49 min
Probability of Recession? | Explaining How US Treasury Bond Auctions Work | S&P 500 Index Member Changes | Option Premium Intrinsic vs. Extrinsic Broken Pie Chart
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- Investing
Derek Moore is back with Jay Pestrichelli, CEO of ZEGA Financial, to review the Goldman Sachs probability of recession and Fed rate forecast for 2024. Then they do a deeper dive on key aspects of US Treasury Bond auctions. Hint, it’s a Dutch auction and how to read the results of treasury auctions including the bid to cover ratio. Later they talk through changes in the makeup of the S&P 500 Index companies and what the impact on earnings may be. Plus, how even when stocks go in and out of the index how the “divisor” calculation smooths the S&P 500 price out. Finally, Jay and Derek do a deep dive into the difference of options premium intrinsic value vs. extrinsic value using some examples. Oh, we have some recommendations as well.
What does Goldman Sachs have for probability of recession now?
What does Goldman Sachs estimate for Fed interest rates in 2024?
How do US Treasury bond auctions work?
What is a Dutch auction?
What is the bid to cover ratio mean in a US Treasury auction?
Looking at supply and demand metrics within Treasury Bond auctions.
S&P 500 Index committee that determines what companies come in and out of the index.
What is the S&P 500 Index divisor?
The largest company not in S&P 500 index is Uber?
Index changes underappreciated for earnings growth?
Airbnb, Blackstone, Lululemon all added to the S&P 500 Index in 2023
What is the difference between intrinsic premium and extrinsic premium in options?
How the option greeks like delta, gamma, theta impact extrinsic premium but not intrinsic
Comparing covered calls to ITM short puts on an index
Time decay implied in extrinsic premium
When covered calls are likely to get called away around dividends and extrinsic premium left
Why are ITM cash secured puts misunderstood
Mentioned in this Episode:
Stock Market Returns after First Rate Cut https://podcasts.apple.com/us/podcast/stock-market-returns-after-first-rate-cut-yield-curve/id1432836154?i=1000634550774
Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056
0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831
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
www.zegafinancial.com
Derek Moore is back with Jay Pestrichelli, CEO of ZEGA Financial, to review the Goldman Sachs probability of recession and Fed rate forecast for 2024. Then they do a deeper dive on key aspects of US Treasury Bond auctions. Hint, it’s a Dutch auction and how to read the results of treasury auctions including the bid to cover ratio. Later they talk through changes in the makeup of the S&P 500 Index companies and what the impact on earnings may be. Plus, how even when stocks go in and out of the index how the “divisor” calculation smooths the S&P 500 price out. Finally, Jay and Derek do a deep dive into the difference of options premium intrinsic value vs. extrinsic value using some examples. Oh, we have some recommendations as well.
What does Goldman Sachs have for probability of recession now?
What does Goldman Sachs estimate for Fed interest rates in 2024?
How do US Treasury bond auctions work?
What is a Dutch auction?
What is the bid to cover ratio mean in a US Treasury auction?
Looking at supply and demand metrics within Treasury Bond auctions.
S&P 500 Index committee that determines what companies come in and out of the index.
What is the S&P 500 Index divisor?
The largest company not in S&P 500 index is Uber?
Index changes underappreciated for earnings growth?
Airbnb, Blackstone, Lululemon all added to the S&P 500 Index in 2023
What is the difference between intrinsic premium and extrinsic premium in options?
How the option greeks like delta, gamma, theta impact extrinsic premium but not intrinsic
Comparing covered calls to ITM short puts on an index
Time decay implied in extrinsic premium
When covered calls are likely to get called away around dividends and extrinsic premium left
Why are ITM cash secured puts misunderstood
Mentioned in this Episode:
Stock Market Returns after First Rate Cut https://podcasts.apple.com/us/podcast/stock-market-returns-after-first-rate-cut-yield-curve/id1432836154?i=1000634550774
Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056
0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831
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
www.zegafinancial.com
49 min