30 min
Cheapest (SPX) PUT Protection You've Ever Seen? | S&P 500 Index Rebalancing | Bank of Japan Hawkishness Broken Pie Chart
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- Investing
Derek Moore responds to a Bloomberg chart highlighting how cheap protective puts are right now according to Bank of America research. At least since 2008, and why it might be good to be hedged when it’s cheap rather than waiting for a market crash to happen first. Then he explains some requirements for a stock to get included in the S&P 500 Index, when it regularly rebalances, and how relaxing the rules on multi share class stocks might pave the way for stocks like AirBnB to potentially be added to the S&P 500 Index at some point. Finally, while you were sleeping the Bank of Japan is going to loosen the cap on the JGP bonds to 1% and what that may mean if anything.
The Bloomberg graph showing how cheap protective puts are on the S&P 500 Index right now.
BofA points out 5% out of the money options are cheap and payoffs larger than they’ve been.
Why being hedged all the time makes sense.
How protection gets expensive when everyone “needs” it so why not be hedged when its cheap?
S&P 500 Index rebalancing periods and what it means.
NDX Nasdaq 100 special rebalancing to relieve too few stocks being too highly weighted.
Requirement and restrictions on a company to be included in the S&P 500 Index
S&P 500 Index relaxes rules on allowing companies with multi share classes into the index.
Potential for Air BnB and Blackstone getting added to the S&P 500 Index
Aspects of index membership changing no one ever talks about including aggregate earnings.
Bank of Japan hawkish turn
What is yield curve control by the Bank of Japan?
Mentioned in this Episode:
Why Crash Predictions Don’t Help | What Does the Market Fear? | Confusing Market Data | 11th Best Start to the Year https://podcasts.apple.com/us/podcast/why-crash-predictions-dont-help-what-does-the-market/id1432836154?i=1000622056946
Does Inflation Matter? | Make More by Losing Less? | Volatility and Cost of Hedging | Someone Buys a lot of VIX Calls
https://podcasts.apple.com/us/podcast/does-inflation-matter-make-more-by-losing-less-volatility/id1432836154?i=1000621261669
Short Sellers Give Up? | The Case for Interest Rates to Stay High for Longer https://podcasts.apple.com/us/podcast/short-sellers-give-up-the-case-for-interest-rates-to/id1432836154?i=1000620571083
Nasdaq 100 Index Strong First Half Equals Strong Second Half? | Overbought or not? | Trying to Guess the Forward PE Multiple Is Hard!https://podcasts.apple.com/us/podcast/nasdaq-100-index-strong-first-half-equals-strong-second/id1432836154?i=1000619186796
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek derek.moore@zegafinancial.com
Derek Moore responds to a Bloomberg chart highlighting how cheap protective puts are right now according to Bank of America research. At least since 2008, and why it might be good to be hedged when it’s cheap rather than waiting for a market crash to happen first. Then he explains some requirements for a stock to get included in the S&P 500 Index, when it regularly rebalances, and how relaxing the rules on multi share class stocks might pave the way for stocks like AirBnB to potentially be added to the S&P 500 Index at some point. Finally, while you were sleeping the Bank of Japan is going to loosen the cap on the JGP bonds to 1% and what that may mean if anything.
The Bloomberg graph showing how cheap protective puts are on the S&P 500 Index right now.
BofA points out 5% out of the money options are cheap and payoffs larger than they’ve been.
Why being hedged all the time makes sense.
How protection gets expensive when everyone “needs” it so why not be hedged when its cheap?
S&P 500 Index rebalancing periods and what it means.
NDX Nasdaq 100 special rebalancing to relieve too few stocks being too highly weighted.
Requirement and restrictions on a company to be included in the S&P 500 Index
S&P 500 Index relaxes rules on allowing companies with multi share classes into the index.
Potential for Air BnB and Blackstone getting added to the S&P 500 Index
Aspects of index membership changing no one ever talks about including aggregate earnings.
Bank of Japan hawkish turn
What is yield curve control by the Bank of Japan?
Mentioned in this Episode:
Why Crash Predictions Don’t Help | What Does the Market Fear? | Confusing Market Data | 11th Best Start to the Year https://podcasts.apple.com/us/podcast/why-crash-predictions-dont-help-what-does-the-market/id1432836154?i=1000622056946
Does Inflation Matter? | Make More by Losing Less? | Volatility and Cost of Hedging | Someone Buys a lot of VIX Calls
https://podcasts.apple.com/us/podcast/does-inflation-matter-make-more-by-losing-less-volatility/id1432836154?i=1000621261669
Short Sellers Give Up? | The Case for Interest Rates to Stay High for Longer https://podcasts.apple.com/us/podcast/short-sellers-give-up-the-case-for-interest-rates-to/id1432836154?i=1000620571083
Nasdaq 100 Index Strong First Half Equals Strong Second Half? | Overbought or not? | Trying to Guess the Forward PE Multiple Is Hard!https://podcasts.apple.com/us/podcast/nasdaq-100-index-strong-first-half-equals-strong-second/id1432836154?i=1000619186796
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek derek.moore@zegafinancial.com
30 min