The Outlier Trading Podcast Tom Sosnoff Unfiltered: Success Rate of Options Traders | The Outlier Podcast
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Oct 1, 2025 
Tom Sosnoff, a seasoned options trader and co-founder of tastytrade, shares insights on trading dynamics and market behavior. He discusses how bond movements shape Federal Reserve decisions and warns against the dangers of politicizing the Fed. Tom highlights the shifting correlations between assets like stocks and gold, and emphasizes a risk-averse approach in his portfolio. He also explains his strategies for managing earnings trades and stresses the importance of discipline over chasing high-risk rewards in trading.
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Fed Is Backstop; Bonds Call The Tune
- Tom Sosnoff views the Fed primarily as catastrophic insurance and says bond markets effectively dictate policy.
- He warns politicization of the Fed is the biggest risk to its independence and market stability.
Traditional Correlations Have Broken
- Traditional intermarket correlations have largely broken down and are unreliable for trading.
- Tom says most commodity and currency correlations with stocks are now near zero, making pair trades less predictable.
Reduce Exposure When Risk Exceeds Reward
- Move to cash when risk-reward skews negative and indices look overbought.
- Tom keeps stock allocation light (~15%) and sizes positions smaller until a meaningful pullback appears.