Market Volatility Analysis as S&P 500 Falls 1%
The hosts discussed market conditions during a significant down day, with the S&P 500 declining more than 1% and the VIX rising to the 17 handle. They noted that after large market moves exceeding 1%, subsequent days tend to see continued volatility, though not necessarily in the same direction.
The duo executed several trades, including rolling a ZB (Treasury bond futures) position to widen their put spread, establishing a new position in IBIT with a "Jade Lizard-esque" structure, and managing an ETSY position by rolling it forward.
They examined market research showing that extreme market moves (over 2-3%) are rare but tend to cluster when they occur. The hosts emphasized position sizing as critical for surviving market turbulence, noting that downside crashes represent only 3.6% of market moves but can be devastating without proper risk management.