Harvesting Volatility Using Options - The New Yield Curve

Key Takeaways:

 

• The options yield curve is a powerful tool: It offers a way to earn high returns in today’s markets, providing a modern alternative to old interest-rate-based strategies.
• Sell options on liquid assets: Selling options on assets like Bitcoin or the S&P 500 can be like running a renewable energy plant—using market ups and downs to create steady income.
• Read market emotions and patterns: Knowing how emotions, seasonal trends, and the volatility risk premium work can help you time your investments better.
• Profit from volatility gaps: The difference between implied and realized volatility can be an opportunity for gains, especially in emotional markets.
• Blend defense and offense in strategy: Taleb’s approach focuses on protecting against losses, while Washington’s uses emotional energy for gains—together they make a strong market strategy.

Chapters:

Timestamp Summary

0:00 Understanding the Options Yield Curve in Modern Finance

3:19 Economic Depression and the Impact of Low Interest Rates

5:19 Emotional Energy and Market Volatility as Waves

9:23 Understanding Volatility Risk Premium in Bitcoin Options Trading

17:02 Emotional Strength and Market Strategies for Financial Success

 

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Phillip Washington, Jr. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.