In today's episode of *Engineering the Trade*, host Jermal Chandler and guest Gus Downing discussed their market positions amid a market pullback, emphasizing long Delta exposure and their strategies for managing risk. Both noted that instead of hedging, reducing long positions can be more effective. They highlighted the psychological benefits of having some green trades amid losses. The conversation also touched on VIX trends and potential market movements as they anticipate a bounce back, with a focus on confirming a market bottom before further positioning.

In today's episode of *Engineering the Trade*, host Jermal Chandler and guest Gus Downing discussed their market positions amid a market pullback, emphasizing long Delta exposure and their strategies for managing risk. Both noted that instead of hedging, reducing long positions can be more effective. They highlighted the psychological benefits of having some green trades amid losses. The conversation also touched on VIX trends and potential market movements as they anticipate a bounce back, with a focus on confirming a market bottom before further positioning.

A 10-year market study reveals significant differences in price volatility between ETFs and individual stocks. ETFs like SPY, IWM, QQQ and DIA experience outlier moves (defined as twice the daily expected move) only 1.6-2.3% of the time, with SPY going up to 567 days without a significant outlier.

In contrast, individual stocks like Tesla, AMD, Palantir and Lululemon saw 81% more outlier events and spent 42% fewer days in calm periods compared to ETFs. Western Digital (WDC) showed the shortest period without outlier moves.

The data supports selling premium on ETFs during low volatility periods, while individual stocks may offer better opportunities when implied volatility is high. This explains the current popularity of 0DTE SPX trading strategies among premium sellers.

A 10-year market study reveals significant differences in price volatility between ETFs and individual stocks. ETFs like SPY, IWM, QQQ and DIA experience outlier moves (defined as twice the daily expected move) only 1.6-2.3% of the time, with SPY going up to 567 days without a significant outlier.

In contrast, individual stocks like Tesla, AMD, Palantir and Lululemon saw 81% more outlier events and spent 42% fewer days in calm periods compared to ETFs. Western Digital (WDC) showed the shortest period without outlier moves.

The data supports selling premium on ETFs during low volatility periods, while individual stocks may offer better opportunities when implied volatility is high. This explains the current popularity of 0DTE SPX trading strategies among premium sellers.

Hosts Liz and Jenny conducted an entertaining Fast Market session starting with an ARCAT diagonal spread discussion that evolved from confusion over break-even targets below current stock price. The standout trades included adjusting their existing ETHA zebra position by adding a 26-43 strangle (despite Jenny's reluctance about calls against zebras), a KVUE 19-23 call spread for just 44 cents representing a potential "10-bagger," and an Apple $10-wide diagonal targeting 265 strike based on viewer Sina's bullish call. The session highlighted important lessons about account sizing when the hosts modified a viewer's preferred SPX $25-wide iron condor (collecting $5) to a $10-wide version (collecting $2.30) because the $2,000 risk represented too large a percentage of their account balance. Personal moments included Jenny sharing her Buxom Celeste lip gloss brand and Liz reminiscing about teaching options to Bob from Pepsi who had concentrated stock positions when it traded at $80 (now $150).