May 2, 2024 • 37 mins
What do volatility, options skew, and the great state of Kansas all have in common? They are all featured in the newest podcast from OIC’s WWoO. Tune in to this two-part episode as host Mark Benzaquen welcomes fellow OIC instructor Ken Keating to discuss all things volatility – including historical and implied volatility, volatility metrics and options skew, followed up by a conversation with Jay Soloff, the Lead Options Analyst of Magnifi as he talks the value of education and how a boy from Kansas rose through the ranks of options trading.
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Now here's your host, Mark Benzoquin.
Hello everyone and welcome to another episode of OIC's Wide World of Options.
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I'm your host, Mark Benzoquin, and once again today's episode is going to be a two-parter.
First we're going to welcome my friend, colleague and fellow OIC instructor Ken Keating, as
he's going to build on last month's talk about probability and standard deviation by
taking a closer look at various volatility metrics and the concepts of option skew.
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And then for the second half, we'll listen in on a recent conversation I had with Jay
Soloff, lead options analyst at Magnify, where we discussed how a boy from Kansas made his
way up the options ladder and insight that he gained along the way.
So that being said, let's kick things off by welcoming my first guest, OIC colleague,
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fellow instructor here, Ken Keating.
Ken, thanks so much for joining me.
Welcome back to the Wide World of Options.
Thanks Mark, it's always good to be here.
Ken, as you know, our colleague Matt was on last month and gave us an introduction to
options probability and the concepts of standard deviation, tail risk, etc. and that laid the
groundwork for what you're going to be presenting this month at OIC, namely volatility and volatility
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metrics amongst other concepts.
So let's start with volatility, what is it and why does it matter to investors?
So simply put, volatility, our measuring volatility, it's fluctuations in underlying stock prices.
So historical volatility is a backward looking metric that measures how volatile a stock
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has been in the past.
So it's kind of like looking at an electrocardiogram for your stock, okay, just like an electrocardiogram
or an EKG would measure your heartbeat.
So volatility measures how volatile your stock has been over a period of time in the past.
So it's a backward looking metric.
Implied volatility on the other hand is a forward looking metric and it's trying to,
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it's anticipating how volatile that stock will be between now and its expiration and
it's doing it through the pricing and the options.
So, historical volatility, rear view mirror look, where the stock has been, but it doesn't
tell us anything about the future.
Implied volatility is kind of the market's future prediction of how volatile the stock
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may be going forward based on the options price.
Correct.
So where historical volatility is backward looking doesn't tell you if the stock is going
to continue to be volatile in the future, if it's not going to be volatile in the future,
it's just telling you what it's done in the past.
Implied volatility is on the other hand forward looking.
It's giving you an idea of how volatile the market's anticipating that stock to be.
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Now that doesn't mean just because implied volatility is high that that stock is going
to be volatile.
It's just what the market is pricing.
So it could be volatile, it could be not so volatile.
So it really just depends.
There's no guarantees, obviously.
It's just what the market's pricing at that given time.
Right.
And when we talk about volatility, implied volatility forward looking, we're not saying
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the stock is going to go up.
Implied volatility isn't saying the stock is going to go down.
So it's not a predictor of direction.
It's just a predictor or a theoretical probability, I guess, of anticipated price movement.
Exactly.
It's not directionally biased whatsoever.
Right.
So is there a price movement up, down, or intraday, up and down?
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Right.
And so when it comes to pricing, a lot of the pricing concepts, the pricing inputs that
go into a model are observable.
We know what the stock price is.
We know our strike price.
We know the day's till expiration.
We know what interest rates, whether or not any dividends are involved.
So all of those are quantifiable.
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They're visible.
Implied volatility isn't.
Implied volatility is something that the market comes up with to justify an option's price.
Right.
So where we can see some of those inputs, the unquantifiable input is implied volatility.
Correct.
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So implied volatility is always the wild card, and it's what option traders are always trying
to solve for.
And it's really based on the supply and the demand for options at any given time.
So just like basic economics, when there's greater demand than supply, prices tend to
go up.
We've all experienced this when you walk in the grocery store these days, and two bags
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of groceries cost you 150 bucks.
So no different than options.
So when there's more demand than supply, prices go up.
So when prices go up, implied volatility naturally goes up.
So when traders speak about implied volatility, all they're really talking about are the level
of options prices.
So when they say implied volatility is high, what they're inferring is that option prices
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are high or elevated.
And when implied volatility is low, when there's more sellers than buyers of options, implied
volatility tends to drift lower, and it's anticipating that price movement is going
to be less.
So it doesn't mean it's guaranteed to be less or high.
It's what the market is expecting at any given time, and it's always fluctuating.
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It's never static.
It's always constantly moving based on the supply and the demand for options.
Gotcha.
And I want to come back to that in a second.
But when you were on the trading floor, you weren't trading calls and puts.
You weren't trading a $3 option.
You were trading volatility, right?
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As a market maker, that's what you were most concerned with.
Where are you running your vols?
This $3 put, what vol are you running for?
That's what you guys were really looking at now.
Right?
So it's a way that traders can communicate about options prices.
So when I'm in a pit standing with my colleagues and we're talking about trades that we did,
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we never say, well, I bought this straddle for $5.
I always say I bought the straddle for a 32 vol, because that's how you can describe where
the option level is, whether it's low or high.
And where I bought a 32 vol and I sold a 65 against it, something like that.
Gotcha.
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Yeah.
Right.
So trading volatility as opposed to trading dollars and cents.
Exactly.
Yeah, I get that.
It's keeping with implied volatility.
We're talking about when there's a lot of demand, maybe that demand for options obviously
leads to competition.
Options and sellers that drives prices up naturally.
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Are there periods in the market traditionally where volatility may be elevated over the
life of an option versus others?
Earnings, for example.
Absolutely.
So typically going into earnings, the market's trying to price an unknown event, right?
Everyone's, the earnings are going to come out on a certain date and nobody knows what
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that number is.
It could be good, it could be bad, it could be just, you know.
Right.
Indifferent.
So the market through the pricing and the options tends to try and forecast how volatile
stock will be.
Now, typically most stocks move into earnings.
Doesn't always happen.
But that's why you'll naturally see implied volatility increase as you get closer and
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closer to the earnings date.
So it, you know, once again, the market is trying to forecast how volatile the stock
will be.
So when you're looking at, when the pundits on TV talk about, oh, XYZ, it's expected to
make a 5% move.
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It's implied 5% move for earnings.
Okay.
That's just saying that typically the at the money straddle is pricing in a 5% move.
So it's a hundred dollar stock.
Maybe the at the money straddle is trading for five bucks with a couple days to go.
So that's what they're doing.
They're, they're, they're taking the at the money straddle and coming up with an expected
price movement.
That doesn't mean that that stock is going to move 5%.
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It could be moving more than 5%.
It could move less than 5%.
And you know, and once again, we won't know until the earnings comes out, but the market
is pricing a 5% move.
Right.
And then once those earnings come out, once the unknown becomes known, now there may be
a new expected level of volatility or that inflated volatility level may drop back down
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to, you know, closer to where it was before revert to the mean is
exactly, you know, the concept that we have.
And that's implied volatility crush, right?
Now that the unknown is known, there's no longer that expectation of what might happen
because now we know what actually did happen.
How does that affect?
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How does that affect volatility?
So now that the earnings comes out, what was once an unknown event is known.
There's no reason for those options to trade at such a high level.
So the market re prices everything.
And that's when you see this natural wall crush and typically prices will gravitate
back to where they naturally have been before the earnings.
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Okay.
So, but once again, it really gets down to the idea of supply and demand.
Right.
If all of a sudden earnings comes out and a stock makes a big move down, and I've seen
this and you think, well, you know, here comes the ball crush.
Sometimes vol pops because traders are thinking, Oh my God, the stock missed earnings.
It moved.
The market was expecting a 5% move.
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It went down 20%.
Now there's a lot of fear in the market.
And like what else would next you could drop, right?
So sometimes volatility increases after earnings.
Typically it does decrease after earnings.
There's a ball crush, but there's no guarantee that there's going to be a ball crush.
Sometimes volatility does pop depending on what the stock does post earnings.
So yeah, right.
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Good point.
Let me ask you this.
There's often talk of expensive versus cheap options.
And when we talk about expenses versus cheap, we're not talking about a, the cost of a $10
premium on a call option versus a $2 premium on a call option.
We're talking volatility and it's almost the analogy that I like to use is, you know, housing,
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for example, you've got, you see a listing for a half a million dollar house, 2,500 square
feet, three bedroom, two and a half bath, what have you.
You really don't know if that $500,000 house, is it expensive or is it cheap?
You know, you can't tell just by that number.
You need other factors in terms of where's the location.
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You know, if it's located in a high cost of living area, that house might be cheap.
If it's a low cost of living area, that might be expensive.
What are the comparable sales, you know, nearby, all of those things go into whether or not
that home is priced appropriately.
Volatility is, you know, the higher the level of volatility, the more expensive it's going
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to be, but you need to know where that volatility is in relation to other things.
And that's where these metrics come in that you're going to be talking about, IV rank
and IV percentile.
What can you tell us about those?
So once again, when you're trading implied volatility, you really want to know what levels
that you're buying or selling.
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And just like anything, you want to buy low sell high.
You don't, the last thing you want to do is buy expensive options.
You get your forecast, right?
The stock goes up and you still lose money, right?
You want to be aware and the way you, you, you measure how high or low option prices
are, are through looking at implied volatility charts.
But there are two metrics that many brokers do offer and they are called implied volatility
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percentile and implied volatility.
Rick, right?
Yeah.
Yeah.
IVR and IV.
Right.
And those give us a measure of where current volatility is related to past volatility.
So it lets us know if, you know, if the stock's been trading at, if the option I should say
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has been trading at a 20 vol and now it's an 80 vol, that might be considered, that
current volatility level might be considered expensive and therefore it might be a selling
opportunity.
If the investor thinks that it's going to drop back down to the normal 20.
Right.
As of all, as somewhat mean reverting, typically over time when implied volatility is low,
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it tends to gravitate higher.
And when implied volatility is high, it tends to gravitate lower.
Now, you know, depending on what time period you're looking at, you'll look at, so this
is what I did when I was a market maker.
I mean, looking at implied volatility levels and charts for the issues that I was trading
and I would come up with a buy sell range.
Okay.
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So just for an example, maybe over a two year period, you're looking at implied volatility
chart and the low implied volatility is 20 and the high implied volatility is 60.
Okay.
So I would, my buy sell range would be in my mind, you know, when vol gets in the low
20s, I'm more of a buyer.
And when it gets in the high 60s or high 50s, 60s, I'm more of a seller.
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That doesn't mean I'm going to make money, but over time, as well as mean reverting,
over time, that should work out.
Right?
Because volatility is mean reverting.
So implied, implied volatility ranking is taking those two points.
It's taking the low point and the high point and comparing where implied volatility is
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right now.
So let's just say the implied volatility, low point is 20, the high point is 60.
And right now implied volatility is trading 40.
It's right at the midpoint of its high and low range.
So we would say that's trading at the 50th percentile.
It's right in the middle.
Okay.
So it's basically taking three points, the low point, the high point, and telling you
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as a percentage where implied volatility is now.
That's IV rank.
IV rank.
Okay.
The two I always get confused.
I know.
I know.
They're very similar, but they're also kind of different.
So an IV ranking of zero would mean that the current level of implied volatility is
the lowest point of the given time period.
Okay.
So the implied volatility rank of 100% would tell you that it's trading at the highest
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level of its given period.
So if we had in your scenario the low point of 20, the high point of 60, current IV is
40, right in the middle, that's going to have an IV rank of 50.
50%.
Right.
It's trading at the 50th percentile of its whatever time period we're looking at.
Now IV percentile kind of tells you the same thing, but in a different way.
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Instead of taking three points, the low point, the high point, and where it is now, it takes
all the given points over a given time period, and it tells you how often the implied volatility
has been below that certain level.
So if you have an IV percentile of say 80, okay, that's telling you that 80% of the time
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implied volatility has been lower than where it is currently.
So it's just another way of measuring and telling you that implied volatility at this
point is high or elevated.
Now that doesn't mean you're going to make money by selling high implied volatility,
but it's giving you an idea that option prices are expensive and it will dictate what strategies
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you want to incorporate depending on your forecast of bullish, bearish, or neutral.
So I can tell you personally, I remember trading, and you were on the floor at the same time
I was, during the whole internet.
You know, crazy, crazy.
And implied volatility was very elevated, but it was really hard to make money selling
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implied volatility because the actual stocks, the historical volatility was moving higher
than the implied.
So even though if you had sold very expensive options back then, it was very hard to make
money doing it because the stocks were moving around too much.
So your intraday hedging of your position ended up costing you money.
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So back in that weird period, people actually made money being long high implied volatility
rather than shorting.
And you know, there's a time and a place.
Sometimes the model breaks down depending on where we are, what's going on economically
or politically or whatever.
But there are periods when implied volatility stays elevated for long periods of time and
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also when implied volatility stays depressed for long periods of time.
So after the internet bubble popped in 2001, the next two or three years, vol was just
really low and it was very hard.
Everything was very inexpensive, but it was hard to make money being long volatility,
even though, you know, because vol is low, you think, well, I just want to be long volatility
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here.
It's hard to make money being long volatility for this given period of time.
So you know, there are no guarantees, but.
It's an imperfect science, but it's definitely concepts for worth investors knowing.
Okay, excellent.
Ken, excellent information.
Certainly thank you for sharing that with us today.
And for listeners interested in attending Ken's upcoming May webinars, I encourage you
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to do so via the events section on our website, optionseducation.org, where you can register
for Ken's two upcoming May events.
And not only is he going to expound on what he shared with us today, but he's also going
to talk about more advanced concepts, a deeper dive into volatility skew and relative value
among many others.
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Ken, really, thank you so much for joining us today.
Really, really enjoyed it.
Well, thank you for having me, Mark.
It's always a pleasure to be here.
And now, ladies and gentlemen, we're going to shift gears.
We're going to transition and listen into a conversation that I recently had with Jay
Soloff, lead options analyst at Magnify.
Jay's been a friend of ours at OIC for years, and I recently caught up with him on the road
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where we talked about the evolution of options trading and the value of education in the
options space.
So let's go ahead and take a few minutes and listen in now.
All right, everybody, we are coming at you live from the floor of the Money Show Las
Vegas Traders Expo, and we're very, very fortunate and honestly very excited to have one of OIC's
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good friends with us, Jay Soloff, lead options analyst for Magnify.
Jay, thank you so much for stopping by.
Thanks for having me.
Oh, Jay, thank you.
Let me ask you, so I know that you had a presentation.
I believe it was evolution of options, talking about that.
Why don't you tell us a little bit about what that presentation entailed and how you felt
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about it?
Yeah, of course, and it's nice to get in front of people.
I do tons of webinars, but there's something different about having a live audience.
The live audience, right.
You can feed off that energy, yeah.
So evolution of options trading is kind of my history lesson on how options developed.
I'm super interested in a lot of investment history type stuff, and of course options
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being an ex-market maker, that's really been my career, has been centered around options.
So what I usually do is I talk about how different events in the past have changed how options
are priced today, and I think it's important for people to be able to understand the reason
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options are priced the way they are.
There's enough challenges to become a good trader as there is, so understanding a little
bit about the theory behind it without getting too deep into the math.
You don't need to know how to calculate black shoals to be a good options trader, but it's
kind of nice to understand how volatility sort of developed the way it is, and I think
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it just helps people put perspective around their trading.
Okay, now you had mentioned how pricing has evolved over the years, over the decades,
for example.
What is an example of that?
How do you feel that pricing has evolved?
How is pricing different today than it was, say, 20 years ago?
Yeah, and that's like the ultimate question, right?
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And a lot of that is based around these major events that have occurred.
So for instance, the financial crisis of 2008, 2009, the Lehman moment, where suddenly you
have these tail options, these really far out of the money options that should be worth
zero in theory, but they're now suddenly trading at 20 cents, right?
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And 20 cents is not a big number at all, but if you think about it, it takes a six standard
deviation move to get there.
Why are people actually paying for those things?
Well, because we had these events occurred that were never supposed to happen, so now
these things have value and they never had value before.
That's an example I like to use.
So in what you're talking about, tail arrest, that's where skew comes in, yeah?
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Absolutely, yeah.
Okay.
So I try not to get too deep into skew because I think if you're not that familiar with options,
then it starts to sound confusing.
But ultimately, yes, what we're talking about is skew and the tail skew and put skew and
to some extent call skew now after things like GameStop, but went from 20 to 500, now
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you have these stocks that have call skew.
And so I try to bring that in.
I try to keep the language not too filled with lingo, but that's generally what I'm
talking about.
Okay.
And good turnout, you had said.
Good engagement, good questions from people.
Definitely.
Yeah, excellent.
And I completely agree with you.
Speaking live to a physically present audience versus talking to an audience only on the
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internet, it's a completely different presentation style, completely different energy in the
room.
Yeah, I absolutely love it.
All right, let's shift gears, Jay, for a second.
So you've been in the business for a long time.
I know that you got started in Kansas City, the board of trade out there.
How did you end up here in Vegas?
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Well, obviously it wasn't a direct line, right?
Yeah, that's, you know, there are several twists and turns along the way.
But so I'm from Kansas City, so I started, my degree was from University of Illinois
and I had a degree in economics.
So I started in the wheat pit, actually working for the exchange in Kansas City.
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But I really wanted to learn options and options were not big on the Kansas City floor, it
was mostly a futures exchange.
And so the people down there were like, you want to learn options, you need to go to Chicago.
I'm like, well, that makes perfect sense for me because I went to University of Illinois,
I have a lot of friends up there anyways.
So I went up, basically handed out my resume on the floor and I knew someone who got me
down the floor handed out resumes and in an index trading company, SBX traders, they needed
(26:05):
a clerk, they hired me.
It was, yeah, I mean, just good timing, right?
Like, as you never know who's going to be hiring clerks and it's generally a lot of
knocking on doors, at least back then.
So yeah, so I worked with them and I learned, besides all the regular clerking stuff, just
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not only all about options, but all about volatility and trading volatility.
Eventually I got on a seat in, by then we had moved into single stock.
So I was in the Amazon WorldCom, what else was in there?
Global Marine, National Semiconductor, a bunch of companies that have since been either are
gone or merged, but Amazon was the big one.
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And did that until the dotcom boom ended and trading kind of dried up.
And at that time I happened to be recruited by this software company that was doing market
making software right when the exchanges were going digital, right?
Going electronic.
So it seemed like a good time to get involved with that.
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So that took me to New York, to Wall Street for a little bit.
I was working with JP Morgan and some of these banks off the floor.
They were basically adopting our software.
The company was acting.
We ended up being a good stopgap while companies were developing their internal software.
So for a while we were super busy.
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So I was back and forth from New York to Chicago.
So anyway, so fast forward.
So at that point I'm like, all right, if I'm going to be in this world and not as a trader,
I kind of want to get my MBA.
It was just kind of random thing that I decided I wanted to do.
I wanted to get away from winters.
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So I applied to Arizona State because it was a decent MBA school in the warmest temperature
I could find.
Right.
And, you know, I got in and they flew me out.
I'm like, I have to go here.
So I came down to Arizona State thinking this was just going to be a temporary thing.
And I was going to go back into either trading or software business or whatever.
But I ended up meeting my wife at Arizona State and she's from Arizona.
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So I decided to stay and that was really the, so this is where we get into the part where
I ended up in Vegas, right?
I couldn't do what I knew how to do in Phoenix, right?
This was way before remote working.
So I couldn't trade options.
I couldn't work for an option software company.
I couldn't do anything that I had a background in.
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So I fumbled around for quite a while until I finally got into the financial publishing
industry, which now I've been in for 14 years where I got to basically talk about options
in either newsletter and eventually webinar format, you know, trading services.
And my focus has always been mostly on education just because of my background.
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But yeah, I managed to just be a good fit.
I ended up being good at it.
I didn't know I would be good at presenting or good at writing or any of that stuff.
But I learned and I've really never left that industry.
And so the company, so Magnify, well, now we were since bought by Magnify, which is AI
(29:21):
assisted investing, which is, it's a cool product, you know, where you could basically
ask to link your accounts and can have AI analyze your accounts.
So, you know, they, but before that, investors, Ali was the company and we always, they would
always send their people to the money show and here in Orlando and just to talk about
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our products and talk about options or dividend trading or whatever we have.
And so I just got, so I've been doing this now for like six years.
Well, you like to meet people that are in the space that, you know, you're interested
in.
Exactly.
Exactly.
Wonderful.
I never saw my products here at all.
Like I just come to talk to people, see what people are interested in.
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I've had five subscribers just randomly come up to me and say, I love your stuff.
You know, so it's just a great, you know, it's just good to meet people.
Absolutely.
And so that that's a long winded way of getting here.
I like it.
I like it.
I didn't know about the Arizona state.
So yeah, that's interesting.
Go Sun Devils, right?
So let me ask you this circle back to your SIBO days, Chicago Board of Options Exchange.
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Yeah.
A question that I like to ask people that come on the show because I remember it so
vividly.
What was your first impression when you went on the trading floor?
Was it, I know for me, I was thinking, boy, I can't believe something like this exists.
It was a zoo meets a high school boys locker room meets a, I don't know, an anarchy circus,
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for lack of a better word.
What were your first impressions?
What did you think about the floor?
So at least in that, the exchange, not the, obviously not the new one now, but the old
one you would, one of the ways in, you would come down that escalator.
Down the escalator from the members lounge, right?
So the first time I did that, you go down and all of a sudden this floor opens up and
(31:26):
a giant space, this huge space, but what I think what maybe struck me besides all the
people running around, right?
Like you said, and the different colors and all that, I mean the technology, right?
It looked like a control room for like a NASA, right?
You just had monitors and machines everywhere and you just see all this.
I'm like, this is insane.
(31:46):
How is all this technology and all these people all in this one massive space?
How does anybody make sense of this?
So it was pretty overwhelming, but you quickly, it's exciting.
Incredibly exciting, yeah.
Yeah, so it's not, it's overwhelming in this, but you also like, all right, I want to figure
this out, right?
So it's not overwhelming in a bad way.
(32:06):
It's overwhelming and like, oh, this is going to be awesome.
Right, right.
Which it was.
It was, yeah, we definitely enjoyed being on the floor back in the day.
Thankfully I grew out of it.
Yes.
Yeah.
All right, Jay, let's go ahead and finish things up.
I like to do from time to time, try to catch people off their toes, do a lightning round,
(32:31):
and I know that you spent some time in Chicago.
Not a true Chicagoan from what I understand or from what I know, but certainly you've
been around long enough to understand the Chicago way.
As Sean Connery put it back in, what, the Untouchables?
But anyways, lightning round here, Chicago-centric, let me ask you.
(32:52):
All right.
Willis Tower or Sears Tower?
Always Sears Tower.
Thank goodness for that.
That is the correct answer, by the way.
Next question, when it comes to pizza, deep dish or thin crust?
I was always a big Giordano's deep dish fan.
Yeah, I love it.
I kind of liken it to tourists, like Times Square is the saying is that Times Square is
(33:16):
for tourists, Chicago deep dish pizza kind of the same way, but that being said, it is
delicious.
Yeah.
I do appreciate that.
So there really is no correct answer with that one.
So, so far you're scoring pretty well.
Sports teams, Bulls, Bears, Sox, or Cubs, or Blackhawks?
At least when I was there, I went to many Cubs games.
(33:39):
A lot of my friends from University of Illinois were Cubs fans.
So I definitely, and they're not in the same division as the Royals for home teams.
So I have to go with Cubs.
And the Kansas City didn't have a pro basketball team either, so I never had any issues with
the Bulls or Yankees.
Yeah, and actually I worked for Black Hawk Financial, so we had season tickets to the
(34:03):
Black Hawk.
Oh, that's great.
That was fun too.
So I really, anything that did.
All right, so, so Cubs and, Cubs and Blackhawks.
Cubs and Blackhawks.
All right.
That also is the correct answer.
Yeah.
Well done.
Let's see, Chicago centric, catch up on a hot dog.
I am a little wiffle offy on that.
Mustard, mustard only.
Yeah.
(34:23):
Okay.
So let's see, one more.
Well, let me ask you this, favorite Chicago memory, like where's a place that, you know,
if you had outer town guests come in, where would you normally take them?
Be a nice restaurant.
What's your favorite restaurant in Chicago?
Can I say series?
Well, I don't, do they serve food other than alcohol?
(34:45):
They had, I would go for breakfast sometimes.
Yeah.
So if you just wanted to like an ice omelet and.
Right.
Yeah.
Before the trading day series was a place to go.
Yeah.
Excellent.
Well, Jay, I got to tell you, you did pretty well in the lightning round.
Most of your questions or most of the answers were correct.
So well done.
You should be pretty proud of yourself on that.
(35:07):
I really appreciate you stopping by.
Thank you so much.
Thanks for having me.
I really appreciate it.
This was a lot of fun.
Let's do it again sometime.
Absolutely.
All right, Jay.
Enjoy the rest of your time here at Money Show.
I know you've got another great event coming up.
So best of luck with that.
Thank you.
All right, Jay.
Thank you.
You've been listening to the Options Industry Council's wide world of options.
(35:28):
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(35:48):
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(36:13):
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(36:39):
Don't forget to follow along with your favorite programs and submit your own questions for
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You're listening to the Options Insider Radio Network, the home of the Options Podcast.
For more quality options programs, visit theoptionsinsider.com or search for Options Insider Radio Network
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Listeners can also access all of our programming through our mobile app available on the iTunes
(00:22):
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Options programs are also available via livestream at mixler.com/options-insider.
That's mixlr.com/options-insider.
Don't forget to follow along with your favorite programs and submit your own questions for
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(00:52):
at theoptionsinsider.com.
This is the Options Industry Council's Wide World of Options.
Before we start today's show, listeners should know that options involve risk and are not
suitable for all investors.
(01:13):
Individuals should not enter into an options transaction until they have read and understood
the disclosure document, characteristics and risks of standardized options, available by
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or the Options Clearing Corporation at 125 South Franklin Street, No. 1200, Chicago,
(01:34):
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The Options Industry Council is an industry resource provided by the Options Clearing
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These strategies discussed are strictly for illustrative and educational purposes only,
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Commissions, fees, margins, interest and taxes have not been included in any of the examples
(01:57):
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These costs impact the outcome of all stock and options transactions.
Consult your tax advisor about any potential consequences.
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(02:18):
one of several resources investors can utilize to learn more about options.
Other resources OIC offers include webinars, articles and self-guided options related coursework.
For more information, check out www.optionseducation.org.
Now here's your host, Mark Benzoquin.
Hello everyone and welcome to another episode of OIC's Wide World of Options.
(02:49):
I'm your host, Mark Benzoquin, and once again today's episode is going to be a two-parter.
First we're going to welcome my friend, colleague and fellow OIC instructor Ken Keating, as
he's going to build on last month's talk about probability and standard deviation by
taking a closer look at various volatility metrics and the concepts of option skew.
(03:13):
And then for the second half, we'll listen in on a recent conversation I had with Jay
Soloff, lead options analyst at Magnify, where we discussed how a boy from Kansas made his
way up the options ladder and insight that he gained along the way.
So that being said, let's kick things off by welcoming my first guest, OIC colleague,
(03:34):
fellow instructor here, Ken Keating.
Ken, thanks so much for joining me.
Welcome back to the Wide World of Options.
Thanks Mark, it's always good to be here.
Ken, as you know, our colleague Matt was on last month and gave us an introduction to
options probability and the concepts of standard deviation, tail risk, etc. and that laid the
groundwork for what you're going to be presenting this month at OIC, namely volatility and volatility
(04:00):
metrics amongst other concepts.
So let's start with volatility, what is it and why does it matter to investors?
So simply put, volatility, our measuring volatility, it's fluctuations in underlying stock prices.
So historical volatility is a backward looking metric that measures how volatile a stock
(04:21):
has been in the past.
So it's kind of like looking at an electrocardiogram for your stock, okay, just like an electrocardiogram
or an EKG would measure your heartbeat.
So volatility measures how volatile your stock has been over a period of time in the past.
So it's a backward looking metric.
Implied volatility on the other hand is a forward looking metric and it's trying to,
(04:46):
it's anticipating how volatile that stock will be between now and its expiration and
it's doing it through the pricing and the options.
So, historical volatility, rear view mirror look, where the stock has been, but it doesn't
tell us anything about the future.
Implied volatility is kind of the market's future prediction of how volatile the stock
(05:11):
may be going forward based on the options price.
Correct.
So where historical volatility is backward looking doesn't tell you if the stock is going
to continue to be volatile in the future, if it's not going to be volatile in the future,
it's just telling you what it's done in the past.
Implied volatility is on the other hand forward looking.
It's giving you an idea of how volatile the market's anticipating that stock to be.
(05:35):
Now that doesn't mean just because implied volatility is high that that stock is going
to be volatile.
It's just what the market is pricing.
So it could be volatile, it could be not so volatile.
So it really just depends.
There's no guarantees, obviously.
It's just what the market's pricing at that given time.
Right.
And when we talk about volatility, implied volatility forward looking, we're not saying
(05:59):
the stock is going to go up.
Implied volatility isn't saying the stock is going to go down.
So it's not a predictor of direction.
It's just a predictor or a theoretical probability, I guess, of anticipated price movement.
Exactly.
It's not directionally biased whatsoever.
Right.
So is there a price movement up, down, or intraday, up and down?
(06:23):
Right.
And so when it comes to pricing, a lot of the pricing concepts, the pricing inputs that
go into a model are observable.
We know what the stock price is.
We know our strike price.
We know the day's till expiration.
We know what interest rates, whether or not any dividends are involved.
So all of those are quantifiable.
(06:44):
They're visible.
Implied volatility isn't.
Implied volatility is something that the market comes up with to justify an option's price.
Right.
So where we can see some of those inputs, the unquantifiable input is implied volatility.
Correct.
(07:04):
So implied volatility is always the wild card, and it's what option traders are always trying
to solve for.
And it's really based on the supply and the demand for options at any given time.
So just like basic economics, when there's greater demand than supply, prices tend to
go up.
We've all experienced this when you walk in the grocery store these days, and two bags
(07:26):
of groceries cost you 150 bucks.
So no different than options.
So when there's more demand than supply, prices go up.
So when prices go up, implied volatility naturally goes up.
So when traders speak about implied volatility, all they're really talking about are the level
of options prices.
So when they say implied volatility is high, what they're inferring is that option prices
(07:48):
are high or elevated.
And when implied volatility is low, when there's more sellers than buyers of options, implied
volatility tends to drift lower, and it's anticipating that price movement is going
to be less.
So it doesn't mean it's guaranteed to be less or high.
It's what the market is expecting at any given time, and it's always fluctuating.
(08:10):
It's never static.
It's always constantly moving based on the supply and the demand for options.
Gotcha.
And I want to come back to that in a second.
But when you were on the trading floor, you weren't trading calls and puts.
You weren't trading a $3 option.
You were trading volatility, right?
(08:30):
As a market maker, that's what you were most concerned with.
Where are you running your vols?
This $3 put, what vol are you running for?
That's what you guys were really looking at now.
Right?
So it's a way that traders can communicate about options prices.
So when I'm in a pit standing with my colleagues and we're talking about trades that we did,
(08:52):
we never say, well, I bought this straddle for $5.
I always say I bought the straddle for a 32 vol, because that's how you can describe where
the option level is, whether it's low or high.
And where I bought a 32 vol and I sold a 65 against it, something like that.
Gotcha.
(09:13):
Yeah.
Right.
So trading volatility as opposed to trading dollars and cents.
Exactly.
Yeah, I get that.
It's keeping with implied volatility.
We're talking about when there's a lot of demand, maybe that demand for options obviously
leads to competition.
Options and sellers that drives prices up naturally.
(09:35):
Are there periods in the market traditionally where volatility may be elevated over the
life of an option versus others?
Earnings, for example.
Absolutely.
So typically going into earnings, the market's trying to price an unknown event, right?
Everyone's, the earnings are going to come out on a certain date and nobody knows what
(09:56):
that number is.
It could be good, it could be bad, it could be just, you know.
Right.
Indifferent.
So the market through the pricing and the options tends to try and forecast how volatile
stock will be.
Now, typically most stocks move into earnings.
Doesn't always happen.
But that's why you'll naturally see implied volatility increase as you get closer and
(10:20):
closer to the earnings date.
So it, you know, once again, the market is trying to forecast how volatile the stock
will be.
So when you're looking at, when the pundits on TV talk about, oh, XYZ, it's expected to
make a 5% move.
(10:40):
It's implied 5% move for earnings.
Okay.
That's just saying that typically the at the money straddle is pricing in a 5% move.
So it's a hundred dollar stock.
Maybe the at the money straddle is trading for five bucks with a couple days to go.
So that's what they're doing.
They're, they're, they're taking the at the money straddle and coming up with an expected
price movement.
That doesn't mean that that stock is going to move 5%.
(11:02):
It could be moving more than 5%.
It could move less than 5%.
And you know, and once again, we won't know until the earnings comes out, but the market
is pricing a 5% move.
Right.
And then once those earnings come out, once the unknown becomes known, now there may be
a new expected level of volatility or that inflated volatility level may drop back down
(11:25):
to, you know, closer to where it was before revert to the mean is
exactly, you know, the concept that we have.
And that's implied volatility crush, right?
Now that the unknown is known, there's no longer that expectation of what might happen
because now we know what actually did happen.
How does that affect?
(11:46):
How does that affect volatility?
So now that the earnings comes out, what was once an unknown event is known.
There's no reason for those options to trade at such a high level.
So the market re prices everything.
And that's when you see this natural wall crush and typically prices will gravitate
back to where they naturally have been before the earnings.
(12:06):
Okay.
So, but once again, it really gets down to the idea of supply and demand.
Right.
If all of a sudden earnings comes out and a stock makes a big move down, and I've seen
this and you think, well, you know, here comes the ball crush.
Sometimes vol pops because traders are thinking, Oh my God, the stock missed earnings.
It moved.
The market was expecting a 5% move.
(12:26):
It went down 20%.
Now there's a lot of fear in the market.
And like what else would next you could drop, right?
So sometimes volatility increases after earnings.
Typically it does decrease after earnings.
There's a ball crush, but there's no guarantee that there's going to be a ball crush.
Sometimes volatility does pop depending on what the stock does post earnings.
So yeah, right.
(12:47):
Good point.
Let me ask you this.
There's often talk of expensive versus cheap options.
And when we talk about expenses versus cheap, we're not talking about a, the cost of a $10
premium on a call option versus a $2 premium on a call option.
We're talking volatility and it's almost the analogy that I like to use is, you know, housing,
(13:14):
for example, you've got, you see a listing for a half a million dollar house, 2,500 square
feet, three bedroom, two and a half bath, what have you.
You really don't know if that $500,000 house, is it expensive or is it cheap?
You know, you can't tell just by that number.
You need other factors in terms of where's the location.
(13:35):
You know, if it's located in a high cost of living area, that house might be cheap.
If it's a low cost of living area, that might be expensive.
What are the comparable sales, you know, nearby, all of those things go into whether or not
that home is priced appropriately.
Volatility is, you know, the higher the level of volatility, the more expensive it's going
(13:57):
to be, but you need to know where that volatility is in relation to other things.
And that's where these metrics come in that you're going to be talking about, IV rank
and IV percentile.
What can you tell us about those?
So once again, when you're trading implied volatility, you really want to know what levels
that you're buying or selling.
(14:19):
And just like anything, you want to buy low sell high.
You don't, the last thing you want to do is buy expensive options.
You get your forecast, right?
The stock goes up and you still lose money, right?
You want to be aware and the way you, you, you measure how high or low option prices
are, are through looking at implied volatility charts.
But there are two metrics that many brokers do offer and they are called implied volatility
(14:42):
percentile and implied volatility.
Rick, right?
Yeah.
Yeah.
IVR and IV.
Right.
And those give us a measure of where current volatility is related to past volatility.
So it lets us know if, you know, if the stock's been trading at, if the option I should say
(15:05):
has been trading at a 20 vol and now it's an 80 vol, that might be considered, that
current volatility level might be considered expensive and therefore it might be a selling
opportunity.
If the investor thinks that it's going to drop back down to the normal 20.
Right.
As of all, as somewhat mean reverting, typically over time when implied volatility is low,
(15:28):
it tends to gravitate higher.
And when implied volatility is high, it tends to gravitate lower.
Now, you know, depending on what time period you're looking at, you'll look at, so this
is what I did when I was a market maker.
I mean, looking at implied volatility levels and charts for the issues that I was trading
and I would come up with a buy sell range.
Okay.
(15:48):
So just for an example, maybe over a two year period, you're looking at implied volatility
chart and the low implied volatility is 20 and the high implied volatility is 60.
Okay.
So I would, my buy sell range would be in my mind, you know, when vol gets in the low
20s, I'm more of a buyer.
And when it gets in the high 60s or high 50s, 60s, I'm more of a seller.
(16:10):
That doesn't mean I'm going to make money, but over time, as well as mean reverting,
over time, that should work out.
Right?
Because volatility is mean reverting.
So implied, implied volatility ranking is taking those two points.
It's taking the low point and the high point and comparing where implied volatility is
(16:31):
right now.
So let's just say the implied volatility, low point is 20, the high point is 60.
And right now implied volatility is trading 40.
It's right at the midpoint of its high and low range.
So we would say that's trading at the 50th percentile.
It's right in the middle.
Okay.
So it's basically taking three points, the low point, the high point, and telling you
(16:53):
as a percentage where implied volatility is now.
That's IV rank.
IV rank.
Okay.
The two I always get confused.
I know.
I know.
They're very similar, but they're also kind of different.
So an IV ranking of zero would mean that the current level of implied volatility is
the lowest point of the given time period.
Okay.
So the implied volatility rank of 100% would tell you that it's trading at the highest
(17:16):
level of its given period.
So if we had in your scenario the low point of 20, the high point of 60, current IV is
40, right in the middle, that's going to have an IV rank of 50.
50%.
Right.
It's trading at the 50th percentile of its whatever time period we're looking at.
Now IV percentile kind of tells you the same thing, but in a different way.
(17:40):
Instead of taking three points, the low point, the high point, and where it is now, it takes
all the given points over a given time period, and it tells you how often the implied volatility
has been below that certain level.
So if you have an IV percentile of say 80, okay, that's telling you that 80% of the time
(18:01):
implied volatility has been lower than where it is currently.
So it's just another way of measuring and telling you that implied volatility at this
point is high or elevated.
Now that doesn't mean you're going to make money by selling high implied volatility,
but it's giving you an idea that option prices are expensive and it will dictate what strategies
(18:24):
you want to incorporate depending on your forecast of bullish, bearish, or neutral.
So I can tell you personally, I remember trading, and you were on the floor at the same time
I was, during the whole internet.
You know, crazy, crazy.
And implied volatility was very elevated, but it was really hard to make money selling
(18:48):
implied volatility because the actual stocks, the historical volatility was moving higher
than the implied.
So even though if you had sold very expensive options back then, it was very hard to make
money doing it because the stocks were moving around too much.
So your intraday hedging of your position ended up costing you money.
(19:10):
So back in that weird period, people actually made money being long high implied volatility
rather than shorting.
And you know, there's a time and a place.
Sometimes the model breaks down depending on where we are, what's going on economically
or politically or whatever.
But there are periods when implied volatility stays elevated for long periods of time and
(19:35):
also when implied volatility stays depressed for long periods of time.
So after the internet bubble popped in 2001, the next two or three years, vol was just
really low and it was very hard.
Everything was very inexpensive, but it was hard to make money being long volatility,
even though, you know, because vol is low, you think, well, I just want to be long volatility
(19:58):
here.
It's hard to make money being long volatility for this given period of time.
So you know, there are no guarantees, but.
It's an imperfect science, but it's definitely concepts for worth investors knowing.
Okay, excellent.
Ken, excellent information.
Certainly thank you for sharing that with us today.
And for listeners interested in attending Ken's upcoming May webinars, I encourage you
(20:23):
to do so via the events section on our website, optionseducation.org, where you can register
for Ken's two upcoming May events.
And not only is he going to expound on what he shared with us today, but he's also going
to talk about more advanced concepts, a deeper dive into volatility skew and relative value
among many others.
(20:45):
Ken, really, thank you so much for joining us today.
Really, really enjoyed it.
Well, thank you for having me, Mark.
It's always a pleasure to be here.
And now, ladies and gentlemen, we're going to shift gears.
We're going to transition and listen into a conversation that I recently had with Jay
Soloff, lead options analyst at Magnify.
Jay's been a friend of ours at OIC for years, and I recently caught up with him on the road
(21:07):
where we talked about the evolution of options trading and the value of education in the
options space.
So let's go ahead and take a few minutes and listen in now.
All right, everybody, we are coming at you live from the floor of the Money Show Las
Vegas Traders Expo, and we're very, very fortunate and honestly very excited to have one of OIC's
(21:28):
good friends with us, Jay Soloff, lead options analyst for Magnify.
Jay, thank you so much for stopping by.
Thanks for having me.
Oh, Jay, thank you.
Let me ask you, so I know that you had a presentation.
I believe it was evolution of options, talking about that.
Why don't you tell us a little bit about what that presentation entailed and how you felt
(21:49):
about it?
Yeah, of course, and it's nice to get in front of people.
I do tons of webinars, but there's something different about having a live audience.
The live audience, right.
You can feed off that energy, yeah.
So evolution of options trading is kind of my history lesson on how options developed.
I'm super interested in a lot of investment history type stuff, and of course options
(22:14):
being an ex-market maker, that's really been my career, has been centered around options.
So what I usually do is I talk about how different events in the past have changed how options
are priced today, and I think it's important for people to be able to understand the reason
(22:38):
options are priced the way they are.
There's enough challenges to become a good trader as there is, so understanding a little
bit about the theory behind it without getting too deep into the math.
You don't need to know how to calculate black shoals to be a good options trader, but it's
kind of nice to understand how volatility sort of developed the way it is, and I think
(23:03):
it just helps people put perspective around their trading.
Okay, now you had mentioned how pricing has evolved over the years, over the decades,
for example.
What is an example of that?
How do you feel that pricing has evolved?
How is pricing different today than it was, say, 20 years ago?
Yeah, and that's like the ultimate question, right?
(23:25):
And a lot of that is based around these major events that have occurred.
So for instance, the financial crisis of 2008, 2009, the Lehman moment, where suddenly you
have these tail options, these really far out of the money options that should be worth
zero in theory, but they're now suddenly trading at 20 cents, right?
(23:47):
And 20 cents is not a big number at all, but if you think about it, it takes a six standard
deviation move to get there.
Why are people actually paying for those things?
Well, because we had these events occurred that were never supposed to happen, so now
these things have value and they never had value before.
That's an example I like to use.
So in what you're talking about, tail arrest, that's where skew comes in, yeah?
(24:08):
Absolutely, yeah.
Okay.
So I try not to get too deep into skew because I think if you're not that familiar with options,
then it starts to sound confusing.
But ultimately, yes, what we're talking about is skew and the tail skew and put skew and
to some extent call skew now after things like GameStop, but went from 20 to 500, now
(24:30):
you have these stocks that have call skew.
And so I try to bring that in.
I try to keep the language not too filled with lingo, but that's generally what I'm
talking about.
Okay.
And good turnout, you had said.
Good engagement, good questions from people.
Definitely.
Yeah, excellent.
And I completely agree with you.
Speaking live to a physically present audience versus talking to an audience only on the
(24:57):
internet, it's a completely different presentation style, completely different energy in the
room.
Yeah, I absolutely love it.
All right, let's shift gears, Jay, for a second.
So you've been in the business for a long time.
I know that you got started in Kansas City, the board of trade out there.
How did you end up here in Vegas?
(25:19):
Well, obviously it wasn't a direct line, right?
Yeah, that's, you know, there are several twists and turns along the way.
But so I'm from Kansas City, so I started, my degree was from University of Illinois
and I had a degree in economics.
So I started in the wheat pit, actually working for the exchange in Kansas City.
(25:39):
But I really wanted to learn options and options were not big on the Kansas City floor, it
was mostly a futures exchange.
And so the people down there were like, you want to learn options, you need to go to Chicago.
I'm like, well, that makes perfect sense for me because I went to University of Illinois,
I have a lot of friends up there anyways.
So I went up, basically handed out my resume on the floor and I knew someone who got me
down the floor handed out resumes and in an index trading company, SBX traders, they needed
(26:05):
a clerk, they hired me.
It was, yeah, I mean, just good timing, right?
Like, as you never know who's going to be hiring clerks and it's generally a lot of
knocking on doors, at least back then.
So yeah, so I worked with them and I learned, besides all the regular clerking stuff, just
(26:28):
not only all about options, but all about volatility and trading volatility.
Eventually I got on a seat in, by then we had moved into single stock.
So I was in the Amazon WorldCom, what else was in there?
Global Marine, National Semiconductor, a bunch of companies that have since been either are
gone or merged, but Amazon was the big one.
(26:48):
And did that until the dotcom boom ended and trading kind of dried up.
And at that time I happened to be recruited by this software company that was doing market
making software right when the exchanges were going digital, right?
Going electronic.
So it seemed like a good time to get involved with that.
(27:10):
So that took me to New York, to Wall Street for a little bit.
I was working with JP Morgan and some of these banks off the floor.
They were basically adopting our software.
The company was acting.
We ended up being a good stopgap while companies were developing their internal software.
So for a while we were super busy.
(27:31):
So I was back and forth from New York to Chicago.
So anyway, so fast forward.
So at that point I'm like, all right, if I'm going to be in this world and not as a trader,
I kind of want to get my MBA.
It was just kind of random thing that I decided I wanted to do.
I wanted to get away from winters.
(27:52):
So I applied to Arizona State because it was a decent MBA school in the warmest temperature
I could find.
Right.
And, you know, I got in and they flew me out.
I'm like, I have to go here.
So I came down to Arizona State thinking this was just going to be a temporary thing.
And I was going to go back into either trading or software business or whatever.
But I ended up meeting my wife at Arizona State and she's from Arizona.
(28:16):
So I decided to stay and that was really the, so this is where we get into the part where
I ended up in Vegas, right?
I couldn't do what I knew how to do in Phoenix, right?
This was way before remote working.
So I couldn't trade options.
I couldn't work for an option software company.
I couldn't do anything that I had a background in.
(28:36):
So I fumbled around for quite a while until I finally got into the financial publishing
industry, which now I've been in for 14 years where I got to basically talk about options
in either newsletter and eventually webinar format, you know, trading services.
And my focus has always been mostly on education just because of my background.
(28:57):
But yeah, I managed to just be a good fit.
I ended up being good at it.
I didn't know I would be good at presenting or good at writing or any of that stuff.
But I learned and I've really never left that industry.
And so the company, so Magnify, well, now we were since bought by Magnify, which is AI
(29:21):
assisted investing, which is, it's a cool product, you know, where you could basically
ask to link your accounts and can have AI analyze your accounts.
So, you know, they, but before that, investors, Ali was the company and we always, they would
always send their people to the money show and here in Orlando and just to talk about
(29:45):
our products and talk about options or dividend trading or whatever we have.
And so I just got, so I've been doing this now for like six years.
Well, you like to meet people that are in the space that, you know, you're interested
in.
Exactly.
Exactly.
Wonderful.
I never saw my products here at all.
Like I just come to talk to people, see what people are interested in.
(30:06):
I've had five subscribers just randomly come up to me and say, I love your stuff.
You know, so it's just a great, you know, it's just good to meet people.
Absolutely.
And so that that's a long winded way of getting here.
I like it.
I like it.
I didn't know about the Arizona state.
So yeah, that's interesting.
Go Sun Devils, right?
So let me ask you this circle back to your SIBO days, Chicago Board of Options Exchange.
(30:33):
Yeah.
A question that I like to ask people that come on the show because I remember it so
vividly.
What was your first impression when you went on the trading floor?
Was it, I know for me, I was thinking, boy, I can't believe something like this exists.
It was a zoo meets a high school boys locker room meets a, I don't know, an anarchy circus,
(31:00):
for lack of a better word.
What were your first impressions?
What did you think about the floor?
So at least in that, the exchange, not the, obviously not the new one now, but the old
one you would, one of the ways in, you would come down that escalator.
Down the escalator from the members lounge, right?
So the first time I did that, you go down and all of a sudden this floor opens up and
(31:26):
a giant space, this huge space, but what I think what maybe struck me besides all the
people running around, right?
Like you said, and the different colors and all that, I mean the technology, right?
It looked like a control room for like a NASA, right?
You just had monitors and machines everywhere and you just see all this.
I'm like, this is insane.
(31:46):
How is all this technology and all these people all in this one massive space?
How does anybody make sense of this?
So it was pretty overwhelming, but you quickly, it's exciting.
Incredibly exciting, yeah.
Yeah, so it's not, it's overwhelming in this, but you also like, all right, I want to figure
this out, right?
So it's not overwhelming in a bad way.
(32:06):
It's overwhelming and like, oh, this is going to be awesome.
Right, right.
Which it was.
It was, yeah, we definitely enjoyed being on the floor back in the day.
Thankfully I grew out of it.
Yes.
Yeah.
All right, Jay, let's go ahead and finish things up.
I like to do from time to time, try to catch people off their toes, do a lightning round,
(32:31):
and I know that you spent some time in Chicago.
Not a true Chicagoan from what I understand or from what I know, but certainly you've
been around long enough to understand the Chicago way.
As Sean Connery put it back in, what, the Untouchables?
But anyways, lightning round here, Chicago-centric, let me ask you.
(32:52):
All right.
Willis Tower or Sears Tower?
Always Sears Tower.
Thank goodness for that.
That is the correct answer, by the way.
Next question, when it comes to pizza, deep dish or thin crust?
I was always a big Giordano's deep dish fan.
Yeah, I love it.
I kind of liken it to tourists, like Times Square is the saying is that Times Square is
(33:16):
for tourists, Chicago deep dish pizza kind of the same way, but that being said, it is
delicious.
Yeah.
I do appreciate that.
So there really is no correct answer with that one.
So, so far you're scoring pretty well.
Sports teams, Bulls, Bears, Sox, or Cubs, or Blackhawks?
At least when I was there, I went to many Cubs games.
(33:39):
A lot of my friends from University of Illinois were Cubs fans.
So I definitely, and they're not in the same division as the Royals for home teams.
So I have to go with Cubs.
And the Kansas City didn't have a pro basketball team either, so I never had any issues with
the Bulls or Yankees.
Yeah, and actually I worked for Black Hawk Financial, so we had season tickets to the
(34:03):
Black Hawk.
Oh, that's great.
That was fun too.
So I really, anything that did.
All right, so, so Cubs and, Cubs and Blackhawks.
Cubs and Blackhawks.
All right.
That also is the correct answer.
Yeah.
Well done.
Let's see, Chicago centric, catch up on a hot dog.
I am a little wiffle offy on that.
Mustard, mustard only.
Yeah.
(34:23):
Okay.
So let's see, one more.
Well, let me ask you this, favorite Chicago memory, like where's a place that, you know,
if you had outer town guests come in, where would you normally take them?
Be a nice restaurant.
What's your favorite restaurant in Chicago?
Can I say series?
Well, I don't, do they serve food other than alcohol?
(34:45):
They had, I would go for breakfast sometimes.
Yeah.
So if you just wanted to like an ice omelet and.
Right.
Yeah.
Before the trading day series was a place to go.
Yeah.
Excellent.
Well, Jay, I got to tell you, you did pretty well in the lightning round.
Most of your questions or most of the answers were correct.
So well done.
You should be pretty proud of yourself on that.
(35:07):
I really appreciate you stopping by.
Thank you so much.
Thanks for having me.
I really appreciate it.
This was a lot of fun.
Let's do it again sometime.
Absolutely.
All right, Jay.
Enjoy the rest of your time here at Money Show.
I know you've got another great event coming up.
So best of luck with that.
Thank you.
All right, Jay.
Thank you.
You've been listening to the Options Industry Council's wide world of options.
(35:28):
If you have questions about anything you've heard on today's show, email options@theocc.com.
Or visit www.optionseducation.org and chat with OIC's investor education team.
Interested in connecting with OIC on social media?
Subscribe to the OIC YouTube channel.
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(35:48):
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And follow their page on LinkedIn.
Thanks for listening.
And be sure to tune in to the next episode of Wide World of Options.
You're listening to the Options Insider Radio Network, the home of the Options podcast.
For more quality options programs, visit theoptionsinsider.com.
(36:13):
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(36:39):
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