April 7, 2025 • 53 mins
The markets have shifted into a new volatility regime, and traders need fresh tools to navigate these choppy waters. In this illuminating conversation, Michael Gayed hosts David Dziekanski (Founder and CEO of Quantify Funds), Mike Venuto (Co-Founder of Tidal ETF Services), and Michael Silva (trader and host of Figuring Out Money) to explore innovative trading strategies for today's challenging market environment.
David introduces Quantify's groundbreaking launch of four new "stacked" ETFs that provide a revolutionary approach to thematic investing. Unlike traditional leveraged funds, these products offer 100% exposure to two carefully paired stocks within a single fund, creating effective 2:1 leverage with built-in rebalancing. The newly launched funds include APED (MicroStrategy/Coinbase), LAYS (NVIDIA/AMD), SPCY (NVIDIA/SMCI), and ZIPP (Uber/Tesla) - each targeting high-interest themes from cryptocurrency to artificial intelligence.
The conversation delves into the mechanics behind these innovative products, explaining how they solve one of the most challenging aspects of portfolio management: executing those difficult rebalances between correlated assets, especially during earnings seasons or market turbulence. As David explains, "These are prepackaged vehicles offering rebalancing in an ETF that you don't have to think about."
Silva shares practical insights on adjusting trading strategies during periods of expanded volatility, while Venuto illuminates the structural tax advantages ETFs offer over traditional investment vehicles. The panel also explores Quantify's successful BTGD fund, which applies the stacking approach to Bitcoin and gold, demonstrating how automatic rebalancing can capture value during volatile market swings.
For traders navigating today's unpredictable markets, this discussion offers valuable perspectives on using innovative investment vehicles to maintain tactical exposure while managing risk more effectively. Whether you're looking to trade through earnings season, add tactical leverage to your portfolio, or simply understand the evolving landscape of ETF innovation, this episode provides crucial insights for surviving and thriving in volatile markets.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:09):
I don't think I've ever done a space this early, 9
am Eastern, but you know why not?
We'll see how big of theaudience is here.
For those that are listening,appreciate those that are
attending.
Please do me a favor like andrepost this so that the algo
tries to push this out.
Would be much appreciated.
Many of you know that I've donea lot of spaces in the past,
(00:30):
pivoted more towards video andselectively doing some spaces
for various clients of mine onthe lead lag media side.
This space is sponsored byQuantify Funds, a firm that more
and more people should knowabout that.
My friend, mr David Jankowskiis the man behind.
I think this is going to be atimely discussion from a lot of
perspectives.
I have myself been very loudabout the last two and a half
(00:54):
three weeks in what seems to bea return to a more normal market
, and when I say normal market,I'm talking about correlations
returning to the way they werepre-2020.
And we're going to be touchingon that how to think through the
volatility that's playing outhere and new ways of trading
through it.
So I see Mr Mike Silvers here.
Mike, if you want to come up,feel free anytime.
(01:15):
You know you're more thanwelcome Anybody else that's here
that wants to engage, askquestions, just interact.
Don't hesitate to click on thatbottom left micro request
button.
With all that said, my name isMichael Guy, a publisher of the
lead Lagerpore.
Joining me is with me is MrDavid Chikansky Quantify Funds.
David, I believe you're there.
I'm here.
Good morning, mike.
How are you Good?
I'm good man, I'm good.
(01:35):
By the way, for those that arenot aware or never met Mr
Chikansky in person, the guy isripped.
Mr Chikansky in person.
The guy is ripped, and I'mtrying to become more like him.
I'm waking up every morning at4 am.
I look to him as like a guythat I want to kind of aspire to
, and he got some prettysuccessful funds, which we'll
talk about too here.
But, dave, introduce yourself.
Who are you?
What's your background?
(01:56):
What have you done throughoutyour career?
Speaker 2 (02:02):
What are you doing right now of Quantify Funds?
Today is our second launch day.
We launched our first ETF inthe fall, the Bitcoin Gold ETF,
stkd.
Bitcoin BTGD is the ticker andtoday we are launching four
stock pairs in the AI, cryptoand driverless cars space.
A lot of people have adopteduse of leverage ETFs over the
(02:27):
last couple of years, mainlybecause, quite frankly, it's
been a lot more costly to getmargin on a platform level basis
and we think a lot of that gaphas been filled in by the
leverage ETF space.
So we're very happy today tolaunch our next four ETFs.
First is stacked MSDR and coin.
So for $1 in the ETF you get $1of exposure to both
(02:49):
MicroStrategy and Coinbase.
Ticker APE to A-P-E-D, which isour main crypto themed ETF
launch for the day.
We have two in the artificialintelligence space, both
stacking NVIDIA, one with AMDand one with SMCI.
Nvidia and AMD is ticker LAYSL-A-Y-S.
Nvidia and SMCI is tickerS-P-C-Y.
(03:12):
And lastly, but is thedriverless car theme, which is
Uber and Tesla 100% exposure toboth Uber and Tesla in the same
ETF with the ticker Z-I-P-P.
So these are meant to betrading tools but also can be
held for longer than traditionalleverage ETFs.
They don't have a daily resetoutlined in their perspective as
(03:34):
a prospectus as some of theseother leverage ETFs do.
So these are great ETFs to adda little leverage to your
portfolio.
Trade through earnings seasonon a common theme add a little
leverage to your portfolio.
Trade through earnings seasonon a common theme.
We've seen a lot of you knowoutside of really the last three
months dominance by the megacaps in all sectors and
(03:55):
industries and the concept tiers.
You can get really goodconcentration in some of the top
names within the theme orsector and allow us to rebalance
between the two, adding alittle bit of benefit of
diversification in there.
Speaker 1 (04:04):
First of all, I don't think FinTwit has any clue what
goes into launching a fund.
So before we get into thecurrent environment, the
strategies, I want to talk aboutthe product development process
for you.
You had a pretty successfullaunch with BTGD, the Stacked
Bitcoin Gold Fund.
Talk me through the process ofdeveloping a fund.
Speaker 2 (04:29):
Yeah, it's a very long, timely, stressful and
costly process.
You can get an ETF frominception idea to market really
in about 100 days.
The more complex and unique itis, sometimes it can take a
little bit longer.
We have partnered with Best ofBre ETF white labeling platform
title.
Mike the CIO is on the callhere, listening as well.
(04:51):
It's much easier to come tomarket with a partner than
trying to create your own trust,even if you're a multi-billion
dollar firm.
There's just so much logisticsthat go into it the quality and
caliber of the actual lawyerswriting your prospectus with you
, et cetera and making sure youcan get something through the
SEC in a very clean process.
And that's just the start of it.
(05:12):
And from there, just reallygetting the messaging out is
equally as complex from acompliance perspective.
Dealing with FINRA and the SECand trying to make sure
everything is clean and aboveboard is a very timely and
costly process, but it's also avery rewarding one.
I've been in the ETF industryfor about 20 years and seen the
evolution and it was a lot moredifficult 15 years prior than it
(05:36):
is today, while it's still very, very difficult and complex and
takes a lot of execution and alot of avenues in sync
simultaneously.
At the same time, if you dowork with really good partners,
it can be done in a veryrelatively cost effective
manager process and timeline.
So we filed for this inDecember and we're now launching
(05:59):
in early March.
And given we are trying to donew, innovative things in this
space, as you alluded tostocking individual stocks on
top of each other here, you knowwe're very, very proud with the
speed at which we've been ableto bring these to markets.
And yeah, it's not an easyprocess.
It's an evolving process.
I'd say the compliance side ofit is the most confusing, quite
(06:21):
frankly, and it makes it very,very hard to get the messaging
out.
So we do do very muchappreciate any support you have
in reposting any material we doactually get through this crazy
compliance world?
Speaker 1 (06:34):
Is it fair to say that people's perception around
around the industry is wrong,meaning they don't understand?
It's not really about being aportfolio manager.
It's more about being a productdeveloper.
Speaker 2 (06:45):
It's a little bit of both, and it depends what kind
of products you're bringing tomarket.
There's a lot of successfulentrepreneurs that have brought
what I like to call trust meproducts to the market, where
you have to build up your owncredibility as a manager in the
space and really sell on yourown ability to maneuver in
different markets.
We've seen the wave of successfrom people such as Cathie Woods
(07:06):
and a lot of other follow-onsin that space too.
But it's equally as complex toactually create a what we like
to call a trading vehicle, or avehicle that you could almost
understand, and understand whatyou're going to expect from it,
in 30 seconds.
So can I look at this product?
Can I see its investmentphilosophy and its outline,
(07:26):
understand it, comprehend it,understand how I could
potentially use it in myportfolio in a very, very quick
manner?
And that's equally as difficult, especially if you're trying to
do that in an innovative way,offering new things that the
marketplace hasn't seen before.
Speaker 1 (07:39):
It looks like Mike is back.
Let's see if, mike, that'sworking for you.
Hey, mike, can you hear me?
Yes, there we go.
So I'm waiting for Mike Silvato launch the Trust Me Bro ETF,
to play off of David's pointthere.
But, mike, go ahead, introduceyourself.
Speaker 3 (07:53):
How's it going everybody?
Michael Silva, here I trademainly.
Most people know me from theYouTube.
I have a channel there calledFiguring Out Money where I try
to do daily stock market briefs,give my analysis on the market
and then actively trade it.
Speaker 1 (08:09):
So the nice thing with this is that we're going to
have a discussion aroundtrading and then vehicles to
trade with.
You know product developmentand then vehicles to consider,
you know, in this kind ofenvironment.
So I want to keep going to you,mike, on this before we get
into the opportunity set.
I'm curious what your take ison the last three weeks here of
volatility.
I don't know if everyonesuddenly is bearish.
(08:31):
I don't know what people think.
Even if I knew what peoplethought, I don't think it
matters, because it depends onhow they're positioning.
What have you been doing in thelast several weeks here as
markets have gotten more violent?
Speaker 3 (08:41):
Yeah, so now nine full trading days since we
slipped below the flip line, andthat is one of the elements
that I use for understandingwhen market conditions change.
So when we do slip under this,when the S&P 500 slips under it,
we typically see an expansionof volatility.
At least, that's kind of wheremy forecast goes to.
(09:01):
And knowing that volatilityexpands, right, I try to keep my
bias as most undirectional aspossibly.
But I look to see what themarket's pricing as far as a
range of risk goes, to reallyhelp me identify some key levels
in the market.
And since then, I mean, it'sbeen yeah, it's been some rough
volatility.
However, like even this tradingweek, so far it's all within
(09:23):
the market's expectations.
The market priced in for theSPY about a $12 expected move,
the S&P 500 priced in about a$120 expected move and we
slipped outside of that rangebut came back in it.
Now we're right back down to it.
So there's nothing.
The market's still well withinits expectations right now of
what it priced in the prior week.
Market's still well within itsexpectations right now of what
it priced in the prior week.
Speaker 1 (09:44):
How important is it for you from a trading
perspective to have a very sortof tight, relatively small
number of things to tradeMeaning?
I think the challenge for a lotof people is that they end up
looking at a huge watch list ofa bunch of stocks and a bunch of
ETFs and they maybe get someanalysis paralysis or they get
distracted because of the numberof things they're looking at.
And do you typically have kindof a short list of things that
(10:07):
you actively go in and out of?
Speaker 3 (10:09):
It becomes a short list.
However, it starts kind of wide, so I'll cast a wide net and
then I'll hone it in.
I like to look for I'm mostly atechnical trader, I add some
basic fundamental stuff in thereevery once in a while, but then
(10:30):
I look for the stocks that arecontracting, that you see period
of volatility where they'rekind of tightening up, and I try
to hop on the right side whenobviously volatility expands and
by doing so, if you're right,you can catch a nice move.
However, if you're wrong, youshould understand where that
risk level is and be able to getout relatively quick.
Speaker 2 (10:46):
Mike's point there about everyone seemingly being
very bearish in today's world.
We actually are collecting andwe'll start issuing research on
flows in the leverage ETF space.
But if you look over the lastone month and you kind of sum up
all the products by categoryand equate for the 2x and 3x and
long and short flows, et cetera, Bitcoin leveraged ETFs have
(11:09):
had over $4 billion of outflowsover the last month.
20-year treasury leveraged ETFshave had $2.4 billion of
inflows and Qs have had almost$15 billion worth of outflows
over the last month in theleveraged ETF space.
So it really shows kind of backto what you said there, Mike,
that a lot of people, while Ithink there's some reason to be
(11:29):
bearish, for sure it seems likethe entire investment community
in consensus is bearish at thesame time, which always makes me
think that we might be early onthat move and you know, an
upside wall of worry climb canbe pretty significant while
waiting for that bearish play tocome to fruition.
Speaker 1 (11:50):
Let's talk about the stacked new funds that you're
bringing to market, because thatrelates very much to the idea
of how many things a traderlooks at.
There's been a lot ofinteresting demand for a lot of
let's call them more retail typeof demand, right?
So we've seen a proliferationof high yielding cover call deep
(12:11):
out of money put to generateyield type of strategies.
We've seen a proliferation oflevered single stock funds.
What you're doing is different,david, in that it's not
traditional, which is probablywhy you'll be successful.
You have to find that whitespace where Vanguard and
BlackRock are not playing.
(12:32):
Talk to me about sort of thereasoning for you in terms of
creating these stacked funds.
Speaker 2 (12:39):
Yeah, this is a very nice marriage between an
institutional strategy ofpackaging leverage in a 40 act
type product and fun tradingtools, kind of, and finding that
middle ground between the two.
As you alluded to, there's beena lot of success in individuals
and hedge funds and RAs tradingleverage ETFs, single stock
(13:01):
leverage ETFs, etc.
But oftentimes we find thatthey're really investing in a
theme more so than an individualname, and it's just a lot
harder to depend on yourself tomake those really hard
rebalances.
So think, if you're going intoearnings week and you really
want to bet heavily on, forexample, artificial intelligence
companies, et cetera, chipcompanies, choosing two, and are
(13:24):
balancing between the two, andyou've, you know, let's say, amd
reports first and pops, thewhole rest of the space pops as
well Are you going to actuallyrebalance out of AMD into the
other names that are haveearnings later, in that in that
quarter the rebalance all getsdone for you within this?
So this is a way to mix bothlike what they call capital
efficient and portable alphastrategies.
(13:46):
That was, you know, in the 40act product, the least first
release to market by PIMCO, Ifyou remember the PIMCO stock
plus funds, and then in the ETFspace over the last couple of
years has gained a lot ofadoption with launches from
wisdom tree, uh return stackETFs, which, uh, which is a
partner of ours on these, andobviously our first Bitcoin gold
(14:06):
product, and these are a littlebit more high volatile versions
of all that.
These, I think, are the highestvolatility of any portable
alpha or stack products in themarketplace.
But volatility can be very good, especially for traders when
you're trying to find thatmomentum swing.
This is a very good way to playthat AI theme, the driverless
car theme, crypto theme, or aweek, a month, three months, et
(14:31):
cetera.
You have a little moreconfidence in holding this
long-term than a traditionalleverage ETF.
Speaker 1 (14:36):
Maybe I missed it, but sorry.
I apologize.
But what is the rebalancinginterval?
What causes the rebalance?
Speaker 2 (14:42):
So it is an active fund.
We are targeting somewherebetween a 5% and 10% drift.
So we anticipate rebalancing acouple of times a week and also
on creations and redemptions.
But anytime there's a big move,for example through like an
earnings period, you willabsolutely see rebalance at that
point.
So, doing that difficultrebalance in your portfolio,
which we've been talking about alot with our first ETF
(15:03):
Difficult rebalancing yourportfolio, which we've been
talking about a lot with ourfirst ETF, the Bitcoin and gold
ETF, btgt we launched that rightbefore the election.
If you think about, bitcoin ranfrom about 70,000 up to 108,000,
has fallen since and gold hastaken up the slack.
Are you doing those difficultrebalancing between these two
assets?
In that case, that's a scarcityplay, a currency debasement
play.
We find a lot of allocatorsallocate to both Bitcoin and
(15:26):
gold, but they're notrebalancing between them.
Similarly, if you are bettingon the AI theme, are you doing
those difficult rebalancesbetween your favorite names in
the space?
So these are prepackagedvehicles that are offering this
in an ETF that you don't have tothink about and is being done
for you.
Speaker 1 (15:42):
Mike Silva, I'll go to Venuto in a second.
I want to hear your thoughts onrebalancing.
I think when people think abouttraders, they think that
they're going in and out fullyObviously.
It's much more nuanced thanthat.
Do you, in the management ofyour portfolio, do any kind of
more systematic type ofrebalancing between different
investments, different tradeideas?
Speaker 3 (16:04):
As far as systematic goes, no, I don't have a
systematic, necessary process.
Once I see a trade set up, I'llinitiate what I'm looking for
as far as risk for thatindividual one and go from there
.
I like this idea, these funds,though, and being a little bit
more concentrated, so can't waitto kind of dive specifically
into those.
(16:24):
But for me right now, when Iinitiate more specifically so
people understand, I do have adifferent process for swing
trading, day trading and theninvesting right.
So it's all separate across theboard for me.
But when I'm swing trading,I'll initiate the trade based
off of the setup and what I see,and the risk will be set, and
I'll adjust the risk as thetrade either goes in my
(16:46):
direction Actually, that's theonly time that I'll adjust the
risk If it goes in my direction,if it comes against me, then
it's just going to stop me, mrVerduto it's been a minute.
Speaker 4 (16:54):
How are you doing?
Oh, my goodness, it's been awhile.
It's been a minute.
Exc Markets are all crazy andwe've got some new ideas coming
out here.
So I'm the co-founder of Tidal.
We help people launch, grow andoperate ETFs.
We've done that for Guyad.
We've done it for DavidWeisskopf's down there.
(17:17):
He does it with us too.
Most of the people you guyshave referenced today we've
helped.
Today we're currently servicingabout 200 ETFs and about $30
billion Real.
Excited about these ideas.
You know, just the idea thatyou can get leverage that
(17:37):
doesn't decay, the idea that youcan, you know, stack two stocks
.
Obviously, me being more of acrypto person, I'm mostly
excited about the micro strategycoin, um, and it's just a
interesting way for traders toget exposure uh, dave, going
back to you, um, we have a newproduct launch.
Speaker 1 (17:59):
How do you even get people to be aware of it?
I mean, obviously we're doing aspace, so part of this is is
awareness that.
But let's face it, the ETFlandscape is um incredibly
crowded.
Speaker 2 (18:09):
Yeah, uh, you have to kind of attack it from all
angles.
You send out a press release inthe morning, you talk to
reporters, you do some PR work,you start getting the Google SEO
engine going.
You start getting Twitter andReddit marketing going we're
doing Twitter spaces here enginegoing.
You start getting twitter andreddit marketing going, we're
doing twitter spaces here.
But it's really just not onething.
You have to do all things atthe simultaneously, which is
(18:31):
kind of what I alluded to.
The difficulty of launching anetf is just a lot of things that
have to happen at the exactsame time.
Um, but if you do it well andyou put it out there and you
have a clean message, uh,obviously the marketplace will
decide what they want to trade,and that's up to the marketplace
and we can have a pretty goodjudgment of what we think might
(18:51):
do well.
But really you just have tokeep honing in your messaging
and getting it out in front ofpeople as much as possible.
I don't think it's toodifferent than, quite frankly,
an e-commerce sale in that youneed to see it a number of times
and think about it before youwill consider it and maybe that
fourth, fifth, sixth time yousee it.
If it's an idea that doesresonate with you, maybe then it
(19:11):
ends up on your watch list.
We're always available forfollow-on calls with advisors
and individuals to talk indetail about how these products
work.
So sometimes that'll lead tophone calls with allocigators
and then, if it's something theywant to begin trading, we
hopefully start seeing someflows from it.
Speaker 1 (19:28):
Mike Silva, how important is longevity for you
of a fund?
How important is trading volume?
You know I I'm so myself alwaysblown away that people don't
understand that volume in an etfdoesn't really mean very much
as long as you put a limit order, as long as the underlying is
liquid.
You know that's, that's whatmatters, not the, not the actual
(19:49):
thing that's going on at themoment in the end of the ticker.
Speaker 3 (19:52):
But you know, for as for you as a trader, how do you
think through all that for me asa trader?
How do you think through allthat For me as a trader?
I do find it important to haveliquidity.
I do prefer tight bid-askspreads, and if I'm working with
something that's a little bitwider, I have to use obviously
more limit-style orders Ontighter spreads.
(20:12):
I'm okay with a different typeof order.
Mean then, as far as volumes go, I mean it really depends,
right.
So if it is more of a longerterm hold and it's in an etf
that has just a decent amount ofvolume, it doesn't need crazy
amounts.
I'm fine with it.
But for more of the shorterterm intraday trading, I like to
(20:33):
see significantly moreliquidity, and that's the that's
the challenge, right, mike?
Speaker 1 (20:38):
I mean, you've got to kind of get people to be aware
of a fund and there's kind of achicken or egg dynamic where
they want to see the volume.
But for there to be volume,people have to actually not need
to worry about volume.
Veduto, you have been throughenough of these in your career
and you've launched a ton ofdifferent products under title.
Uh, talk me through, sort of um, your initial impression of the
(20:59):
idea when chikensky brought itup to you um and um.
Speaker 4 (21:03):
It's just such a natural extension of the bitcoin
and gold concept.
Um, and seeing theinstitutional versions that you
know, uh, cory had done and andhow that was resonating with
that audience.
Obviously, with these, theaudience is people who are more
do-it-yourselfers, right, likethere's this thing called
(21:24):
statement risk, where financialadvisors aren't going to put the
ticker aped in their clientportfolio.
But it draws the attention ofthe people who are, you know,
maximalist and and love themicro strategy and things like
that.
So Noddick's been writing a lotabout this lately.
He calls them, I think, blackhat products.
(21:46):
That's fine, it's.
It's not, it's not our job tosay this is how you should
invest your money.
It's not our job to say this ishow you should invest your
money.
Silva can tell people thatright.
Or a financial advisor can tellpeople that what we can do is
provide really capital efficienttools, tax efficient tools,
(22:10):
things that give leverage ormargin that would be expensive
for you to get on your own.
Instead, we package it up andrebalance it and do all the
stuff in the background.
So, yeah, these are activelymanaged.
The value of the activemanagement is rebalancing, it's
tax efficiency, it's things likethat.
It's not that we're makinginvestment decisions on a
(22:33):
day-to-day basis and somethinglike this to help In the ETF
world.
These are exposures and there'sbeen lots of great examples of
exposure being the way tosuccess, right.
I think ETF started 30 yearsago as a better way to get
exposure to the S&P 500, right.
Then you have leaps and boundswhen you have a better way to
(22:54):
get exposure to the S&P 500.
Then you have leaps and boundswhen you have a better way to
get exposure to gold in 2005.
And obviously the mostsuccessful launch ever is the
Bitcoin ETFs a little over ayear ago, exposure to Bitcoin
right.
So this is just exposure toleverage that's hard to get on
two stocks, just exposure toleverage that's hard to get onto
(23:22):
stocks.
And that's the value prop thatyou're handing people a tool to
make things work.
I was receptive and I'm excitedabout the way it's been put
together and we'll see how themarket takes it today.
Speaker 2 (23:32):
Yeah, I think for a long time our industry has said
that, you know, the intelligentinvestor is the institutional
RIA, and what we've really foundis, I mean, if you look at some
of the forums on Reddit, someof the back tests that these
people are doing and thediscussions they're having, in
many cases I think some of theretail world is doing a much
higher level of due diligence ontheir portfolio construction,
(23:54):
and you're seeing it with theasset flows into vu and spy, and
while all of these, likeleveraged products, are gaining
steam as well, the real gorillain the room is just the s&p 500
related products that just keeptaking in massive, massive
assets, and so what we think isa lot of the retail space is
just, quite frankly, doing thismore boring thing buying a lot
(24:16):
of uh, s&p 500, whether it'sthrough SPY or VU, or I think VU
just finally passed SPYrecently and these are the, you
know, these types of leveragetrading tools are how they're
rounding up their portfolio, howthey're expressing their
opinions and, quite frankly, wethink they're doing it in just
as an advanced, if not moreadvanced, way than some of the
(24:38):
advisory world that we've seenover the last 20 years.
These guys are really trying tocrowdsource investment ideas
from people such as Mike on thiscall, et cetera, and put them
into action and act quickly andoftentimes a lot quicker than
financial advisors are willingto act in their client books,
and I think that's why you'reseeing a lot more adoption from
(24:58):
the retail space in these typesof products versus from the RIA
space, but that might changeover time as well.
Speaker 1 (25:05):
How is that leverage achieved?
How are you achieving that?
And for us, going 100%.
You know the two stocks.
Speaker 2 (25:10):
Yeah.
So with the single stock, withthe leveraged stack single stock
world, there are no futures onindividual stocks, so the
primary source of leverage hereis through swaps.
In some cases we will alsoconsider using options as a
source of leverage Coming out ofthe gates.
Right now, all of theseproducts, all the leverage is
received from swap agreements,so it's again a much more
(25:31):
cost-effective form of leveragethan you can get traditionally
as an individual investor onyour brokerage account, and
that's why we think there's alot of appetite for these types
of products, for B2GD, theBitcoin and gold product, that
we're accessing our leverage tothe futures market.
Speaker 1 (25:49):
Mr Silva, when you trade, do you do anything on the
leverage side?
Are you doing margin?
Are you levered funds?
I mean you know?
And if you do, how do you, howdo you manage the risk there?
Speaker 3 (25:59):
Yeah, I definitely use those leverage funds very
simply, so I like to use them.
Once again, it depends oneither if it's a day trade or
swing trade.
When it comes to swing trading,I like to use the leverage
funds because it'll allow me tokind of keep some more capital
to the side and I typically willjust lessen the positions a bit
.
But if it is a really, you know, a-plus setup, concentrated
(26:21):
trade, I can go a little bitheavier.
I named the space.
Speaker 1 (26:24):
It's time to lock in, and I've been, in my typical
fashion, posting that a littlebit ominously, because I do
think that this could end upbeing a much bigger volatility
event than people realize.
I think it goes beyond Trump,because I keep looking at the
end and I keep thinking tomyself this is going to explode
again, you're going to have oneof those scares.
(26:45):
I have been early on the Japanthesis, but I still maintain
that the end point remains thesame.
It's just about the when, and Isay that not as a perma bear, I
say that as a logical humanbeing, looking at the situation
that is before us, beyond just achart and even beyond the yen
(27:07):
itself, the way it looks, justlooking at Japan's inflation
picture.
So, if we are in a growth scare, a more volatile environment.
Dave, what's sort of thethinking from a communication
perspective when it comes tobringing funds to market in what
looks like it could be a cycleshift?
Speaker 2 (27:27):
Well, first off, I'll say more granularly over the
long term I don't disagree withyou, but I do think the same
statement can and has been saidfor for years, not from yourself
, but from other practitionersin the marketplace in fairness
it's been said for years, by metoo.
Speaker 1 (27:42):
Now, in fairness, I also said gold.
Speaker 2 (27:44):
Yeah, I got very bullish on gold, october 2023
and all this, but anyway, yeahyeah, I mean, that's the beauty
of the market there's always twosides of every coin, um, and
you know, while I do thinkthere's a lot of fundamental
larger term risks to our overalleconomy, actually trying to
call when that plays out can bevery much fool's game.
On a day to day basis, these are, you know, standard deviations
(28:06):
that can be plus or minus threeto five years in some cases, and
so, whether it's a short termbounce back trade or a longer
term trade, we created thesevehicles for that upside swing
right.
So, quite frankly, if yourtimeline is off by like six
months, there's a lot of upsideto be had over the next three to
four months, as we've seen overthe last couple of years.
And these are products that,while you know they do have a
(28:30):
lot of volatility, are built andconstructed so that you can put
them in your portfolio andmaybe not have to watch them
every single hour or everysingle day, because there is
this rebalancing feature in them, and so they make them more
suitable for what we like tocall leverage for the long run,
and so they're way to add alittle bit of leverage to your
portfolio and in an investmentthesis behind, for right now you
(28:52):
know, driverless cars, ai andand crypto, etc.
Um, and doing so in a way that,like you get that same oomph
with a lot of these leverageetfs, but you do have a little
bit more assurance that there'ssome level of rebalancing going
on within the product thatallows you to hold it and have
less decay, as mike the new topoint it out doesn't that?
Speaker 4 (29:11):
doesn't that resonate for you somehow?
Speaker 1 (29:13):
uh, yeah, I mean I kind of have a.
It's funny that that said so.
Um, I'm actually starting at 10, am doing ama.
Ask me anything on reddit onthe subreddit on uh leverage,
etfs exactly on that paperleverage for the long run.
So, yes, I, uh, I can certainlyrelate to the idea of tactical
leverage.
I do think what's missing thisis.
Speaker 2 (29:34):
I will say there's tactical leverage.
This is structural.
We're not trying to do anythingother than offer 100 exposure
to both so that when you look atthis, you should have a pretty
good assurance of what did, forexample, micro strategy do today
?
What did coinbase do today?
Add those two together.
That's generally what it shouldprovide you on a day-to-day
return yeah, no, I think that'sfair.
Speaker 1 (29:55):
now, is it also also fair to say that, if you're
going to do this type of aproduct, they have multiple
funds covering multiple pairs ofstocks you want to have, as as
you want to have, stocks thatare independently volatile of
each other but in general havehigh volatility.
But that, that rebalancingaspect, I think, is where the
alpha really gets to beinteresting.
Speaker 2 (30:15):
There's the rebalancing aspect, but you also
want to make it investable on athematic basis too.
So you know some pairs havebetter diversification benefits
than other.
But all pairs are better thanjust leveraging the same stock
on top of itself, right, even ifit's just the magnitude of
(30:38):
movement through an earningsperiod, of how, for example, amd
might do versus NVIDIA, youknow, on whatever earnings day
that stock pops, it's likelygoing to pop more than the rest
of the category.
There's going to be some sortof diversification benefit, even
in very trending stocks orcorrelated stocks, to do that
rebalance between the two.
So our most diverse basket isthe Bitcoin and gold ETF, btgd.
The correlation over a 10 yearperiod between Bitcoin and gold
(30:58):
is about 8 percent and it variesover time, and so there's
varying level of benefits fromthe rebalancing mechanisms.
But they're all superior tojust stacking the same product
on top of itself.
And that's not to say you can'ttrade leverage ETFs.
But I think the people who doit well are constantly
(31:19):
rebalancing their portfolio toget that exposure they want, and
this is a way to have that samesort of oomph and leverage in
your portfolio, while we aredoing a lot of the mechanics
behind the scene, to do therebalancing within the products
as opposed to making you do itat the end of the day, to true
up your intended exposure foryour overall portfolio.
Speaker 1 (31:39):
Speaking of mechanics .
I think that's a goodtransition to Venuto on the tax
efficiency side of how ETFs work.
Part of this AMA I'm doing ispeople are saying, well, if you
were to create a leverage forthe long run taxable fund at
some point, there's no benefitto just doing it yourself.
They're not factoring in theheartbeat trades.
So maybe Venuta might beinteresting for the audience to
do a little bit of an educationlesson on how that tax
(32:02):
efficiency for an active ETF isachieved.
Speaker 4 (32:04):
Sure, I was saying earlier, etfs are about 30 years
old.
The first one was designed tobe SPY, right, the S&P 500.
And it was designed for traders, right.
There was no thinking at allabout buy and hold ETFs when
these things were created.
The functions of it, the factthat it has this ability to
(32:27):
create and redeem sharesintraday, which was necessary to
make it a really cool productfor traders ended up with a
happy accident that they didn'tfigure out till three, six, nine
months later, which was hey, ifwe can create and redeem
intraday, we don't have toredeem the stocks that are down.
(32:47):
We can sell those and realize aloss in the portfolio, but
let's redeem all the stocks thatare up in that basket.
But let's redeem all the stocksthat are up in that basket and
(33:10):
therefore the actual sale of the10 stocks that are up the most
doesn't happen in the fundtrading right, and they have an
exemption.
So, essentially, the ETFwrapper is designed
unintentionally in a way whereit gets out of the big problem
that SMAs and hedge funds andespecially mutual funds have,
which is you can often be forcedto pay taxes on gains you
(33:33):
didn't even receive.
They could be in there for 20years and you buy into a mutual
fund and the next day they sellApple that was up 300% over
those 20 years.
You're going to get a tax bill.
It's ridiculous.
It's antiquated technology.
So the happy accident of theETF structure makes it
(33:55):
substantially more tax efficient.
Now comes the slight disclaimerwhen it comes to these funds.
These are using swaps.
It's a little bit more complex.
The rebalancing can be donewith certain things, but it's
not as tax efficient as atraditional kind of buy and hold
, like index.
(34:16):
That said, anything withleverage is going to have those
concerns right, because you'redoing one thing to get above the
other.
So that's kind of the processand it's pretty amazing.
There's very few guarantees inthe world of finance, but for a
(34:39):
taxable investor I can almostguarantee that the same strategy
in a mutual fund and in an ETFyou're going to get a better
return in the ETF after taxes.
Speaker 1 (34:51):
Dave, I don't know if you want to add some thoughts
on that.
Speaker 2 (34:53):
Yeah, I mean.
So you have to look at like,how tax efficient would a
strategy like this be otherwise?
And what are the costs ofleverage you're paying?
And really the reduced cost ofleverage here we think still
makes it worthwhile for ataxable investor.
And obviously if you're doingthis in retirement assets, you
don't have any issues with taxes.
(35:13):
So leveraged ETFs as a wholeare not as tax efficient as a
plain vanilla equity ETF, butthey still can be pretty tax
efficient compared to mutualfunds and hedge funds and SMAs
really add no discredits versusthose.
So you're on an even playingfield to everything else.
You're just not as taxefficient as a traditional
(35:34):
equity ETF that can have, quitefrankly, every single stock in
its portfolio go up.
Have the managers decide theywant none of those exposures by
the end of the year and andrecognize there's no capital
gains for the shareholders inthat rotation.
Speaker 1 (35:47):
Mike Silva, how, as a trader, that's always the
challenge.
Right, it's like you might havegreat trading gains but if
you're doing a taxable accountyou got to maybe outperforming
by just not trading at all.
Do you think about taxes at allwhen you're trading, and what
kind of accounts are you tradingin?
Speaker 3 (36:04):
Yeah, I do think about taxes.
I see it every year.
So once again, it's differentfor every account.
So when I think of shorter termtrading, first off, if you're
paying taxes, that means you'remaking extra money.
That's how I look at it.
I don't give out tax advice.
I have a CPA for all that goodstuff, but I definitely have my
longer term accounts structureddifferently.
(36:26):
So I'll trade some of my swingtrading is done through my Roth
and then I have some shorterterm accounts that I'll just pay
whatever's due.
And then there's also obviouslyother products that have tax
advantages.
So it's a pretty complex worldand I tend to stay away from it
and let the professionals kindof help me, help guide me
(36:48):
through all that stuff.
Speaker 1 (36:49):
Chicanxie.
So you've got these four thatare launching today, I think
just for those that are new here.
Maybe repeat those, but alsotalk to me about kind of future
plans, assuming that these aresuccessful.
And you know, I think if we'rein a volatile environment then
the rebalancing will be evenmore beneficial as a backdrop.
But you know other things thatare coming down the pipeline
from Quantify Funds.
Speaker 2 (37:08):
Absolutely so.
Again, my name is DavidChukansky.
I'm the founder and CEO ofQuantify Funds.
We just launched our second,third, fourth and fifth ETF.
Today, our first ETF launchedin the fall to leverage Bitcoin
on top of gold, ticker BTGD.
And today we launched fourstock pairs in the AI space
NVIDIA and SMCI ticker SPCY.
(37:28):
Nvidia and AMD ticker LAYS.
Microstrategy and Coinbaseticker 8APED.
And Uber and Tesla ticker ZIPP,again for $1.
In any one of these ETFs, youget 100% exposure to both stocks
that were listed there, so itis an overall 200% exposure
(37:50):
portfolio.
But there is embeddeddiversification and rebalancing
benefits by rebalancing betweeneither Bitcoin and gold or two
individual stocks within thetheme of AI, cryptocurrency and
driverless cars.
Speaker 1 (38:04):
Back to Mike Silligan , going back to the environment
that we're in now.
When you're, when you're seeinga potential regime shift and
you know you mentionedvolatility kind of expanding Do
you, do you put on a differenthat to shorten up your time
frames?
Do you use different indicators?
Talk to me about you know how atrading style maybe changes.
Speaker 3 (38:23):
Yeah, absolutely.
So there's two things that Ilook for in terms of when market
conditions change.
These are things that you knowI personally use, and the two
things are the.
I just watched that gamma flipline like a hawk, and the two
things are the.
I just watched that gamma flipline like a hawk.
So the thing with these gammaflip lines is you're going to
have various services, that kindof alter like how they
aggregate the data is going tobe a little bit different, but
(38:45):
it's kind of a zone.
And when we go under that flipline, so that right, there is a
big warning shot to me where I'mgoing to probably see my style
of trade, which is swing trading, breakout trading, trend
trading, you're going to see alot more wider range candles
like wider range volatility, Iguess we could say and a lot
more whipsaws, fake outs,shakeouts.
(39:06):
So typically in thisenvironment, my foot comes off
the gas and for the last ninedays, that's exactly what I had
to do.
The second other thing that Ilook for is just the direction
of a shorter term average, notnecessarily whether it's above
it or below it, but thedirection of where it's going.
And when you have the SPY, theSPX, q's, nasdaq, all this good
stuff below these decliningshorter term averages and you're
(39:27):
under a flip line.
It's kind of like one of thosejust ducking covers, and who
likes this the most is typicallyactive intraday traders,
because you get a lot oftwo-sided trade yeah, that makes
a lot of sense.
Speaker 1 (39:40):
By the way, folks, make sure you follow all three
of the guests here mike nuno,david kansky on the quantify
phones and, of course, mikesilva on the figure out money.
He's got a great youtubechannel.
Big fan of mike.
Uh in an in an.
There are a lot of not so goodpeople, as I've learned over the
years, and, of course, my nameis Michael Guy.
This will be an edited podcastunder Leadlag Live, which
(40:02):
thankfully continues to get alot of good attention.
Chetansky talk about just theBTGD side of things, especially
given this volatility that'sgone on in the crypto space.
Don't want to make it political, but clearly I think a lot of
people would argue it's been abit of a shit show I think is
the way to say it with theannouncement around the
(40:23):
strategic reserve and some ofthese other dynamics that are
taking place.
That rebalancing is kind ofcool that you guys are doing
with gold and Bitcoin.
Talk through that a bit.
Speaker 2 (40:33):
Yeah, I mean I people always ask me for a expectation
of price target on things suchas Bitcoin, and what I always
like to say is that I thinkit'll hit both 50,000 and
175,000 dollars.
I just wish I could tell youwhich is going to happen first,
and I kid, I don't know theexact numbers.
But all I'm saying is that youknow, a volatile asset will have
(40:54):
one thing, and that'svolatility, even if it is a
upward trending asset over thelong term.
And that's why we were soexcited to launch the Bitcoin
Gold ETF, btgd, with therebalancing embedded into the
portfolio.
You've seen it play outperfectly where, on Bitcoin's
rise to 108,000, we were, everycouple of days when the gap got
(41:15):
wide enough, trimming a littlebit of Bitcoin and buying a
little bit of gold, and viceversa.
The exact opposite has happenedsince then and this year, where
every time Bitcoin's fallen,we're able to sell a little gold
and buy some Bitcoin, and viceversa.
So the choppiness you've seenin the last couple of weeks is
very accretive to a strategythat's actually doing that
rebalancing.
And again, we found manyallocators that, like both
(41:39):
Bitcoin and gold, allocate toboth Bitcoin and gold, and every
time I ask them are you everactually rebalancing between the
two?
You know, oftentimes they'reallocated to amongst the common
theme of scarcity of assets.
Bitcoin's mining rate is lessthan 1% 0.86%.
Gold's mining rate is 1.75%less than 2%.
(41:59):
The simple question of how muchcurrency is going to be printed
by the developed world, andgenerally it's about 7% to 9% a
year, and so it's just an assetthat is replenished at a slower
rate than currencies are, andyou could argue there's just
going to be a perpetual increasein demand because of that.
(42:19):
Now, shorter term Bitcoin movesare much more based on,
obviously, as you mentioned,announcements on the strategic
reserve.
How much Bitcoin is microstrategy buying?
We do know that they've been abig portion of the Bitcoin
purchases over the last likefour months.
So day to day, month to month,it's not as easy to look at the
(42:40):
change in supply and demand.
But again, if you're planningon holding both Bitcoin and gold
for a long period of time, Ithink just seeing the last four
months, you can start to reallyrecognize the value of just
quite frankly, simplyrebalancing between those two
assets.
You know, we think if you're,for example, getting in a
retirement account and you'vebeen all equities and you want
(43:03):
to dip your toes into Bitcoingold.
This is a perfect complement toa very broad, simple equity
position.
Speaker 1 (43:08):
I remember Venuto seeing you on CBC with Bob
Pisani and you were bringing upsome of the launches and you
mentioned BTGD and I waswatching I haven't had it on my
screen and I was watching thevolume and it was like 5 shares,
10 shares, 20 shares, 10 shares, 5 shares A lot of really small
(43:29):
volume trades and it justcausing a big sort of firestorm,
I think in terms of justinitial attention.
Were you surprised by that?
That you know traditional mediaoutlets like that still have
that kind of ability to movethings for funds?
Speaker 4 (43:45):
I don't think that traditional media outlet has the
ability to move it for a badfund.
Right, like I think the mostimportant decisions in in
growing a fund is made beforethe funds ever launched.
Right, and it's it's listeningand it's it's honestly it's
figuring out what mike silvawants to buy and what uh, you
(44:11):
know, return on dividends wantsto buy and what all these
various you know people that aretalking to each other and to
the do-it-yourselfers and thefire community and designing
products based on what they'retalking about, um and where they
want to be.
Like, we get a lot more productdevelopment help for our
(44:31):
clients from Reddit and YouTubethan we do from boring old
textbooks at this point.
Right, so BTGD resonated withpeople who heard about it on
CNBC.
If I was up there talking aboutyet another large cap fund that
tilts towards value, I don'tthink it would have changed
(44:52):
anything that day.
Speaker 2 (44:54):
Also, I would say I think that's why a lot of growth
is being had from not thetraditional old money managers
in the mutual fund space becauseproducts were built in a very
specific philosophy to fit intoa very specific way of doing
portfolio constructionphilosophy, to fit into a very
(45:16):
specific way of doing portfolioconstruction.
It's just crazy how manyproduct guidelines are still
built on the idea of anallocator using like style boxes
.
Okay, this is my large-capvalue manager, this is my
large-cap growth manager.
You know, when SMCI goes frommicro-cap to knocking on the
door of the S&P 500 and thenback down real quick, you can
see why that's a very antiquatedstrategy and that's why I
(45:36):
alluded to before.
You know, having a broadexposure whether it's with
leverage or not, the S&P 500 andtrading some of these more
eclectic vehicles around it, itcan be just as advantageous of a
strategy as any financialadvisor out there, of a strategy
as any financial advisor outthere and, quite frankly,
sometimes you're able toactually move and trade quicker
with more confidence, and that'swhy we've seen retail do so
(45:59):
well in this rally.
I mean, I think there was areally amazing chart last year
that showed single stockleverage ETFs went from about $1
billion to $20 billion lastyear.
That wasn't $20 billion offlows, that was like $12, $13
billion of flows and $7 billionof gains that the retail space
primarily received in theseproducts.
(46:20):
It's not going to be an upwardtrending market straight through
all quarters, as we're seeingthis year.
There's been a lot morechoppiness, there's been a lot
more outflows, but you couldargue this is a very interesting
moment where the collectiveinvestment world on Fintwit is
almost all collectively bearishright now and you're seeing that
in flows and so it either playsout now or there's a massive
(46:42):
wall of worry climb and, quitefrankly, probably a lot of these
growth stocks that have beenhit 20, 30% for the first time
in the last couple of years,independent of the rest of the
market.
You know this is really thefirst period in a couple of
years where we've seen the megacaps take a pullback that hasn't
as affected the broader marketto a greater extent.
That's the correlation thatyou're seeing.
(47:04):
Returning to the market thatyou commented on earlier, so
either this does unwind in ashort manner or there will
likely be, as we've seen overthe last 15 years, a lot of
upside to be had.
Speaker 1 (47:15):
I think as we wrap up again, folks, please make sure
you follow Mike Venuto, MikeSilva and David Gansby Do a
quick kind of roundtable towardsthe end here, just with some
big picture thoughts on how todeal with anxiety and
uncertainty in this marketenvironment.
Mike, for you, your experience,you do this quite well.
(47:35):
Mike Silva, what's your sort ofsuggestion or advice for those
that are getting antsy about theway things are playing out?
Speaker 3 (47:44):
First, just be thankful that the last two years
are really easy.
So it's bound for markets toget a little bit more difficult
and if you want to take it alittle bit easier and still be
part of the market, you don'tneed to go YOLO every trade.
So, in terms of highervolatility, I would say make
your position size a little bitsmaller, widen your stops and
give yourself to just step aside, breathe a little bit and, most
(48:10):
importantly, in times of thisdown capture type move, you
don't need to capture everysingle move.
So it's important to reallyjust survive and then, when the
next time comes, be ready tothrive.
Speaker 2 (48:21):
No, I just wanted to thank everyone for joining us
this morning and again, if youhaven't heard, we are Quantified
Funds.
We just launched our, had oursecond launch day and launched
four single stock leveragedpairs.
$1 in any one of these fourproducts gives you 200% exposure
, 100 to each one of thesestocks.
Ape covers the crypto space forMicroStrategy and Coin Lays,
(48:43):
and Spicy SPCY cover theartificial intelligence space,
pairing NVIDIA with AMD andNVIDIA with SMCI, and Zip pairs
Uber and Tesla in a driverlesscar theme.
So thank you, guys all forjoining us this morning and uh,
final thoughts from mr venuto,the godfather godfather.
Speaker 4 (49:02):
Um, so you know these are crazy times again, like I
haven't seen volatility in awhile.
Um, you know, like I think alot of us think that we had
volatility in 2022.
We really didn't.
We just had downward markets inboth bonds and stocks, which is
way more unprecedented.
That's not a normal market.
(49:22):
It's probably been since 2015,since we've had what this is
like, kind of choppy and stuff.
So I mentioned earlier the bestdecisions on an etf are made
before it's launched, right,things like the ticker and is
there an audience and can westructure it right and what's
the right fee and all those thesame with investing.
(49:44):
So personally to me, I don'tchange anything when things get
volatile.
I I'm I'm not a trader.
However, I do own things thattrade right m foot from them
with the managed futures and thetrend following, and I
personally put all of myaccounts on public and on
(50:04):
blossom.
So everything that I dopersonally be student rest of
the world, um, and my portfolioguys can go look at it, it's in
my safe fire funds right, whichown things like btgd and they're
massively diversified.
Barely moved the last coupledays.
Obviously, a little bit ofcrypto mixed in right.
(50:26):
I also run block a big fan ofthat.
My decisions today are nodifferent than they were
yesterday.
It's just to keep buying Idollar cost average in as much
as I possibly can, whenever Ican.
These volatile days don'tbother me at all.
Speaker 1 (50:41):
That's a good place to wrap this space up.
Appreciate those that listened.
Again, I'll have this edited asa podcast, and thank you to
Chukansky, veduto and, of course, mr Mike Silva.
Thank you, everybody.
I don't think I've ever done a space this early, 9
am Eastern, but you know why not?
We'll see how big of theaudience is here.
For those that are listening,appreciate those that are
attending.
Please do me a favor like andrepost this so that the algo
tries to push this out.
Would be much appreciated.
Many of you know that I've donea lot of spaces in the past,
(00:30):
pivoted more towards video andselectively doing some spaces
for various clients of mine onthe lead lag media side.
This space is sponsored byQuantify Funds, a firm that more
and more people should knowabout that.
My friend, mr David Jankowskiis the man behind.
I think this is going to be atimely discussion from a lot of
perspectives.
I have myself been very loudabout the last two and a half
(00:54):
three weeks in what seems to bea return to a more normal market
, and when I say normal market,I'm talking about correlations
returning to the way they werepre-2020.
And we're going to be touchingon that how to think through the
volatility that's playing outhere and new ways of trading
through it.
So I see Mr Mike Silvers here.
Mike, if you want to come up,feel free anytime.
(01:15):
You know you're more thanwelcome Anybody else that's here
that wants to engage, askquestions, just interact.
Don't hesitate to click on thatbottom left micro request
button.
With all that said, my name isMichael Guy, a publisher of the
lead Lagerpore.
Joining me is with me is MrDavid Chikansky Quantify Funds.
David, I believe you're there.
I'm here.
Good morning, mike.
How are you Good?
I'm good man, I'm good.
(01:35):
By the way, for those that arenot aware or never met Mr
Chikansky in person, the guy isripped.
Mr Chikansky in person.
The guy is ripped, and I'mtrying to become more like him.
I'm waking up every morning at4 am.
I look to him as like a guythat I want to kind of aspire to
, and he got some prettysuccessful funds, which we'll
talk about too here.
But, dave, introduce yourself.
Who are you?
What's your background?
(01:56):
What have you done throughoutyour career?
Speaker 2 (02:02):
What are you doing right now of Quantify Funds?
Today is our second launch day.
We launched our first ETF inthe fall, the Bitcoin Gold ETF,
stkd.
Bitcoin BTGD is the ticker andtoday we are launching four
stock pairs in the AI, cryptoand driverless cars space.
A lot of people have adopteduse of leverage ETFs over the
(02:27):
last couple of years, mainlybecause, quite frankly, it's
been a lot more costly to getmargin on a platform level basis
and we think a lot of that gaphas been filled in by the
leverage ETF space.
So we're very happy today tolaunch our next four ETFs.
First is stacked MSDR and coin.
So for $1 in the ETF you get $1of exposure to both
(02:49):
MicroStrategy and Coinbase.
Ticker APE to A-P-E-D, which isour main crypto themed ETF
launch for the day.
We have two in the artificialintelligence space, both
stacking NVIDIA, one with AMDand one with SMCI.
Nvidia and AMD is ticker LAYSL-A-Y-S.
Nvidia and SMCI is tickerS-P-C-Y.
(03:12):
And lastly, but is thedriverless car theme, which is
Uber and Tesla 100% exposure toboth Uber and Tesla in the same
ETF with the ticker Z-I-P-P.
So these are meant to betrading tools but also can be
held for longer than traditionalleverage ETFs.
They don't have a daily resetoutlined in their perspective as
(03:34):
a prospectus as some of theseother leverage ETFs do.
So these are great ETFs to adda little leverage to your
portfolio.
Trade through earnings seasonon a common theme add a little
leverage to your portfolio.
Trade through earnings seasonon a common theme.
We've seen a lot of you knowoutside of really the last three
months dominance by the megacaps in all sectors and
(03:55):
industries and the concept tiers.
You can get really goodconcentration in some of the top
names within the theme orsector and allow us to rebalance
between the two, adding alittle bit of benefit of
diversification in there.
Speaker 1 (04:04):
First of all, I don't think FinTwit has any clue what
goes into launching a fund.
So before we get into thecurrent environment, the
strategies, I want to talk aboutthe product development process
for you.
You had a pretty successfullaunch with BTGD, the Stacked
Bitcoin Gold Fund.
Talk me through the process ofdeveloping a fund.
Speaker 2 (04:29):
Yeah, it's a very long, timely, stressful and
costly process.
You can get an ETF frominception idea to market really
in about 100 days.
The more complex and unique itis, sometimes it can take a
little bit longer.
We have partnered with Best ofBre ETF white labeling platform
title.
Mike the CIO is on the callhere, listening as well.
(04:51):
It's much easier to come tomarket with a partner than
trying to create your own trust,even if you're a multi-billion
dollar firm.
There's just so much logisticsthat go into it the quality and
caliber of the actual lawyerswriting your prospectus with you
, et cetera and making sure youcan get something through the
SEC in a very clean process.
And that's just the start of it.
(05:12):
And from there, just reallygetting the messaging out is
equally as complex from acompliance perspective.
Dealing with FINRA and the SECand trying to make sure
everything is clean and aboveboard is a very timely and
costly process, but it's also avery rewarding one.
I've been in the ETF industryfor about 20 years and seen the
evolution and it was a lot moredifficult 15 years prior than it
(05:36):
is today, while it's still very, very difficult and complex and
takes a lot of execution and alot of avenues in sync
simultaneously.
At the same time, if you dowork with really good partners,
it can be done in a veryrelatively cost effective
manager process and timeline.
So we filed for this inDecember and we're now launching
(05:59):
in early March.
And given we are trying to donew, innovative things in this
space, as you alluded tostocking individual stocks on
top of each other here, you knowwe're very, very proud with the
speed at which we've been ableto bring these to markets.
And yeah, it's not an easyprocess.
It's an evolving process.
I'd say the compliance side ofit is the most confusing, quite
(06:21):
frankly, and it makes it very,very hard to get the messaging
out.
So we do do very muchappreciate any support you have
in reposting any material we doactually get through this crazy
compliance world?
Speaker 1 (06:34):
Is it fair to say that people's perception around
around the industry is wrong,meaning they don't understand?
It's not really about being aportfolio manager.
It's more about being a productdeveloper.
Speaker 2 (06:45):
It's a little bit of both, and it depends what kind
of products you're bringing tomarket.
There's a lot of successfulentrepreneurs that have brought
what I like to call trust meproducts to the market, where
you have to build up your owncredibility as a manager in the
space and really sell on yourown ability to maneuver in
different markets.
We've seen the wave of successfrom people such as Cathie Woods
(07:06):
and a lot of other follow-onsin that space too.
But it's equally as complex toactually create a what we like
to call a trading vehicle, or avehicle that you could almost
understand, and understand whatyou're going to expect from it,
in 30 seconds.
So can I look at this product?
Can I see its investmentphilosophy and its outline,
(07:26):
understand it, comprehend it,understand how I could
potentially use it in myportfolio in a very, very quick
manner?
And that's equally as difficult, especially if you're trying to
do that in an innovative way,offering new things that the
marketplace hasn't seen before.
Speaker 1 (07:39):
It looks like Mike is back.
Let's see if, mike, that'sworking for you.
Hey, mike, can you hear me?
Yes, there we go.
So I'm waiting for Mike Silvato launch the Trust Me Bro ETF,
to play off of David's pointthere.
But, mike, go ahead, introduceyourself.
Speaker 3 (07:53):
How's it going everybody?
Michael Silva, here I trademainly.
Most people know me from theYouTube.
I have a channel there calledFiguring Out Money where I try
to do daily stock market briefs,give my analysis on the market
and then actively trade it.
Speaker 1 (08:09):
So the nice thing with this is that we're going to
have a discussion aroundtrading and then vehicles to
trade with.
You know product developmentand then vehicles to consider,
you know, in this kind ofenvironment.
So I want to keep going to you,mike, on this before we get
into the opportunity set.
I'm curious what your take ison the last three weeks here of
volatility.
I don't know if everyonesuddenly is bearish.
(08:31):
I don't know what people think.
Even if I knew what peoplethought, I don't think it
matters, because it depends onhow they're positioning.
What have you been doing in thelast several weeks here as
markets have gotten more violent?
Speaker 3 (08:41):
Yeah, so now nine full trading days since we
slipped below the flip line, andthat is one of the elements
that I use for understandingwhen market conditions change.
So when we do slip under this,when the S&P 500 slips under it,
we typically see an expansionof volatility.
At least, that's kind of wheremy forecast goes to.
(09:01):
And knowing that volatilityexpands, right, I try to keep my
bias as most undirectional aspossibly.
But I look to see what themarket's pricing as far as a
range of risk goes, to reallyhelp me identify some key levels
in the market.
And since then, I mean, it'sbeen yeah, it's been some rough
volatility.
However, like even this tradingweek, so far it's all within
(09:23):
the market's expectations.
The market priced in for theSPY about a $12 expected move,
the S&P 500 priced in about a$120 expected move and we
slipped outside of that rangebut came back in it.
Now we're right back down to it.
So there's nothing.
The market's still well withinits expectations right now of
what it priced in the prior week.
Market's still well within itsexpectations right now of what
it priced in the prior week.
Speaker 1 (09:44):
How important is it for you from a trading
perspective to have a very sortof tight, relatively small
number of things to tradeMeaning?
I think the challenge for a lotof people is that they end up
looking at a huge watch list ofa bunch of stocks and a bunch of
ETFs and they maybe get someanalysis paralysis or they get
distracted because of the numberof things they're looking at.
And do you typically have kindof a short list of things that
(10:07):
you actively go in and out of?
Speaker 3 (10:09):
It becomes a short list.
However, it starts kind of wide, so I'll cast a wide net and
then I'll hone it in.
I like to look for I'm mostly atechnical trader, I add some
basic fundamental stuff in thereevery once in a while, but then
(10:30):
I look for the stocks that arecontracting, that you see period
of volatility where they'rekind of tightening up, and I try
to hop on the right side whenobviously volatility expands and
by doing so, if you're right,you can catch a nice move.
However, if you're wrong, youshould understand where that
risk level is and be able to getout relatively quick.
Speaker 2 (10:46):
Mike's point there about everyone seemingly being
very bearish in today's world.
We actually are collecting andwe'll start issuing research on
flows in the leverage ETF space.
But if you look over the lastone month and you kind of sum up
all the products by categoryand equate for the 2x and 3x and
long and short flows, et cetera, Bitcoin leveraged ETFs have
(11:09):
had over $4 billion of outflowsover the last month.
20-year treasury leveraged ETFshave had $2.4 billion of
inflows and Qs have had almost$15 billion worth of outflows
over the last month in theleveraged ETF space.
So it really shows kind of backto what you said there, Mike,
that a lot of people, while Ithink there's some reason to be
(11:29):
bearish, for sure it seems likethe entire investment community
in consensus is bearish at thesame time, which always makes me
think that we might be early onthat move and you know, an
upside wall of worry climb canbe pretty significant while
waiting for that bearish play tocome to fruition.
Speaker 1 (11:50):
Let's talk about the stacked new funds that you're
bringing to market, because thatrelates very much to the idea
of how many things a traderlooks at.
There's been a lot ofinteresting demand for a lot of
let's call them more retail typeof demand, right?
So we've seen a proliferationof high yielding cover call deep
(12:11):
out of money put to generateyield type of strategies.
We've seen a proliferation oflevered single stock funds.
What you're doing is different,david, in that it's not
traditional, which is probablywhy you'll be successful.
You have to find that whitespace where Vanguard and
BlackRock are not playing.
(12:32):
Talk to me about sort of thereasoning for you in terms of
creating these stacked funds.
Speaker 2 (12:39):
Yeah, this is a very nice marriage between an
institutional strategy ofpackaging leverage in a 40 act
type product and fun tradingtools, kind of, and finding that
middle ground between the two.
As you alluded to, there's beena lot of success in individuals
and hedge funds and RAs tradingleverage ETFs, single stock
(13:01):
leverage ETFs, etc.
But oftentimes we find thatthey're really investing in a
theme more so than an individualname, and it's just a lot
harder to depend on yourself tomake those really hard
rebalances.
So think, if you're going intoearnings week and you really
want to bet heavily on, forexample, artificial intelligence
companies, et cetera, chipcompanies, choosing two, and are
(13:24):
balancing between the two, andyou've, you know, let's say, amd
reports first and pops, thewhole rest of the space pops as
well Are you going to actuallyrebalance out of AMD into the
other names that are haveearnings later, in that in that
quarter the rebalance all getsdone for you within this?
So this is a way to mix bothlike what they call capital
efficient and portable alphastrategies.
(13:46):
That was, you know, in the 40act product, the least first
release to market by PIMCO, Ifyou remember the PIMCO stock
plus funds, and then in the ETFspace over the last couple of
years has gained a lot ofadoption with launches from
wisdom tree, uh return stackETFs, which, uh, which is a
partner of ours on these, andobviously our first Bitcoin gold
(14:06):
product, and these are a littlebit more high volatile versions
of all that.
These, I think, are the highestvolatility of any portable
alpha or stack products in themarketplace.
But volatility can be very good, especially for traders when
you're trying to find thatmomentum swing.
This is a very good way to playthat AI theme, the driverless
car theme, crypto theme, or aweek, a month, three months, et
(14:31):
cetera.
You have a little moreconfidence in holding this
long-term than a traditionalleverage ETF.
Speaker 1 (14:36):
Maybe I missed it, but sorry.
I apologize.
But what is the rebalancinginterval?
What causes the rebalance?
Speaker 2 (14:42):
So it is an active fund.
We are targeting somewherebetween a 5% and 10% drift.
So we anticipate rebalancing acouple of times a week and also
on creations and redemptions.
But anytime there's a big move,for example through like an
earnings period, you willabsolutely see rebalance at that
point.
So, doing that difficultrebalance in your portfolio,
which we've been talking about alot with our first ETF
(15:03):
Difficult rebalancing yourportfolio, which we've been
talking about a lot with ourfirst ETF, the Bitcoin and gold
ETF, btgt we launched that rightbefore the election.
If you think about, bitcoin ranfrom about 70,000 up to 108,000,
has fallen since and gold hastaken up the slack.
Are you doing those difficultrebalancing between these two
assets?
In that case, that's a scarcityplay, a currency debasement
play.
We find a lot of allocatorsallocate to both Bitcoin and
(15:26):
gold, but they're notrebalancing between them.
Similarly, if you are bettingon the AI theme, are you doing
those difficult rebalancesbetween your favorite names in
the space?
So these are prepackagedvehicles that are offering this
in an ETF that you don't have tothink about and is being done
for you.
Speaker 1 (15:42):
Mike Silva, I'll go to Venuto in a second.
I want to hear your thoughts onrebalancing.
I think when people think abouttraders, they think that
they're going in and out fullyObviously.
It's much more nuanced thanthat.
Do you, in the management ofyour portfolio, do any kind of
more systematic type ofrebalancing between different
investments, different tradeideas?
Speaker 3 (16:04):
As far as systematic goes, no, I don't have a
systematic, necessary process.
Once I see a trade set up, I'llinitiate what I'm looking for
as far as risk for thatindividual one and go from there
.
I like this idea, these funds,though, and being a little bit
more concentrated, so can't waitto kind of dive specifically
into those.
(16:24):
But for me right now, when Iinitiate more specifically so
people understand, I do have adifferent process for swing
trading, day trading and theninvesting right.
So it's all separate across theboard for me.
But when I'm swing trading,I'll initiate the trade based
off of the setup and what I see,and the risk will be set, and
I'll adjust the risk as thetrade either goes in my
(16:46):
direction Actually, that's theonly time that I'll adjust the
risk If it goes in my direction,if it comes against me, then
it's just going to stop me, mrVerduto it's been a minute.
Speaker 4 (16:54):
How are you doing?
Oh, my goodness, it's been awhile.
It's been a minute.
Exc Markets are all crazy andwe've got some new ideas coming
out here.
So I'm the co-founder of Tidal.
We help people launch, grow andoperate ETFs.
We've done that for Guyad.
We've done it for DavidWeisskopf's down there.
(17:17):
He does it with us too.
Most of the people you guyshave referenced today we've
helped.
Today we're currently servicingabout 200 ETFs and about $30
billion Real.
Excited about these ideas.
You know, just the idea thatyou can get leverage that
(17:37):
doesn't decay, the idea that youcan, you know, stack two stocks
.
Obviously, me being more of acrypto person, I'm mostly
excited about the micro strategycoin, um, and it's just a
interesting way for traders toget exposure uh, dave, going
back to you, um, we have a newproduct launch.
Speaker 1 (17:59):
How do you even get people to be aware of it?
I mean, obviously we're doing aspace, so part of this is is
awareness that.
But let's face it, the ETFlandscape is um incredibly
crowded.
Speaker 2 (18:09):
Yeah, uh, you have to kind of attack it from all
angles.
You send out a press release inthe morning, you talk to
reporters, you do some PR work,you start getting the Google SEO
engine going.
You start getting Twitter andReddit marketing going we're
doing Twitter spaces here enginegoing.
You start getting twitter andreddit marketing going, we're
doing twitter spaces here.
But it's really just not onething.
You have to do all things atthe simultaneously, which is
(18:31):
kind of what I alluded to.
The difficulty of launching anetf is just a lot of things that
have to happen at the exactsame time.
Um, but if you do it well andyou put it out there and you
have a clean message, uh,obviously the marketplace will
decide what they want to trade,and that's up to the marketplace
and we can have a pretty goodjudgment of what we think might
(18:51):
do well.
But really you just have tokeep honing in your messaging
and getting it out in front ofpeople as much as possible.
I don't think it's toodifferent than, quite frankly,
an e-commerce sale in that youneed to see it a number of times
and think about it before youwill consider it and maybe that
fourth, fifth, sixth time yousee it.
If it's an idea that doesresonate with you, maybe then it
(19:11):
ends up on your watch list.
We're always available forfollow-on calls with advisors
and individuals to talk indetail about how these products
work.
So sometimes that'll lead tophone calls with allocigators
and then, if it's something theywant to begin trading, we
hopefully start seeing someflows from it.
Speaker 1 (19:28):
Mike Silva, how important is longevity for you
of a fund?
How important is trading volume?
You know I I'm so myself alwaysblown away that people don't
understand that volume in an etfdoesn't really mean very much
as long as you put a limit order, as long as the underlying is
liquid.
You know that's, that's whatmatters, not the, not the actual
(19:49):
thing that's going on at themoment in the end of the ticker.
Speaker 3 (19:52):
But you know, for as for you as a trader, how do you
think through all that for me asa trader?
How do you think through allthat For me as a trader?
I do find it important to haveliquidity.
I do prefer tight bid-askspreads, and if I'm working with
something that's a little bitwider, I have to use obviously
more limit-style orders Ontighter spreads.
(20:12):
I'm okay with a different typeof order.
Mean then, as far as volumes go, I mean it really depends,
right.
So if it is more of a longerterm hold and it's in an etf
that has just a decent amount ofvolume, it doesn't need crazy
amounts.
I'm fine with it.
But for more of the shorterterm intraday trading, I like to
(20:33):
see significantly moreliquidity, and that's the that's
the challenge, right, mike?
Speaker 1 (20:38):
I mean, you've got to kind of get people to be aware
of a fund and there's kind of achicken or egg dynamic where
they want to see the volume.
But for there to be volume,people have to actually not need
to worry about volume.
Veduto, you have been throughenough of these in your career
and you've launched a ton ofdifferent products under title.
Uh, talk me through, sort of um, your initial impression of the
(20:59):
idea when chikensky brought itup to you um and um.
Speaker 4 (21:03):
It's just such a natural extension of the bitcoin
and gold concept.
Um, and seeing theinstitutional versions that you
know, uh, cory had done and andhow that was resonating with
that audience.
Obviously, with these, theaudience is people who are more
do-it-yourselfers, right, likethere's this thing called
(21:24):
statement risk, where financialadvisors aren't going to put the
ticker aped in their clientportfolio.
But it draws the attention ofthe people who are, you know,
maximalist and and love themicro strategy and things like
that.
So Noddick's been writing a lotabout this lately.
He calls them, I think, blackhat products.
(21:46):
That's fine, it's.
It's not, it's not our job tosay this is how you should
invest your money.
It's not our job to say this ishow you should invest your
money.
Silva can tell people thatright.
Or a financial advisor can tellpeople that what we can do is
provide really capital efficienttools, tax efficient tools,
(22:10):
things that give leverage ormargin that would be expensive
for you to get on your own.
Instead, we package it up andrebalance it and do all the
stuff in the background.
So, yeah, these are activelymanaged.
The value of the activemanagement is rebalancing, it's
tax efficiency, it's things likethat.
It's not that we're makinginvestment decisions on a
(22:33):
day-to-day basis and somethinglike this to help In the ETF
world.
These are exposures and there'sbeen lots of great examples of
exposure being the way tosuccess, right.
I think ETF started 30 yearsago as a better way to get
exposure to the S&P 500, right.
Then you have leaps and boundswhen you have a better way to
(22:54):
get exposure to the S&P 500.
Then you have leaps and boundswhen you have a better way to
get exposure to gold in 2005.
And obviously the mostsuccessful launch ever is the
Bitcoin ETFs a little over ayear ago, exposure to Bitcoin
right.
So this is just exposure toleverage that's hard to get on
two stocks, just exposure toleverage that's hard to get onto
(23:22):
stocks.
And that's the value prop thatyou're handing people a tool to
make things work.
I was receptive and I'm excitedabout the way it's been put
together and we'll see how themarket takes it today.
Speaker 2 (23:32):
Yeah, I think for a long time our industry has said
that, you know, the intelligentinvestor is the institutional
RIA, and what we've really foundis, I mean, if you look at some
of the forums on Reddit, someof the back tests that these
people are doing and thediscussions they're having, in
many cases I think some of theretail world is doing a much
higher level of due diligence ontheir portfolio construction,
(23:54):
and you're seeing it with theasset flows into vu and spy, and
while all of these, likeleveraged products, are gaining
steam as well, the real gorillain the room is just the s&p 500
related products that just keeptaking in massive, massive
assets, and so what we think isa lot of the retail space is
just, quite frankly, doing thismore boring thing buying a lot
(24:16):
of uh, s&p 500, whether it'sthrough SPY or VU, or I think VU
just finally passed SPYrecently and these are the, you
know, these types of leveragetrading tools are how they're
rounding up their portfolio, howthey're expressing their
opinions and, quite frankly, wethink they're doing it in just
as an advanced, if not moreadvanced, way than some of the
(24:38):
advisory world that we've seenover the last 20 years.
These guys are really trying tocrowdsource investment ideas
from people such as Mike on thiscall, et cetera, and put them
into action and act quickly andoftentimes a lot quicker than
financial advisors are willingto act in their client books,
and I think that's why you'reseeing a lot more adoption from
(24:58):
the retail space in these typesof products versus from the RIA
space, but that might changeover time as well.
Speaker 1 (25:05):
How is that leverage achieved?
How are you achieving that?
And for us, going 100%.
You know the two stocks.
Speaker 2 (25:10):
Yeah.
So with the single stock, withthe leveraged stack single stock
world, there are no futures onindividual stocks, so the
primary source of leverage hereis through swaps.
In some cases we will alsoconsider using options as a
source of leverage Coming out ofthe gates.
Right now, all of theseproducts, all the leverage is
received from swap agreements,so it's again a much more
(25:31):
cost-effective form of leveragethan you can get traditionally
as an individual investor onyour brokerage account, and
that's why we think there's alot of appetite for these types
of products, for B2GD, theBitcoin and gold product, that
we're accessing our leverage tothe futures market.
Speaker 1 (25:49):
Mr Silva, when you trade, do you do anything on the
leverage side?
Are you doing margin?
Are you levered funds?
I mean you know?
And if you do, how do you, howdo you manage the risk there?
Speaker 3 (25:59):
Yeah, I definitely use those leverage funds very
simply, so I like to use them.
Once again, it depends oneither if it's a day trade or
swing trade.
When it comes to swing trading,I like to use the leverage
funds because it'll allow me tokind of keep some more capital
to the side and I typically willjust lessen the positions a bit
.
But if it is a really, you know, a-plus setup, concentrated
(26:21):
trade, I can go a little bitheavier.
I named the space.
Speaker 1 (26:24):
It's time to lock in, and I've been, in my typical
fashion, posting that a littlebit ominously, because I do
think that this could end upbeing a much bigger volatility
event than people realize.
I think it goes beyond Trump,because I keep looking at the
end and I keep thinking tomyself this is going to explode
again, you're going to have oneof those scares.
(26:45):
I have been early on the Japanthesis, but I still maintain
that the end point remains thesame.
It's just about the when, and Isay that not as a perma bear, I
say that as a logical humanbeing, looking at the situation
that is before us, beyond just achart and even beyond the yen
(27:07):
itself, the way it looks, justlooking at Japan's inflation
picture.
So, if we are in a growth scare, a more volatile environment.
Dave, what's sort of thethinking from a communication
perspective when it comes tobringing funds to market in what
looks like it could be a cycleshift?
Speaker 2 (27:27):
Well, first off, I'll say more granularly over the
long term I don't disagree withyou, but I do think the same
statement can and has been saidfor for years, not from yourself
, but from other practitionersin the marketplace in fairness
it's been said for years, by metoo.
Speaker 1 (27:42):
Now, in fairness, I also said gold.
Speaker 2 (27:44):
Yeah, I got very bullish on gold, october 2023
and all this, but anyway, yeahyeah, I mean, that's the beauty
of the market there's always twosides of every coin, um, and
you know, while I do thinkthere's a lot of fundamental
larger term risks to our overalleconomy, actually trying to
call when that plays out can bevery much fool's game.
On a day to day basis, these are, you know, standard deviations
(28:06):
that can be plus or minus threeto five years in some cases, and
so, whether it's a short termbounce back trade or a longer
term trade, we created thesevehicles for that upside swing
right.
So, quite frankly, if yourtimeline is off by like six
months, there's a lot of upsideto be had over the next three to
four months, as we've seen overthe last couple of years.
And these are products that,while you know they do have a
(28:30):
lot of volatility, are built andconstructed so that you can put
them in your portfolio andmaybe not have to watch them
every single hour or everysingle day, because there is
this rebalancing feature in them, and so they make them more
suitable for what we like tocall leverage for the long run,
and so they're way to add alittle bit of leverage to your
portfolio and in an investmentthesis behind, for right now you
(28:52):
know, driverless cars, ai andand crypto, etc.
Um, and doing so in a way that,like you get that same oomph
with a lot of these leverageetfs, but you do have a little
bit more assurance that there'ssome level of rebalancing going
on within the product thatallows you to hold it and have
less decay, as mike the new topoint it out doesn't that?
Speaker 4 (29:11):
doesn't that resonate for you somehow?
Speaker 1 (29:13):
uh, yeah, I mean I kind of have a.
It's funny that that said so.
Um, I'm actually starting at 10, am doing ama.
Ask me anything on reddit onthe subreddit on uh leverage,
etfs exactly on that paperleverage for the long run.
So, yes, I, uh, I can certainlyrelate to the idea of tactical
leverage.
I do think what's missing thisis.
Speaker 2 (29:34):
I will say there's tactical leverage.
This is structural.
We're not trying to do anythingother than offer 100 exposure
to both so that when you look atthis, you should have a pretty
good assurance of what did, forexample, micro strategy do today
?
What did coinbase do today?
Add those two together.
That's generally what it shouldprovide you on a day-to-day
return yeah, no, I think that'sfair.
Speaker 1 (29:55):
now, is it also also fair to say that, if you're
going to do this type of aproduct, they have multiple
funds covering multiple pairs ofstocks you want to have, as as
you want to have, stocks thatare independently volatile of
each other but in general havehigh volatility.
But that, that rebalancingaspect, I think, is where the
alpha really gets to beinteresting.
Speaker 2 (30:15):
There's the rebalancing aspect, but you also
want to make it investable on athematic basis too.
So you know some pairs havebetter diversification benefits
than other.
But all pairs are better thanjust leveraging the same stock
on top of itself, right, even ifit's just the magnitude of
(30:38):
movement through an earningsperiod, of how, for example, amd
might do versus NVIDIA, youknow, on whatever earnings day
that stock pops, it's likelygoing to pop more than the rest
of the category.
There's going to be some sortof diversification benefit, even
in very trending stocks orcorrelated stocks, to do that
rebalance between the two.
So our most diverse basket isthe Bitcoin and gold ETF, btgd.
The correlation over a 10 yearperiod between Bitcoin and gold
(30:58):
is about 8 percent and it variesover time, and so there's
varying level of benefits fromthe rebalancing mechanisms.
But they're all superior tojust stacking the same product
on top of itself.
And that's not to say you can'ttrade leverage ETFs.
But I think the people who doit well are constantly
(31:19):
rebalancing their portfolio toget that exposure they want, and
this is a way to have that samesort of oomph and leverage in
your portfolio, while we aredoing a lot of the mechanics
behind the scene, to do therebalancing within the products
as opposed to making you do itat the end of the day, to true
up your intended exposure foryour overall portfolio.
Speaker 1 (31:39):
Speaking of mechanics .
I think that's a goodtransition to Venuto on the tax
efficiency side of how ETFs work.
Part of this AMA I'm doing ispeople are saying, well, if you
were to create a leverage forthe long run taxable fund at
some point, there's no benefitto just doing it yourself.
They're not factoring in theheartbeat trades.
So maybe Venuta might beinteresting for the audience to
do a little bit of an educationlesson on how that tax
(32:02):
efficiency for an active ETF isachieved.
Speaker 4 (32:04):
Sure, I was saying earlier, etfs are about 30 years
old.
The first one was designed tobe SPY, right, the S&P 500.
And it was designed for traders, right.
There was no thinking at allabout buy and hold ETFs when
these things were created.
The functions of it, the factthat it has this ability to
(32:27):
create and redeem sharesintraday, which was necessary to
make it a really cool productfor traders ended up with a
happy accident that they didn'tfigure out till three, six, nine
months later, which was hey, ifwe can create and redeem
intraday, we don't have toredeem the stocks that are down.
(32:47):
We can sell those and realize aloss in the portfolio, but
let's redeem all the stocks thatare up in that basket.
But let's redeem all the stocksthat are up in that basket and
(33:10):
therefore the actual sale of the10 stocks that are up the most
doesn't happen in the fundtrading right, and they have an
exemption.
So, essentially, the ETFwrapper is designed
unintentionally in a way whereit gets out of the big problem
that SMAs and hedge funds andespecially mutual funds have,
which is you can often be forcedto pay taxes on gains you
(33:33):
didn't even receive.
They could be in there for 20years and you buy into a mutual
fund and the next day they sellApple that was up 300% over
those 20 years.
You're going to get a tax bill.
It's ridiculous.
It's antiquated technology.
So the happy accident of theETF structure makes it
(33:55):
substantially more tax efficient.
Now comes the slight disclaimerwhen it comes to these funds.
These are using swaps.
It's a little bit more complex.
The rebalancing can be donewith certain things, but it's
not as tax efficient as atraditional kind of buy and hold
, like index.
(34:16):
That said, anything withleverage is going to have those
concerns right, because you'redoing one thing to get above the
other.
So that's kind of the processand it's pretty amazing.
There's very few guarantees inthe world of finance, but for a
(34:39):
taxable investor I can almostguarantee that the same strategy
in a mutual fund and in an ETFyou're going to get a better
return in the ETF after taxes.
Speaker 1 (34:51):
Dave, I don't know if you want to add some thoughts
on that.
Speaker 2 (34:53):
Yeah, I mean.
So you have to look at like,how tax efficient would a
strategy like this be otherwise?
And what are the costs ofleverage you're paying?
And really the reduced cost ofleverage here we think still
makes it worthwhile for ataxable investor.
And obviously if you're doingthis in retirement assets, you
don't have any issues with taxes.
(35:13):
So leveraged ETFs as a wholeare not as tax efficient as a
plain vanilla equity ETF, butthey still can be pretty tax
efficient compared to mutualfunds and hedge funds and SMAs
really add no discredits versusthose.
So you're on an even playingfield to everything else.
You're just not as taxefficient as a traditional
(35:34):
equity ETF that can have, quitefrankly, every single stock in
its portfolio go up.
Have the managers decide theywant none of those exposures by
the end of the year and andrecognize there's no capital
gains for the shareholders inthat rotation.
Speaker 1 (35:47):
Mike Silva, how, as a trader, that's always the
challenge.
Right, it's like you might havegreat trading gains but if
you're doing a taxable accountyou got to maybe outperforming
by just not trading at all.
Do you think about taxes at allwhen you're trading, and what
kind of accounts are you tradingin?
Speaker 3 (36:04):
Yeah, I do think about taxes.
I see it every year.
So once again, it's differentfor every account.
So when I think of shorter termtrading, first off, if you're
paying taxes, that means you'remaking extra money.
That's how I look at it.
I don't give out tax advice.
I have a CPA for all that goodstuff, but I definitely have my
longer term accounts structureddifferently.
(36:26):
So I'll trade some of my swingtrading is done through my Roth
and then I have some shorterterm accounts that I'll just pay
whatever's due.
And then there's also obviouslyother products that have tax
advantages.
So it's a pretty complex worldand I tend to stay away from it
and let the professionals kindof help me, help guide me
(36:48):
through all that stuff.
Speaker 1 (36:49):
Chicanxie.
So you've got these four thatare launching today, I think
just for those that are new here.
Maybe repeat those, but alsotalk to me about kind of future
plans, assuming that these aresuccessful.
And you know, I think if we'rein a volatile environment then
the rebalancing will be evenmore beneficial as a backdrop.
But you know other things thatare coming down the pipeline
from Quantify Funds.
Speaker 2 (37:08):
Absolutely so.
Again, my name is DavidChukansky.
I'm the founder and CEO ofQuantify Funds.
We just launched our second,third, fourth and fifth ETF.
Today, our first ETF launchedin the fall to leverage Bitcoin
on top of gold, ticker BTGD.
And today we launched fourstock pairs in the AI space
NVIDIA and SMCI ticker SPCY.
(37:28):
Nvidia and AMD ticker LAYS.
Microstrategy and Coinbaseticker 8APED.
And Uber and Tesla ticker ZIPP,again for $1.
In any one of these ETFs, youget 100% exposure to both stocks
that were listed there, so itis an overall 200% exposure
(37:50):
portfolio.
But there is embeddeddiversification and rebalancing
benefits by rebalancing betweeneither Bitcoin and gold or two
individual stocks within thetheme of AI, cryptocurrency and
driverless cars.
Speaker 1 (38:04):
Back to Mike Silligan , going back to the environment
that we're in now.
When you're, when you're seeinga potential regime shift and
you know you mentionedvolatility kind of expanding Do
you, do you put on a differenthat to shorten up your time
frames?
Do you use different indicators?
Talk to me about you know how atrading style maybe changes.
Speaker 3 (38:23):
Yeah, absolutely.
So there's two things that Ilook for in terms of when market
conditions change.
These are things that you knowI personally use, and the two
things are the.
I just watched that gamma flipline like a hawk, and the two
things are the.
I just watched that gamma flipline like a hawk.
So the thing with these gammaflip lines is you're going to
have various services, that kindof alter like how they
aggregate the data is going tobe a little bit different, but
(38:45):
it's kind of a zone.
And when we go under that flipline, so that right, there is a
big warning shot to me where I'mgoing to probably see my style
of trade, which is swing trading, breakout trading, trend
trading, you're going to see alot more wider range candles
like wider range volatility, Iguess we could say and a lot
more whipsaws, fake outs,shakeouts.
(39:06):
So typically in thisenvironment, my foot comes off
the gas and for the last ninedays, that's exactly what I had
to do.
The second other thing that Ilook for is just the direction
of a shorter term average, notnecessarily whether it's above
it or below it, but thedirection of where it's going.
And when you have the SPY, theSPX, q's, nasdaq, all this good
stuff below these decliningshorter term averages and you're
(39:27):
under a flip line.
It's kind of like one of thosejust ducking covers, and who
likes this the most is typicallyactive intraday traders,
because you get a lot oftwo-sided trade yeah, that makes
a lot of sense.
Speaker 1 (39:40):
By the way, folks, make sure you follow all three
of the guests here mike nuno,david kansky on the quantify
phones and, of course, mikesilva on the figure out money.
He's got a great youtubechannel.
Big fan of mike.
Uh in an in an.
There are a lot of not so goodpeople, as I've learned over the
years, and, of course, my nameis Michael Guy.
This will be an edited podcastunder Leadlag Live, which
(40:02):
thankfully continues to get alot of good attention.
Chetansky talk about just theBTGD side of things, especially
given this volatility that'sgone on in the crypto space.
Don't want to make it political, but clearly I think a lot of
people would argue it's been abit of a shit show I think is
the way to say it with theannouncement around the
(40:23):
strategic reserve and some ofthese other dynamics that are
taking place.
That rebalancing is kind ofcool that you guys are doing
with gold and Bitcoin.
Talk through that a bit.
Speaker 2 (40:33):
Yeah, I mean I people always ask me for a expectation
of price target on things suchas Bitcoin, and what I always
like to say is that I thinkit'll hit both 50,000 and
175,000 dollars.
I just wish I could tell youwhich is going to happen first,
and I kid, I don't know theexact numbers.
But all I'm saying is that youknow, a volatile asset will have
(40:54):
one thing, and that'svolatility, even if it is a
upward trending asset over thelong term.
And that's why we were soexcited to launch the Bitcoin
Gold ETF, btgd, with therebalancing embedded into the
portfolio.
You've seen it play outperfectly where, on Bitcoin's
rise to 108,000, we were, everycouple of days when the gap got
(41:15):
wide enough, trimming a littlebit of Bitcoin and buying a
little bit of gold, and viceversa.
The exact opposite has happenedsince then and this year, where
every time Bitcoin's fallen,we're able to sell a little gold
and buy some Bitcoin, and viceversa.
So the choppiness you've seenin the last couple of weeks is
very accretive to a strategythat's actually doing that
rebalancing.
And again, we found manyallocators that, like both
(41:39):
Bitcoin and gold, allocate toboth Bitcoin and gold, and every
time I ask them are you everactually rebalancing between the
two?
You know, oftentimes they'reallocated to amongst the common
theme of scarcity of assets.
Bitcoin's mining rate is lessthan 1% 0.86%.
Gold's mining rate is 1.75%less than 2%.
(41:59):
The simple question of how muchcurrency is going to be printed
by the developed world, andgenerally it's about 7% to 9% a
year, and so it's just an assetthat is replenished at a slower
rate than currencies are, andyou could argue there's just
going to be a perpetual increasein demand because of that.
(42:19):
Now, shorter term Bitcoin movesare much more based on,
obviously, as you mentioned,announcements on the strategic
reserve.
How much Bitcoin is microstrategy buying?
We do know that they've been abig portion of the Bitcoin
purchases over the last likefour months.
So day to day, month to month,it's not as easy to look at the
(42:40):
change in supply and demand.
But again, if you're planningon holding both Bitcoin and gold
for a long period of time, Ithink just seeing the last four
months, you can start to reallyrecognize the value of just
quite frankly, simplyrebalancing between those two
assets.
You know, we think if you're,for example, getting in a
retirement account and you'vebeen all equities and you want
(43:03):
to dip your toes into Bitcoingold.
This is a perfect complement toa very broad, simple equity
position.
Speaker 1 (43:08):
I remember Venuto seeing you on CBC with Bob
Pisani and you were bringing upsome of the launches and you
mentioned BTGD and I waswatching I haven't had it on my
screen and I was watching thevolume and it was like 5 shares,
10 shares, 20 shares, 10 shares, 5 shares A lot of really small
(43:29):
volume trades and it justcausing a big sort of firestorm,
I think in terms of justinitial attention.
Were you surprised by that?
That you know traditional mediaoutlets like that still have
that kind of ability to movethings for funds?
Speaker 4 (43:45):
I don't think that traditional media outlet has the
ability to move it for a badfund.
Right, like I think the mostimportant decisions in in
growing a fund is made beforethe funds ever launched.
Right, and it's it's listeningand it's it's honestly it's
figuring out what mike silvawants to buy and what uh, you
(44:11):
know, return on dividends wantsto buy and what all these
various you know people that aretalking to each other and to
the do-it-yourselfers and thefire community and designing
products based on what they'retalking about, um and where they
want to be.
Like, we get a lot more productdevelopment help for our
(44:31):
clients from Reddit and YouTubethan we do from boring old
textbooks at this point.
Right, so BTGD resonated withpeople who heard about it on
CNBC.
If I was up there talking aboutyet another large cap fund that
tilts towards value, I don'tthink it would have changed
(44:52):
anything that day.
Speaker 2 (44:54):
Also, I would say I think that's why a lot of growth
is being had from not thetraditional old money managers
in the mutual fund space becauseproducts were built in a very
specific philosophy to fit intoa very specific way of doing
portfolio constructionphilosophy, to fit into a very
(45:16):
specific way of doing portfolioconstruction.
It's just crazy how manyproduct guidelines are still
built on the idea of anallocator using like style boxes
.
Okay, this is my large-capvalue manager, this is my
large-cap growth manager.
You know, when SMCI goes frommicro-cap to knocking on the
door of the S&P 500 and thenback down real quick, you can
see why that's a very antiquatedstrategy and that's why I
(45:36):
alluded to before.
You know, having a broadexposure whether it's with
leverage or not, the S&P 500 andtrading some of these more
eclectic vehicles around it, itcan be just as advantageous of a
strategy as any financialadvisor out there, of a strategy
as any financial advisor outthere and, quite frankly,
sometimes you're able toactually move and trade quicker
with more confidence, and that'swhy we've seen retail do so
(45:59):
well in this rally.
I mean, I think there was areally amazing chart last year
that showed single stockleverage ETFs went from about $1
billion to $20 billion lastyear.
That wasn't $20 billion offlows, that was like $12, $13
billion of flows and $7 billionof gains that the retail space
primarily received in theseproducts.
(46:20):
It's not going to be an upwardtrending market straight through
all quarters, as we're seeingthis year.
There's been a lot morechoppiness, there's been a lot
more outflows, but you couldargue this is a very interesting
moment where the collectiveinvestment world on Fintwit is
almost all collectively bearishright now and you're seeing that
in flows and so it either playsout now or there's a massive
(46:42):
wall of worry climb and, quitefrankly, probably a lot of these
growth stocks that have beenhit 20, 30% for the first time
in the last couple of years,independent of the rest of the
market.
You know this is really thefirst period in a couple of
years where we've seen the megacaps take a pullback that hasn't
as affected the broader marketto a greater extent.
That's the correlation thatyou're seeing.
(47:04):
Returning to the market thatyou commented on earlier, so
either this does unwind in ashort manner or there will
likely be, as we've seen overthe last 15 years, a lot of
upside to be had.
Speaker 1 (47:15):
I think as we wrap up again, folks, please make sure
you follow Mike Venuto, MikeSilva and David Gansby Do a
quick kind of roundtable towardsthe end here, just with some
big picture thoughts on how todeal with anxiety and
uncertainty in this marketenvironment.
Mike, for you, your experience,you do this quite well.
(47:35):
Mike Silva, what's your sort ofsuggestion or advice for those
that are getting antsy about theway things are playing out?
Speaker 3 (47:44):
First, just be thankful that the last two years
are really easy.
So it's bound for markets toget a little bit more difficult
and if you want to take it alittle bit easier and still be
part of the market, you don'tneed to go YOLO every trade.
So, in terms of highervolatility, I would say make
your position size a little bitsmaller, widen your stops and
give yourself to just step aside, breathe a little bit and, most
(48:10):
importantly, in times of thisdown capture type move, you
don't need to capture everysingle move.
So it's important to reallyjust survive and then, when the
next time comes, be ready tothrive.
Speaker 2 (48:21):
No, I just wanted to thank everyone for joining us
this morning and again, if youhaven't heard, we are Quantified
Funds.
We just launched our, had oursecond launch day and launched
four single stock leveragedpairs.
$1 in any one of these fourproducts gives you 200% exposure
, 100 to each one of thesestocks.
Ape covers the crypto space forMicroStrategy and Coin Lays,
(48:43):
and Spicy SPCY cover theartificial intelligence space,
pairing NVIDIA with AMD andNVIDIA with SMCI, and Zip pairs
Uber and Tesla in a driverlesscar theme.
So thank you, guys all forjoining us this morning and uh,
final thoughts from mr venuto,the godfather godfather.
Speaker 4 (49:02):
Um, so you know these are crazy times again, like I
haven't seen volatility in awhile.
Um, you know, like I think alot of us think that we had
volatility in 2022.
We really didn't.
We just had downward markets inboth bonds and stocks, which is
way more unprecedented.
That's not a normal market.
(49:22):
It's probably been since 2015,since we've had what this is
like, kind of choppy and stuff.
So I mentioned earlier the bestdecisions on an etf are made
before it's launched, right,things like the ticker and is
there an audience and can westructure it right and what's
the right fee and all those thesame with investing.
(49:44):
So personally to me, I don'tchange anything when things get
volatile.
I I'm I'm not a trader.
However, I do own things thattrade right m foot from them
with the managed futures and thetrend following, and I
personally put all of myaccounts on public and on
(50:04):
blossom.
So everything that I dopersonally be student rest of
the world, um, and my portfolioguys can go look at it, it's in
my safe fire funds right, whichown things like btgd and they're
massively diversified.
Barely moved the last coupledays.
Obviously, a little bit ofcrypto mixed in right.
(50:26):
I also run block a big fan ofthat.
My decisions today are nodifferent than they were
yesterday.
It's just to keep buying Idollar cost average in as much
as I possibly can, whenever Ican.
These volatile days don'tbother me at all.
Speaker 1 (50:41):
That's a good place to wrap this space up.
Appreciate those that listened.
Again, I'll have this edited asa podcast, and thank you to
Chukansky, veduto and, of course, mr Mike Silva.
Thank you, everybody.
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