Schwab Network
Noel Smith: ‘Rent the Market’, Don’t ‘Own the Market’
Feb 13, 2025
Noel Smith, CIO at Convex Asset Management and an expert in options strategies, shares his insights on navigating market volatility. He advocates for ‘renting the market’ rather than ‘owning’ it, emphasizing risk management and the importance of volatility catalysts. Highlighting his success with Palantir, he discusses short options strategies in VIX futures and market dispersion. Listeners can learn about balancing index volatility and individual stock positions to capitalize on emerging trading opportunities.
08:56
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Quick takeaways
- Noel Smith emphasizes the significance of the options calendar in predicting market volatility catalysts, influencing trading strategies around major expirations.
- He advocates for a 'rent the market' approach, suggesting that investors leverage volatility dispersion strategies to enhance profitability and manage risk effectively.
Deep dives
Exploring Options Calendar and Market Dynamics
The options calendar is crucial for understanding potential market movements, especially during significant expirations like those involving major companies such as NVIDIA. Upcoming events include light macroeconomic indicators, such as retail sales, which may lead to market fluctuations. Analysts suggest that recent price churn around the 6,000 to 6,100 range has created favorable conditions for dispersion trading, while the VIX remains stable, indicating a balanced volatility environment. This stability allows trading strategies, such as selling out-of-the-money VIX puts, to be lucrative, maximizing profitability while keeping risk manageable.
