Traders and investors. Once you start pulling out the
calculator and typing in, how much one am going to make that
trade. Almost always.
It goes right against you at that moment or shortly
thereafter. Exactly.
You saying about humility and
then there's the flip side of the coin is, you know, you want
to be doing that constant meta-analysis.
You want to be questioning, you know everything.
There's a way to go, too far on that to write this.
So you can have like, you can be paralyzed by meta-analysis to
the point where you can no longer.
Commit to something, like an investment, or something like
that. And I've seen this with people
that they're, they're unable to hang on to Winners.
Yes. Or they they're doing something
that is an initial loss or something like that.
And, you know, going back to the zooming out and they're sort of
paralyzed by all of that doubt and those things.
So you have to be humble but confident, I guess it's like the
best way to put it is like it's like you've done your research,
really? Like this stock or you really
like this option strategy and it's been, you know, it's worked
for you, great in the past, like, making decisions like
that, you know, don't start necessarily like overanalyzing
that part. Correct.
Right. And because you can, you know,
I've seen people that like, yeah, like they make investments
and then like a month later, I'm like, how's that thing going?
And I got, man, I gotta sing it with the week, and you're like,
not even a few months that you loved it.
So that's really, really good. Next question for you, what
makes a great leader and I'm going to follow it up with what
makes a great Trader or investor.
So, there's two questions there, I guess maybe three years.
So leaders interesting, because now being in, you know, like
sort of the tech startup World kind of interesting.
I mean, this is the comes at the same time in my life where I
have young children, not so yeah.
With their 10 and 12 and coaching them in sports is
really interesting because I would say, one of the lessons
would like leadership with a company in a small company.
In particular, I guess at a big company would be on on every
level is like, hire smart people and get out of their way, right?
And so, I see this a lot in, you know, coaching, I see so much,
like, over coaching. I was a played lacrosse.
Crossing college and I coach you know like my son's lacrosse team
and I see it you know, sometimes some of the other side lines and
things where it's like the coaches are literally shouting
at the kids like every step of the way what to do.
And like by the time a kid on a field has processed what just
came in audibly from a sideline, like a moment past, right?
And so what you want to do, as a leader and coach or whatever is
to get them to the point where you given them that decision. 18
ability before they've gotten under the field.
So what you should be working on with your leading, a company and
everything. Like that is I want to hire.
I want to find smart people and I want them to I want to trust
their decision-making. So I want to sort of give them
how decisions are made in this company or, you know, this
group, this organization, whatever it is.
And then I want them to when they come to me.
The best people that, you know, I work with.
They come to me with a A question that needs solving and
they already have a solution that they want to pitch me
right? Oh nice and I love it because
I'm like, basically me giving them the okay, Yandy percent of
the time to proceed in the way that they are already thinking
rather than coming to me sort of paralyzed by doubt.
And right, you know, sort of saying, you know, I think we've
run into this problem, you know, what should we do?
Because then what that does is that turns into days and days of
meetings and the more people you bring in In the slower, it goes
and you don't necessarily even get to the better solution.
The best person to make that decision is the person working
on that. Yeah, that's really good.
Yeah. So what about trading and
investing? What makes a great Trader?
An investor. Is it the balance that you
mentioned earlier of knowing thyself, but not overanalyzing.
So now we need to pray. Yeah.
Not to like sort of rehash, that, that sort of that, that
being in between meta-analysis meta analysis, paralysis and
overconfidence in like thinking, you figured it out, that is The
Sweet Spot. You know, you have to figure out
your own personality as well. That's our show A great point is
see different personalities, right?
Particularly professionally and you have to trade and invest
based upon your personality, right?
So I've always been the type that can really kind of like
handle stress and it might have come from sports, right?
Like, you know, like missing the game winning basketball shot,
and then getting over it very quickly.
Yeah, that kind of mentality. Like, served me well in trading,
but you might be trading, right? A person that has that opposite
personality, where the ones like, you know, always thinking
of the risk and what could go wrong at all, which is great
too, because I'm not great at seeing the risk necessarily in
the future, right where somebody else might be better, you know,
like well what if we go into hyperinflation or whatever?
Right, right, well, that never happens and it's like well, what
if it does, right? You know, and so that person's
importance of, they need to figure out their own personality
versus my personality. So my personal Ellie would be
like, oh man, I guess that is this, it's a small chance but I
should be treating that as a Black Swan, right?
That person needs to figure out their own personality me.
Like I'm always worried about the black salon, right, right.
So they need to like adjust their you know sort of paranoia
intercept my optimism. Right.
Because we both probably slightly wrong, right?
Yeah. And so like adjusting your sort
of investing and trading strategy to your own personality
is really huge because then you're going to find out what
your Right. 100%, you know, doing options, you know,
market-making, we see this right on the platform.
Like you can, there's certain people that are just, I'm just
this type of options Trader. I buy stocks and I sell call
spreads against my stock and I do it over and over again, or I
love selling iron Condors. Yeah, you know, in stocks and I
just love to collect that income and I react really well, because
if it's about to go outside, I know to close it.
If it stays inside, I'm really good at keeping it, like you No,
making the most money out of that income trade, right?
Yeah. But that's a very specific
personality, right? And so over then there's the
people that are like, you know, I just love movements, you know.
Stocks are stocks, I like, or down 25%.
I love to get in, and just do like a leverage play for its
bounce 10%. And that's that person's
personality. And so finding like who you are
and what you're good at and then sort of like, you know, you even
see the people like they go back to the stocks that they know.
Right. And there's a danger of like
seeing patterns where there are no patterns, yet the Comfort
level that allows you to surgeon making to be, you know, if I, if
somebody just told me to go trade a stock that I've never
heard of, and I have no clue to the mystery, right?
And not going to be confident and again, and I'm probably
gonna make bad decisions, but if somebody's like, oh, trade apple
and I'm like, I've traded Apple a million times in my life like,
right, you know, I kind of uncomfortable.
I have a good confidence. I would comfort level.
Yeah. I love that.
Actually in the book, I talk about the to find, here's a
strategy, but they all the best traders in the world.
Top, 1% of Traders, they develop their own trading strategies and
they have anyone who wants his in their own way.
Find a way that works for you. Now, I know some of that may be,
it may be very subjective and objective, like it might be
correct that they have the confidence in that.
And so they make clear decisions because I comfort level and I
know you may not believe that they actually found the one
thing, they're really good at they The one thing that they
believe that they're good at and there's nothing wrong with that.
There's very little difference between the two right?
100% agree. Okay, beautiful.
So final question here is what's the best piece of advice?
You'd like to share with the audience?
So I would say, from from an options standpoint, I would keep
going back to, there is a fear of the options market and there
is a misunderstanding of the options market.
And so the misunderstanding of the options Market is the casino
and a lottery and it's a place to get rich quick, right?
So I would love people to sort of You know, disavowal
themselves of that view and then at the same time that other
figure of the options Market, which is they, it is a place
where people can go and, like, lose their house, right?
It is both of those things, but it doesn't need to be, right?
So, I would say like that lesson to, you know, to Circle back
entirely to the platform. Is, we hope that we've built
something that helps people see the options Market in that way?
It's neither a casino nor does it necessarily need to be
something that you don't understand the risk of got it so
well, that was less questions. And I'm going to guess ask
another question, but this is a different take care.
So I love what you said, see see here.
How do people find you get involved?
Use options a i.com. I know you have free tools
there. Can, you know, tell us a little
about the website and what people can do and how they get
involved and open up accounts and I'll as of work.
Yeah. So there's you know, we are
brokerage platform, right? So there's an you can apply to
The Brokerage and you have to like qualify for an account.
It's right now, we only offer options level 3 accounts, which
means that you have enough experience trading and
particularly you've traded some options before that you qualify
to be able to trade multi like options.
And there's a long story that I could go into on the regulatory
aspects of that. That are questionable not
questionable. I see why they the the industry
does it, but it's basically, the problem is that most people's
experience experience in options is the very basic low
probability trades. Because the only thing that
allowed to start with, right? We are there to meet them at
that moment. They're ready to graduate to
that next level of higher probability trading, right?
So you mentioned the free tools, you know, and people can go on
options. Add a common read about Well,
you know, the brokerage and read about the platform and watch
some videos and all and then I also write it at learn options,
a i.com board .ii. And you know, I do some
educational, I stand some weekly previews.
I think I'm learn options on Twitter and so people can sort
of follow me that way with some of the more educational content.
You mentioned the free tools. We offer a couple of free tools
at the moment, like an earnings calendar which shows you the
expected moves and what that stock did its past few.
Things like that. We offer something where you can
see the expected move like just type in a symbol and see the
expected move over time, we are planning on launching, hopefully
by the end of the summer, a subscription version of options
AI, which would essentially allow you to use, you know, all
of the parts of options. A I was like Building Trades.
Seeing trades, comparing, traits traits scanner, all of these
visualizations. And things like that, you know,
even if you didn't want to fully commit yet to a brokerage
product or you're in Canada and you can't anyway you know like
those sorts of right. Right coming down.
That's coming within the next we're actually working on it
right now and that's going to be really cool because it's going
to basically be you know every we're going to be offering what
we feel like is a revolution in this market and a completely
different way to see this Market.
We're going to basically be you know of its To be available to
everyone and then what we were pretty confident that you know
you're going to see options a I then look at your existing
brokerage platform and be like, yeah, I want that.
I want the new one. Hello.
So the more people we get in front of the better, you know?
This is awesome. Well, I love your mission, I
love what you built. And if I could buy calls and
options, they I would, it's fantastic.
I wouldn't buy single like calls because now they know my calls
or any other key, exactly, but Your Twitter's options with an S
learn at options. Learned just to be clear is that
you learn actions, learn options you want to check because I did
you. I just want to double check
before just solid you. Yeah.
So it's options learned. That's why I'm asking I followed
you back. Yeah.
It's a table to know my own Twitter feed.
It's okay at options. Yeah it's options.
Learn so at sign and then options with an S and them
learn. Yeah.
Wonderful. We'll see.
See, thank you so much for coming on the show and
hopefully, we'll see. See you again soon.
This is awesome. Excellent.
Great to meet, you had to hang up.
Likewise See you again soon. This is awesome.
Excellent. Great to meet, you had to hang
up. Likewise