YT YouTube2Text

YouTube2Text → Transcripts → The Delta-Neutral Setup: How To Profit In Any Market Direction

The Delta-Neutral Setup: How To Profit In Any Market Direction — Transcript

by KINFO · 13,380 words · 2,134 segments · language en · Watch on YouTube

Open in transcriber Summarize with AI Download SRT/VTT

Full transcript

0:00You can make a lot of money. The
0:01strategy is easier. It's based on maths.
0:04So, if you can do basic maths, you can
0:06do it. If the market stays flat, I make
0:08profit. If the market goes up, I make
0:10profit. If the market comes down a
0:12little bit, I make profit. My goal was
0:14to double the account in 1 year, but I
0:17ended up doubling it in just a few
0:18months. In a delta neutral strategy,
0:20instead of predicting the market
0:22direction, we take both sides of the
0:24trade. So, even if I start from $100,
0:27the price goes to 95, even though
0:29technically the stock is down, but I'm
0:31still winning. As the time passes, you
0:33see this gap grows because your
0:35near-term option is growing at a faster
0:37rate. As this gap grows, this is our
0:40profit, but this is where our edge comes
0:42from. Based on the back test for several
0:44last years, I know what the win rate is
0:46going to be, what the expectancy is
0:48going to be, and I can just execute that
0:50strategy every week.
0:52>> So, you you are the casino.
0:55>> You can say that.
1:00>> Welcome to Undiscovered Traders. Today,
1:02we welcome Ravish from Greater New York,
1:04currently completing his $1 million
1:06challenge trading two very unique
1:08strategies we've actually never had
1:10covered before on the podcast. Joined
1:13him for last year, already setting up
1:14$327,000
1:17in broker verified profits. And this is
1:19kind of the crazy part.
1:22He's done it without ever looking at a
1:24chart and executing roughly 2 hours a
1:27day. So, this is a potential strategy
1:29for part-time traders. And today, we're
1:31going to look at his delta neutral
1:33strategy and his time spread strategy.
1:36He's got a full deck, full strategy all
1:38prepared to walk you through walk us
1:40through for you guys. Full value, but
1:41first there
1:44How are you, Ravish?
1:46>> I'm good. Very well. Thank you for
1:48having me.
1:49>> You've made I mean, we've got like
1:51300,000 plus verified. I think it's a
1:53bit more than that. But you've made
1:55$300,000
1:57without
1:58uh looking at charts. Can you just What
2:00do you look at if you're not looking at
2:01charts?
2:03>> So, I make my trades using option
2:05Greeks. I'm an option seller.
2:07So, the strategies that I practice are
2:10actually systematic strategies. They are
2:12based on option Greeks and options data.
2:15And everything is priced into those
2:18premiums, and we can use that to make
2:20these trades
2:21without having to worry about what's
2:22going on in the chart.
2:25>> Nice. And I just want For the For the
2:27people watching, comment below like what
2:29your experience level is with options.
2:31I'm just curious
2:32uh if people how how experienced they
2:35are in it because I think options are
2:36starting to boom now, but what would you
2:38say is the kind of the advantages to the
2:40strategies that you're about to kind of
2:42walk people through and teach people
2:43today?
2:44>> So, most people when they start with
2:46options, they start by buying options.
2:48They buy call and puts. And when you do
2:51that, you are fighting against the time
2:53because there is something called theta
2:55premium.
2:56And your option decays very rapidly. And
3:00if the price does not move fast enough,
3:03then your options go to zero. So,
3:04statistically, 80% of the options go to
3:07zero. And that's why most option buyers
3:10lose money.
3:11So, that means people who are on the
3:13selling side of the options, they can
3:15win most of the time because they are
3:17the ones selling these options.
3:18>> You were telling me a couple of things
3:20just before
3:21um before we went on the air, and it was
3:23kind of you you said that your strategy
3:25was too easy. Was it or was it was hard
3:28it was hard to go wrong?
3:30Tell me a bit about that.
3:32>> So, it's it's too easy for me now
3:34because I've been doing it for many
3:36years.
3:37Uh but for someone who's new, it's
3:39initially going to be definitely there
3:41is going to be a learning curve, but
3:43it's well worth it.
3:44>> It's very easy to make mistakes. But for
3:46with your strategy, you were saying
3:47there's more of a
3:48a margin for error. Can you tell me a
3:50bit about that?
3:52>> Yeah, so most traders what they do is
3:55they try to predict the price. They look
3:57at the charts, they look at the
3:58patterns, and they try to predict where
4:01the market is going today, where is it
4:03going next week. And uh based on the
4:06chart patterns, statistically, there is
4:09no real proven edge in it. Some people
4:11have developed their system with a lot
4:14of experience and instinct. But if we we
4:17are clearly looking at technical, there
4:18is no like clear technical pattern which
4:21we can say that you just follow this
4:23pattern mechanically and it's going to
4:24work.
4:25But when we come to the option selling
4:27side, there is a risk premium baked into
4:30the options. So when you are selling
4:32options, you have an edge.
4:34And I don't have to be precise on my
4:37timing or my entry. I can have a lot of
4:40room for error. The market can go up,
4:42down, or in circles, and I can still
4:44make profit in any market condition. So
4:46last year I started a brand new account.
4:49Now in the past I've made millions in
4:51profits, but last year I was like, if I
4:53were to start a new account with
4:55$100,000, can I make 10K a month with
4:57it? Which is like a goal for a lot of
4:59people.
5:00So
5:01turned out that was too easy. Right off
5:03the bat, in the first months I started
5:05to make 15, 20,000 dollars with it. My
5:08goal was to double the account in 1
5:10year, but I ended up doubling it in just
5:12a few months. So I was like, this is too
5:14easy, I need to level it up. So then now
5:17my new benchmark is how do how fast can
5:20I grow this to a million dollars?
5:22There's no fixed timeline for it, but we
5:24are now 14 months in, and the account is
5:27already at 450,000 now.
5:30>> So many people are getting 10% interest
5:32a year.
5:33I mean, how many hedge funds are out
5:35there? And people are putting all of
5:37their savings, 100, 200,000 of their
5:38savings, and they're lucky if they get
5:4010% in the year, if it's a good year.
5:42Especially in the United States, it's
5:44it's been a little bit the the SPY and
5:47the Qs have been returning less than
5:49than the markets in Europe these days.
5:53>> Yeah, absolutely. For most people, 10% a
5:56year is the S&P benchmark. And here I'm
5:59able to compound this account in 10 to
6:0215% a month. Now, when people think of
6:04compounding, people think of compounding
6:07on an annual basis, but compounding is
6:10actually based on intervals. It can be a
6:12monthly thing. It can be quarterly
6:14thing. The faster you can compound the
6:17shorter intervals you have, the more
6:19profit you can make with it.
6:22>> So, I've got two questions really for
6:25you. I mean, first of all, I think it's
6:26it's an incredible return on investment
6:28of a system that returns 10% a month
6:30kind of systematically rather than
6:32discretionary day traders who are
6:35making 25% or 30% over a couple of
6:38months and then they've lost 100% when
6:40they blow up on shorting the crazy meme
6:42stock or something like that. I think
6:45I'm really looking forward to getting
6:46into your strategy, but I mean, first of
6:48all,
6:49um
6:50do you need a lot of money to do this?
6:51For the people learning, can you start
6:53small?
6:54>> Yeah, absolutely. You can start with as
6:56little as you want. In fact, if you're
6:59new, I would recommend you to start with
7:01as little as possible because no matter
7:04what strategy you try, there is going to
7:05be learning curve. Initially, you can
7:07lose money.
7:08So, the goal should be to lose as little
7:10as possible while you're learning
7:13so that you don't get
7:15you don't get hurt by the market. The
7:18The mistake some people do is they start
7:20with two large positions. They have a
7:22couple of bad losses, and it sets you
7:24back and and it demotivates you from
7:27even trying something new
7:29because you might be close to getting a
7:31positive expectancy. You might be close
7:33to getting that edge, but now you have
7:36had a setback, you are going to stop
7:39trying it.
7:40>> How easy is this to for people to learn
7:42and replicate because I think for some
7:44newer traders these are some scary
7:46sounding words delta delta neutral time
7:49time spread strategy.
7:51>> So
7:52most people the thing is that most
7:55people are not aware that something like
7:57this exists.
7:58But once you understand the basics
8:01at some point it will become a second
8:02nature
8:03because
8:04if you are brand new to trading there is
8:06a learning curve but this is way easier
8:09than charting and technical analysis and
8:11doing all those patterns and indicators.
8:14>> I love that. So it's easier. It's it's
8:16the strategy is easier it's just less
8:18conventional.
8:19>> It's based on maths. So if you can do
8:21basic maths you can do it.
8:24>> And just just lastly
8:26first you have a YouTube channel right?
8:27So people want to watch this and learn
8:29more about it.
8:30You've got a ton of videos.
8:33>> Yeah I teach almost all of my strategies
8:36in-depth on my YouTube channel. So if
8:38you like any of these strategies you can
8:40go to my channel and watch full videos
8:42on them
8:43where you can learn them how to get
8:44started with it.
8:46>> Guys and the the link is in the
8:48description below and just before you go
8:50through your strategy two strategies
8:52actually two option strategies before
8:54you go into that just quickly I know I
8:56know we've we've only got 300,000
8:58verified for you on Kimble because
9:00because you've just uploaded the broker
9:02last year.
9:03So what's how long you've been trading
9:04for? What's your total profits?
9:07>> So I've been trading for almost 10 years
9:09now. Initially when I started it was
9:13it was actually a stroke of luck. I went
9:15to the Robinhood app to buy stocks. My
9:18goal was I will buy Fang apps Fang
9:20stocks.
9:21And when I clicked on the trade button
9:23it showed another button called trade
9:25options.
9:26So initially I thought it would give me
9:28some options some advanced options to
9:30submit my order.
9:31And then I clicked on it and learned
9:33about calls and puts it was something
9:35brand new to me.
9:36And I was like this sounds fascinating.
9:38I can control with 100 shares of a
9:40company like Meta for just a few hundred
9:42dollars.
9:44So, I was like, okay, let me try it. And
9:46I put in $500 in my first trade. Next
9:48day, it turned into $2,500.
9:51>> Oh.
9:51>> And then another trade next day, next
9:53day overnight trade, made another
9:55$1,500. So, in my first week, I made
9:58like $5,000 without even knowing what I
10:00was doing.
10:02And I started my account with just
10:03$2,000.
10:05So, I was like, this is amazing. I'm now
10:07going to do this and retire from
10:08everything else. I was working in tech
10:10back then.
10:11So, I was like, this is too easy. I
10:13should do this all the time.
10:16But but that beginner's luck didn't last
10:19very long. And then I losing money as
10:21most traders do.
10:23And
10:24I spent several years trying to chase
10:26that rabbit hole doing technical
10:28analysis on charts, buying options,
10:31losing money.
10:33It was an expensive lesson.
10:35But I think every trader needs a journey
10:37like that to get to a point where you
10:40find something that works for you.
10:43And then I learned about option selling.
10:45And
10:46I was like, this I like this because I
10:49don't have to look charts, I don't have
10:51to be good at technical analysis.
10:53I can just do simple maths and bet on
10:56probabilities
10:58and have the house advantage. Because
11:00when you are buying options, you are
11:02like a gambler trying to time the market
11:05or play your luck. But when you are
11:06selling, you are the house. You have the
11:08house advantage.
11:10>> So, you you are the casino.
11:13>> You can say that.
11:15>> You you are the casino. It's like It's
11:17like rubbish palace, not Caesar's palace
11:19um in Las Vegas. But I'm curious to get
11:22into it. Do you want to open up the Do
11:24you want to open up the deck and and
11:25let's see let's see this strategy.
11:28>> Okay. So, a little bit about me. Uh been
11:31trading options for more than 10 years
11:33now. I had a career in tech. I retired
11:36from my career a couple of years ago
11:38when I hit a point where my options
11:40income was more than my full-time job.
11:42So, at that point it made sense to go
11:44all in on it because I thought that I
11:47could be I should be able to do much
11:48better.
11:49And uh like I said, I started out with
11:51the beginner's luck. But then there were
11:53several years of period where it was hit
11:56and trial, losing money, learning
11:58different thing. I had a big setback
12:01during COVID period. By that time I was
12:04like, "Okay, I need to do something
12:06better here."
12:07Because uh most of because buying
12:10options I'm losing most of the time. So,
12:12I learned that there is a selling side
12:13of options also. Who are making profit
12:16off me.
12:17So, I decided to learn that side. I
12:19started selling options. Initially, when
12:21most people start with selling options,
12:23they start with simple strategies like
12:26selling cash-secured puts, selling
12:28covered calls. Which can work well. A
12:30lot of people make 20 to 40% annual
12:33return with those kind of strategies and
12:35they have been battle-tested for many
12:37years and they work well. And they have
12:39a lot of margin of error.
12:41Um
12:42but then I was like, "Okay, how do I do
12:45something better?" Because at that point
12:47my account was relatively small. I was
12:49trading with about 20 30,000 dollars.
12:51So, even if I made 10 20 percent in a
12:54year, it was not really worth of the
12:56time. So, I was like, "I need to do
12:58something exponential here."
13:00Um and then I started to contribute more
13:04to my account. I was growing my account
13:06consistently. I started to use some more
13:08leverage.
13:09And I was doing really well
13:11until 2022. In 2021, I had a blockbuster
13:15year.
13:16And in 2022, I realized that was a bull
13:18market genius.
13:20That when everything is going up, it's
13:22easy to make money.
13:23When everything goes down, you get
13:26crushed hard.
13:27And uh
13:29at that point I decided that I will
13:31focus on something called a delta
13:33neutral strategy.
13:35In a delta neutral strategy, instead of
13:37predicting the market direction, we take
13:40both sides of the trade.
13:42And if the market trades in that range,
13:45you make profit. And the best thing
13:47about that is that delta neutral
13:49strategies are even more profitable in a
13:52down year like 2022.
13:56>> Nice. Interesting. So is a delta neutral
13:57is is it kind of like you want the stock
14:00to stay where it is? Or like is it like
14:02a butterfly pattern or something like
14:04that?
14:05>> Yeah, there are a lot of different
14:07patterns. Uh
14:08delta neutral is one umbrella term for
14:11several different option structures.
14:13Simplest one is triangle and iron
14:15condor. We can dive into some examples
14:18on how they work.
14:20Uh once you understand, it's fairly easy
14:22to do.
14:23>> But can I just understand by delta
14:25neutral what you want the stock to do?
14:27When you when you place an options
14:28trade, what you want the stock to do?
14:30>> We want the stock to trade in a range.
14:32So, for example,
14:34>> Okay. So, let's say we have a stock
14:36that's trading at $100. We start here.
14:39And then we sell a put at $90 and we
14:42sell call at $110.
14:45So, we have 10% up and down range. As
14:48long as we stay in this range, the
14:50market can go up, down, or in circles.
14:53As long as it stays in the range,
14:55we get premium from both sides and we
14:57keep that premium.
15:00We sell call to someone, we sell put to
15:02someone.
15:03And we if we stay in the middle, we win.
15:06So, even if I start from $100, the price
15:09goes to 95, even though technically the
15:11stock is down, but I'm still winning
15:14because it is still above my 90 strike.
15:18>> Yeah. Yeah, makes full sense. I'm not
15:20going to ask any more questions. I'm cuz
15:21I think you you I'll I'll ask you
15:23questions later in the presentation. So,
15:24I'll let you go back and then we'll
15:26continue.
15:27>> So, I've been trading Delta neutral for
15:29several years now and at this point I've
15:31become like a very good expert in it.
15:34And my strategies are a very systematic.
15:37They're based on backtesting.
15:39And
15:41a lot of these strategies are mechanical
15:43and even automated.
15:45So, the way it works is let's say I find
15:47a strategy where I open a trade at a
15:50fixed day at a fixed time with a fixed
15:52structure.
15:54And based on the backtest for several
15:56last years, I know what the win rate is
15:58going to be, what the expectancy is
16:00going to be, and I can just execute that
16:02strategy every week.
16:04So, using strategies like these,
16:07uh my goal was to make $10,000 a month
16:09on a new account with $100,000.
16:12And now this account is up to 456k
16:15including unrealized gain.
16:18My initial goal was to just make $10,000
16:20a month.
16:21The most fascinating part is that
16:23now this account that I just started
16:25with 100,000 last year,
16:27it is making more than 50,000 in a
16:29month.
16:31If you see on Kinfo, my last one month
16:33realized gain is $97,000.
16:36And this month currently month to date
16:38is $70,000.
16:40So, it is just like crazy to me that you
16:43can make this kind of return with just
16:45just starting with 100,000. Now, if you
16:48have smaller account, you can start with
16:5010,000 also.
16:51But, it will need time and experience to
16:54get to a level where you are able to
16:57produce returns which are phenomenal.
17:00>> Yeah, it's it's it sounds quite
17:02interesting because I it's not re I
17:04mean, is there a lot of creative
17:06creative thinking in the backtest and
17:09finding formulas or is it just very
17:10process process driven and repeating
17:13repeating what the data says?
17:14>> It is based on data. So, a lot of the
17:17data is actually based on the option
17:19Greeks. So, once you understand the
17:22option Greeks, initially it might sound
17:24a little bit complex,
17:26but if you just spend some time to
17:27understand it,
17:29it will unlock a whole new world for
17:30you, which I I'm sure it's going to be
17:32life-changing for most people.
17:35>> And and the Greeks are
17:37the Greeks aren't some
17:38some color it's the No, it's I was going
17:41to say the Greeks aren't some coliseum
17:42in Rome Rome, but it's I think that's
17:45that's a different country, but the
17:46Greeks aren't too the Greeks aren't too
17:48confusing really. What what what are the
17:50Greeks for the people I don't don't
17:51know. It's it's
17:53alpha, delta, gamma, theta, and
17:57implied volatility.
17:59>> focus on the Let's focus on the two
18:01simplest Greeks for now, which most
18:04people can easily understand. And 80% of
18:07the time you just rely on these two
18:08Greeks.
18:09One is delta.
18:11A delta basically means
18:14a multiplier.
18:15Right? So, if I have a If I have a stock
18:18that's trading at $100,
18:20and I buy a call option,
18:22which is currently at 20 delta,
18:25that means it will have a 20x
18:27multiplier. For every $1 the stock is
18:30going to move,
18:31my option is going to go up by $100 by
18:34$20.
18:35>> Yeah.
18:36>> So, that means if I buy this call option
18:38for Let's say I pay $200 for it.
18:41And I buy that call option, the stock
18:43goes up by 5%. So, stock goes up by $5,
18:48that means my option can gain five
18:51about 5 into 20 is $100 in premium.
18:55>> Yeah.
18:55>> So, an option that I bought for $200
18:58can make 50% return if the stock goes up
19:015%.
19:02>> Yeah, makes sense.
19:04>> And now another way that this option
19:06represent is that if you as an option
19:09buyer, you are buying a 20 delta 20
19:12delta call
19:13the chances of you making profit in it
19:16is only 20%.
19:18>> And if right
19:20>> If I'm selling an option and I'm selling
19:22that 20 delta option to you the chances
19:25of for me to make profit in that is
19:27about 80%.
19:30>> Is that is that true when when you read
19:31it out or is it you read the delta as
19:330.2 on the screen don't you? Like that's
19:36that's normally how it shows up and that
19:38literally means 20% chance of this
19:40working does it? The
19:42the Greeks the the machine is is is
19:45suggesting that.
19:46>> Yes, so that means it has 20% chance of
19:49expiring in the money. That means it
19:51will make some profit
19:53in about 20% of the times.
19:57So as an option seller if you are
19:59selling 20 delta calls or 20 delta puts
20:02you are going to make profit most of the
20:04time.
20:05>> Interesting. And obviously if that delta
20:07changes by which how far out away from
20:11the the money the the puts are or the
20:13calls are that you're buying the the
20:14delta would
20:15>> Yeah, it can be it can be it starts from
20:18like at the money is $50.
20:21The further out of the money you go the
20:23lower delta it's going to be.
20:25There are some option sellers who even
20:26sell like five delta option. They will
20:29have 95% win rate.
20:31But it but there is also another side to
20:34it.
20:35In one of case where the market has like
20:37a parabolic run
20:39they can also lose more than what they
20:41are making in in a single loss. So their
20:43losses are going to be bigger but they
20:45will have a higher win rate. So you have
20:47to optimize for the balance
20:49where I have high win rate
20:52with an even risk reward. So I
20:54personally like trades where I can have
20:5670 to 80% win rate
20:58with an even risk reward. If I'm winning
21:00I'm making $100 if I'm losing I'm losing
21:03$100.
21:04That means as long as I win more than
21:0650% of the times, I can be profitable.
21:09So, in actual terms, my win rate is like
21:1270% to 80% varies month on month. Last 2
21:15months has been close to 100% and you
21:18can trade it in many different ways.
21:20There are a lot of
21:21you can put together two to four options
21:24in a spread and come up with a lot of
21:26different strategies where you can
21:28construct a very sophisticated trade
21:31which can give you a lot of edge.
21:34>> And do you know what do you know what I
21:35think is uh is cool from what I'm
21:37understanding of your strategy is most
21:40people cuz
21:41I've traded with a lot of small cap
21:42micro cap equities traders and um
21:45the main thing about the complaint about
21:47is markets are quiet, it's dead,
21:49summertime July August. But your
21:51strategy probably loves summertime
21:53because you you want nothing to happen.
21:55The less that happens is the better. Is
21:57it not?
21:59>> Yeah, absolutely. We actually love the
22:01choppy market. Now, most traders
22:03complain about losing money in the
22:05choppy market especially if you're
22:07buying option in the market is choppy,
22:09your option goes to zero.
22:11That's what option sellers love.
22:13We like to sell options in that choppy
22:16market. Now, most of the time market is
22:17choppy.
22:19So, we sell options in that choppy
22:21market and make premium from both sides
22:24and your options expire worthless, we
22:26make money.
22:28>> Yeah, so
22:29you don't you don't love the
22:31the AI boom and revolution and Sandisk
22:34and Nvidia. You're you're loving the
22:37the boring uh what supermarkets or
22:42consumer staples is it that kind of more
22:44boring more boring industries like
22:46Walmart?
22:48>> So, I invest into
22:51I invest into all types of companies. I
22:52may very bullish I'm very bullish on AI
22:55and tech and I have lot of investments
22:58in all the big tech companies, AI
23:00companies, semiconductor companies.
23:02Uh when it comes to selling options,
23:05I am agnostic to the stock. The
23:07fundamentals of the stock does not
23:09matters to me. The
23:11uh
23:12the technical I don't do a lot of
23:15technical analysis.
23:16I look at stocks which have like a
23:18predictable range.
23:20And I trade options in those range. Now,
23:22there are some uh some periods where you
23:26can expect higher volatility.
23:28And in those periods, I would just step
23:30out of the market. Yeah, it's like
23:32selling insurance. So, let's say um you
23:35want to if you're selling insurance,
23:37you want to sell insurance where you
23:39have low risk.
23:41If you know that there is a flood
23:43warning warning, are you going to sell
23:44insurance in a flood warning? I'm not
23:46going to. I'm going to step out of the
23:48way.
23:49Even if it means that I do not make any
23:51trade for a month, I'm going to be okay
23:53with that.
23:54Because it is better to not trade and
23:57not lose money
23:59than going in the market and risking
24:01taking unwanted risk and losing money.
24:04So, you have to
24:06pay some attention to the macro cycle,
24:08what's going on in the market, is there
24:10any war going on, is there any FOMC
24:13coming?
24:14So, just step out of those events and
24:16most of the time it works well.
24:18Another great thing Now, this is a
24:20screenshot from my broker.
24:22The best part about the strategy is that
24:24if you see, it is up like 300% in uh
24:27since I started.
24:29But there is very little drawdown. It is
24:31pretty much going straight up. Then
24:33there are periods of flat months where
24:35like I said, I stopped trading in some
24:37months. You see like this flat period,
24:39like this was Iran war situation, I was
24:41flat.
24:42Because why take unwanted risk?
24:45Uh
24:46so, my drawdown is in single-digit
24:48percent. Typically, traders who make
24:51this kind of returns
24:53will have very high drawdown. They will
24:54have 50-60% drawdown at times.
24:58Here I have almost no drawdown. So, it's
25:00very low stress strategy for me.
25:03And even this this during this period,
25:06there were multiple drawdowns in S&P
25:08ranging from 15 to 20%.
25:11We went through the tariff situation. We
25:13went through the Iran war. S&P had
25:15multiple big drawdowns. My account had
25:18almost no drawdown.
25:20>> Yeah. Yeah, I think you can't stress
25:22that enough. It's It's
25:23we literally
25:25So, like two 10 to 20% drops in in the
25:28queues and the spies for the tariffs and
25:31the war. Yeah, it's incredible that
25:32you've uh
25:33>> Right. Now Now, a lot of people will say
25:35that oh, if you are making 300% 200%
25:39return in a year,
25:40you are beating all the hedge funds. Uh
25:43you can be a trillionaire in few years.
25:46If you are compounding at 200%, you can
25:48be a trillionaire in few years.
25:50>> True.
25:50>> But, that's not possible
25:52because of liquidity.
25:54In a lot of these trades, there is not
25:56enough liquidity
25:58that I cannot go out and put a billion
26:00dollar trade in a strategy like this.
26:03So, I can trade a few million dollars
26:05with a strategy like this,
26:07but I do not I cannot trade billions of
26:09dollars in a strategy like this and
26:11still generate same kind of returns
26:13because then you become the biggest
26:15position in the market and market makers
26:17will hunt you down.
26:20And
26:21so,
26:22there is liquidity concern where which
26:25is why you cannot scale it infinitely,
26:28but I'm happy to make a few million
26:29dollars. I'm not even thinking of that
26:31level.
26:32Uh
26:33and the other thing is the mindset and
26:35psychology.
26:36As my account size uh sizes are growing,
26:40I do not feel comfortable risking large
26:42amounts of money
26:44because capital preservation is the
26:46priority for me now.
26:47When you're starting with let's say
26:49$10,000, your goal is to get to
26:50$100,000.
26:52When you have made millions of dollars,
26:54you want to protect those.
26:56So, instead of which is why I was like,
26:58okay, I will start a new account with
27:00100k because I can afford to lose 100k.
27:03It If it goes to zero, it's not going to
27:06affect me.
27:07But, using that risk capital, I have
27:09swing I can take a shot at making it
27:1110x.
27:13>> Yeah.
27:14Fair. Makes sense. And And it's it's
27:16great it's great learnings and examples
27:18for newer traders who need a
27:20uh amplify their accounts and and turn
27:221,000 into a couple.
27:24>> Yeah, so anyone who wants to do trading,
27:26what I would recommend is like allocate
27:28a certain risk capital which you are
27:30okay if it if you lose it.
27:33That's way That way you can protect your
27:35bigger capital.
27:37But, and risk small amount to get to a
27:39point where you can be consistently
27:40profitable.
27:42So, uh let's get into the strategy. So,
27:44my first strategy is called delta
27:46neutral strategy. Now, this is an
27:48umbrella term for a lot of other
27:50strategies.
27:52Strategies like strangle and iron
27:54condor.
27:56Uh the main the way this strategy works
27:58is
27:59uh let's say you are an option buyer.
28:02You think the stock is going to go up,
28:04you buy call.
28:05If you think the stock is going to go
28:06down, you buy a put.
28:08What I think is I don't care where the
28:11stock is going. I'm going to look at the
28:13data.
28:14Let's say a stock is trading at $100.
28:17And my data says that in a given time
28:20period, let's say the time period is 1
28:22month,
28:23I think that this stock is going to
28:24trade between 10% up or down range.
28:28Based on the data, I can tell that uh in
28:31a month, the trading range for this
28:32stock is about less than 10%. Maybe it's
28:345 to 7%. So, I'm going to add some
28:37buffer to it.
28:38And I'm going to sell a put which is 10%
28:41down from the current price. And I'm
28:44going to sell a call which is 10% above
28:46the current price.
28:48And I'm going to collect premium from
28:49both side. So, the put buyer is going to
28:51pay me credit. The call buyer is going
28:54to pay me.
28:55As long as the stock trades in this
28:57in this range,
28:59both of these expire worthless and I get
29:01to keep that profit.
29:05>> Can I ask what happens if
29:08it's very rare to happen, but what
29:10happens if
29:12um I don't know, it's British British
29:14Airways. Yeah, yeah, it's a safe uh
29:17American Airlines, something like that.
29:19It's a safe type of player that you play
29:21and one of the planes crashes or they
29:23found out that every single broken and
29:25it's a complete crisis and and the stock
29:26goes from 100 to three
29:29overnight. Is will that be a big loss?
29:32So, big loss as well.
29:35>> So, there are two ways to do this.
29:38One is defined risk and one is undefined
29:41risk. So, let me show you with an
29:43example.
29:44So, I use this tool called Option Strat
29:46to model my trades. Uh so, the simplest
29:50strategy is called strangle. So, let's
29:52say I want to make a trade on Meta. Meta
29:55has been through with the earnings.
29:56After earnings, there is a period of
29:58choppy period when the market tries to
30:00discover what what's next.
30:02So, I think I think that next 1 month
30:05can be like a calm period for Meta.
30:07The stock is trading at 605.
30:10I can go sell a put at 505 strike and I
30:14will get $380 $380 credit from it.
30:17And I can sell a call at 650 strike.
30:21And I will get $738 credit. So, total
30:24I'm getting like close to
30:26$1,120.
30:28And now, this gives me a range where the
30:30stock can go up or down
30:34in between this range, right? So, the
30:36price starts here or the next 1 month,
30:38the stock can go up or down like this.
30:40As long as it stays in this range,
30:44I get to keep this profit.
30:46And getting into this trade, you will
30:48know exactly what your chance of profit
30:51is.
30:52So, before I open the trade, it shows
30:54that I have 75% chance of winning this
30:56trade.
30:57And when I lose,
30:59I can use a stop loss. If the price goes
31:02out of this range, I can exit.
31:05>> Uh okay.
31:06So, it say it can
31:07>> of the times I'm winning and winning.
31:09And if it starts to go out of this
31:11range, at that point I can exit. My loss
31:13is going to be maybe a few hundred
31:15dollars.
31:16But there is another way to do this.
31:18Now, this kind of strategy you can say
31:20it's You can see here it says max loss
31:21infinite.
31:23If let's say there is a big news
31:25overnight, Meta stocks goes up or down
31:2720%. At that point, I can lose more than
31:30this $1,100.
31:33>> Yeah.
31:33>> So, in that case, what I like to do is
31:36instead, this is called selling naked
31:38strangle.
31:39So, I typically don't sell naked
31:40strangle like this because it has
31:42infinite risk.
31:44So, I like to hedge it by buying outside
31:47wings.
31:48So, let's say if I'm selling 550 put,
31:51I can buy another put, which can be 10
31:55points out.
31:56>> Yeah.
31:56>> And I can buy a call,
31:59which can also be 10 to 20 points out.
32:01Now, in this trade, my credit goes from
32:05receiving about $1,100,
32:08it goes to $269.
32:10But now my max loss is capped at 731.
32:14Now, no matter what happens,
32:16I'm not going to lose more than $731.
32:18>> Is it not just better to have the the
32:21stop in cuz with with options, it's can
32:23be tricky and they say don't use stops
32:25because you can get tugged out too easy.
32:27Is it Is that the reason why or
32:29cuz you don't you pay an extra premium
32:30unnecessarily, no?
32:33>> Yeah, so but
32:35if you are selling a strangle,
32:37it is not recommended for most people
32:40because you can have like a big black
32:43swan risk. What if there is like a
32:45recession or black swan risk overnight
32:47and the market drops 10%? What if there
32:50is something like COVID?
32:51So, you don't want to get wiped out on
32:54on those days.
32:56>> Yeah, cuz I I was thinking the options
32:58don't trade after hours, so you'll be
32:59okay. But that doesn't mean the world
33:00stops. Anything happens overnight and
33:02the stocks going to open up 20 30% out.
33:05So, you can completely protect yourself.
33:07This is what I love about options. You
33:09know your exact risk, your exact reward,
33:11and the exact probability of the
33:13occurrence.
33:14And you You must You must
33:16You must go to bed sleeping like a baby.
33:18You must sleep very well at night
33:20because everything's already worked out.
33:24>> Yeah, absolutely because I know that my
33:26probabilities are going to work out. And
33:29plus I I spend some additional time back
33:31testing to find these opportunities.
33:34Now, for example, let's say you opened a
33:36trade like this last week. Last week
33:38when Meta was at 708. At that point,
33:41this same option spread was trading for
33:43332.
33:45And now the price is doing thing. It's
33:47going up and down, but you see the above
33:49line
33:50is the trade. The bottom line is the
33:52stock price going up and down. This line
33:55is the trade price.
33:56There is some volatility, but you see
33:58that it's mostly going up to the right.
34:01>> Yeah.
34:01>> And as long as the price stays in this
34:04range,
34:05the premium is going to decay and we
34:07make profit.
34:09And you can do these trades for any
34:11duration. You can do it for um
34:14one-day duration. You can do it for zero
34:16DTD. You can do weekly. You can do
34:18monthly. In fact, I also do some zero
34:21DTD trades where I have asymmetric risk
34:24reward. I can even structure these
34:26trades that I want to risk $1,000, but I
34:29want my reward to be $2,000.
34:32All you have to do is play around with
34:33the strikes and probability
34:36and whatever you are comfortable with,
34:38you can go with that kind of setup.
34:40>> And then this is delta neutral because
34:42you're neutralizing the delta basically
34:43with the
34:44both sides. Both sides the call and the
34:46option.
34:47>> Yeah. And then there is another if you
34:51Now some people are like I I want a
34:53better risk reward.
34:55So either you can have a high win rate
34:58or you can have a high better risk
35:00reward.
35:01I like a balance where like in a trade
35:04like this typically when I start to lose
35:07there are also some adjustment
35:08strategies that I can use where in most
35:11cases my max loss is not going to be
35:13like this.
35:14So in a winning trade let's say I win
35:16$250 in a losing trade maybe I lose $300
35:19but I'm winning 70 to 80%. But if you
35:22want to structure it in a another way,
35:24there is another strategy called iron
35:26fly.
35:27Let's try this on something like Nvidia.
35:30>> Yeah.
35:31>> Another great way to sell is like
35:33Nvidia's earnings is tonight, right?
35:36People don't know if the stock is going
35:38up. Some people are saying it's going to
35:39go up. Some people say it's going to do
35:41go down.
35:42I don't even care.
35:44I'm going to do this strategy with with
35:47on a back test it has more than a 100%
35:50win rate over the last 2 years.
35:52And I'm going to do this tonight. What
35:54I'm going to do is
35:56I'm going to sell a call and put at 225
35:59strike which is the current price.
36:02And I'm going to buy 20 point outside
36:05wing as a hedge.
36:08Right so I'm going to sell 225
36:12sell 225, buy 205 put and 245 put for
36:17protection. This strategy is called iron
36:18fly.
36:19Now
36:21it has 51% chance of profit.
36:25And here the max loss is 894.
36:30And the credit you are receiving is
36:31$1,100.
36:33So, now if you tell me, if we do a coin
36:35flip where you have 51% chance of
36:37winning,
36:38and if you lose,
36:40you lose $900.
36:42If you win, you win $1,100.
36:45Is that a good strategy?
36:47The You see the edge in the maths. I
36:50don't even have to look at the chart to
36:52make this trade.
36:54I have a mathematical edge in this
36:55trade.
36:57>> Yeah, it's a it's very different to to
37:01to how the majority of retail traders
37:03trade. This is not how retail trades.
37:05This sounds a bit more like how hedge
37:07funds probably trade.
37:09>> Yeah, but
37:10yeah, a lot of funds trade like this.
37:13And And in this case, my strategy is
37:15going to be simple.
37:17I'm going to open this trade 15 minutes
37:19before market close.
37:21And tomorrow in the morning, uh, at
37:24whatever price the market opens,
37:26the first thing I'm going to do is take
37:28profits. In the first 5 to 10 minutes,
37:30I'm going to take profit, and I'll be
37:32out of this trade.
37:34May I may not make the full $1,100
37:36profit. Maybe my profit in the morning
37:38is going to be somewhere close to $400,
37:41depending on where the price opens. So,
37:44whatever the profit is, I'm going to
37:45take it in the first 5 minutes.
37:48If I make 50% return in an overnight
37:50trade with just 5 minutes of work, I'm
37:53thrilled with that.
37:54>> Yeah, and so what you need to what you
37:55need what you need Nvidia to sit for
37:57this to for this to work?
37:59>> So, for this to make profit, Nvidia
38:01needs to be in this range.
38:04So, between 214 to 236.
38:08>> Uh, it just needs to sit within that 5
38:105% range tomorrow morning by the by
38:129:30.
38:14>> Yes. So, the market makers are expecting
38:17a 5% movement.
38:20But historically, Nvidia moves less than
38:235% after earnings.
38:25So, over the last year, I've been
38:26trading this kind of strategy for every
38:29every earnings. Have I have 100% win
38:31rate on this.
38:33>> How did you get into the backtesting
38:35element of the research? Is this like
38:37Python or
38:38AI?
38:39>> So, I actually
38:40I actually vibe coded my own backtesting
38:43engine
38:44uh
38:45using options data. Uh let me show it to
38:47you. So, this is my backtest for Nvidia
38:51uh over the last 1 year. I tested a lot
38:54of different strategies. If I were to do
38:56an iron
38:58So, I tested multiple strategies, iron
39:01fly and iron condor, targeting different
39:03strike prices, different wings.
39:06And almost all the combination won four
39:08out of four times over the last 1 year.
39:12And they each have their average profit.
39:15They each have their
39:17uh return.
39:18So, like for example, if I were to sell
39:21an iron fly with 10-point width uh width
39:24wings,
39:25it makes 43% return on average in just
39:28an overnight trade. If I go with
39:3020-point wide, it makes 28% return.
39:33And if you traded this every time for
39:36the last 1 year,
39:38with just one contract, total profit
39:40would be $1,100.
39:42And in this backtest, I'm just opening a
39:44trade 15 minutes before market open,
39:46taking profit uh in the first 10 minutes
39:49at market open.
39:51>> Uh it's it's very kind of you to go into
39:53this detail and and reveal this kind of
39:56uh work that that you're doing. It's
39:57very nice of you. And it just shows you
39:59like
40:00with especially with artificial
40:03intelligence these days, you don't need
40:05to be able to code. You can You can use
40:08platforms and programs to build your own
40:10system. It just I mean, I don't know if
40:12you agree, Ravish. I do the same thing
40:13as you would. It just takes a curious
40:15mind. It just takes a little bit of
40:17curiosity and and answering some
40:19questions to
40:21to start getting to this point now.
40:24>> Yeah, absolutely. There are also you
40:26have to basically uh
40:29once you understand the Greeks, it like
40:32I said, it is going to open a whole new
40:33world. Because then you start to think
40:36about things like, "Hey, I can do this."
40:38Like when I first learned about data
40:40neutral delta neutral,
40:42I was obsessed. I was like, "How is that
40:44even possible?"
40:45That you can make profit without
40:48predicting a direction. My mind was
40:50blown.
40:53>> I think
40:54>> And now with AI now with AI earlier I
40:57So, I have a technical background.
40:59I used to code, do
41:01analyze data manually.
41:03Now I just you I know I can just write
41:05code this thing. I did this in few
41:07minutes without having to code my thing.
41:10And I can tell AI, "Hey, use this API,
41:12get this data
41:14and back test these 10 different
41:16strategies." And it tested like these
41:18seven strategies and all of them are
41:21winning.
41:21And now I just have to choose, "Okay,
41:23which one do I want to go with?"
41:25>> I mean, it's just insane how much AI's
41:28enabling average people to
41:31to have exponential growth, eh? I mean,
41:33but the thing is I don't like you've got
41:34to be racing with this AI technology
41:36because everyone's going to be doing it.
41:37So, you've got to be the the one best at
41:40it.
41:41>> Yeah, I mean, with AI um a lot of people
41:44do is go to AI and tell tell it
41:46basically, "Hey, dear AI, make me a
41:49million dollar strategy. Make no
41:50mistake."
41:52And that's not how it works.
41:54You basically have to give it your core
41:57idea and then it can improvise on it.
42:00And then it can test the data for you to
42:03let you know that, "Hey, it works."
42:06Like for example, there is another
42:08strategy which is a simple call buying
42:10strategy.
42:12Uh I also have a video on my channel
42:14about it. That strategy has a more than
42:1590% win rate.
42:17And on that video, you'll see hundreds
42:19of comments from people making a lot of
42:20money with that strategy.
42:22I use AI to test that data. What I did
42:25was I downloaded CSV data for um
42:29for QQQ stock.
42:32And I gave it to ChatGPT. I was like,
42:33"Analyze this data. I want to know that
42:35if I enter this
42:37enter buy this stock
42:40when the market drops 1%
42:42in the next 3 months, what is the
42:44average performance?"
42:46And it gave me data that 90% of the time
42:49if you buy when the market drops by 1%
42:52in the next 6 months, it goes up by 10%.
42:55It does not have to stay up there, but
42:57it goes and touches 10% level in the
43:00next 6 months.
43:02And then I created a simple call buying
43:04strategy where you buy a leap call with
43:061 year expiration
43:08and 50% profit target. That is working
43:10like amazing.
43:11>> That's totally crack-ass. That's totally
43:13crazy. I mean, the thing is though like
43:15it's so obvious. It's so obvious, but
43:17people aren't doing it.
43:19Like it's so obvious and it's so easy,
43:20but I
43:21The thing is right, so I have a question
43:22for you. Is everyone going to be
43:23millionaires in the future because of
43:24AI? Like but can any trader become a
43:27millionaire through AI in the next 5
43:29years, 6 years? What's your thoughts?
43:31>> I think anyone can become a millionaire
43:34if they are disciplined to learn and
43:37practice and manage the risk. Now,
43:39technically if you look at it
43:41there are a lot of people in the market.
43:43Some are billionaires. There are I
43:45recently went to Berkshire Hath Hathaway
43:47meeting in Omaha.
43:49Like I was dumbfounded that Warren Buff-
43:51We here we are talking about
43:52millionaires. Warren Buffett has built a
43:54trillion-dollar
43:56empire.
43:57Because he just gave it enough time and
43:59he was disciplined to keep it going.
44:03And there are a lot of billionaires
44:05there.
44:05And all of them are running like
44:07multi-billion dollar hedge funds, making
44:09billions of dollars.
44:11The difference between us and them is
44:13the skill and discipline.
44:15They have more experience, they have
44:17more skill, they have more discipline.
44:19So, if you can practice these three
44:21things,
44:22there is unlimited money in the market.
44:24You can make a lot of money. I think
44:26like even when we are thinking about
44:27millionaire,
44:28we are thinking small. The opportunity
44:31is much bigger.
44:32>> I think I feel inspired. I didn't expect
44:33that.
44:35I feel inspired by what's possible and
44:36it
44:37it's so it's so true.
44:40>> Yeah, I think going to Maha kind of like
44:42changed my perspective. Over there, I
44:44went to a private conference, which was
44:47invite-only. There were a lot of hedge
44:50fund managers there. Like Bill Ackman
44:52was there, Monish Pabrai was there, uh
44:55Guy Spier, a lot of uh big uh hedge fund
44:58managers that you hear about like
45:00operating at 100 million or
45:01multi-billion dollar level.
45:03They were in that room where there were
45:05like only 100 or so people.
45:07And uh going there kind of changed my
45:09perspective that there are levels to
45:11this game. Right now, we are thinking
45:13very small.
45:16>> But uh I mean, it's true. These guys
45:18like I was reading um I'll let you go
45:20back to the the other processes shortly.
45:21But I was I was reading a book by uh Ray
45:23Dalio. I don't know if you'll know. Ray
45:25Dalio is the he he's the CEO was the
45:28CEO. He's retired now of uh Bridgewater
45:31Capital.
45:32So, he's one of the the top hedge funds.
45:34And he He's got some books on debt
45:36cycles. But he he's made billions and
45:37billions and billions having one of the
45:38top hedge funds in the world at one
45:39point. And what's true what one of the
45:42first lines in the book that he said was
45:43is I'm not I'm not smart at all. I'm not
45:45smart at all.
45:47Uh
45:48I've made He said I made a lot of money
45:49by knowing what to do by
45:53uh not by not knowing the majority of
45:54things and just being able to work
45:56within the constraints of of what I
45:57know.
45:58And what he did is lot a lot of what
46:00you're doing and what I do now as well
46:01is he says me memory's terrible. I
46:03forget everything all the time. The
46:04multi-billionaire hedge fund guy says
46:06"My memory's terrible. Can't remember
46:07things." So, he just works with a system
46:09and it's that process, the repetition,
46:12working with a system,
46:14and he's reached multi-multi-billions.
46:18Just persistence.
46:19>> think once you Once you find Once you
46:22find an edge, once you find a system
46:24that works for you,
46:26then you just need to focus on it and
46:27keep it on repeat until it starts to uh
46:30it stops working. Eventually, like no
46:32strategy is going to have an edge
46:34forever. Some people do this mistake in
46:36backtesting
46:37um that they do a backtest for 10 years,
46:4020 years.
46:41Uh I think that is not wise because a
46:45strategy that worked 20 years ago might
46:47not be relevant today.
46:49It was a completely different market 20
46:51years ago. Today, we are in a very
46:52different market.
46:54So,
46:55you need to have a recency bias. Yes, I
46:57would like a strategy which is
46:58battle-tested for 10 years or more.
47:01But, what I want to know is is it
47:02working now? Is it working in the last 1
47:05or 2 years?
47:06So, I will have a recency bias for it,
47:08which is why
47:09I'm backtesting this strategy for the
47:11last 2 years
47:13because uh like 5 years ago Nvidia was a
47:15different company.
47:17Right? So, you need to have a recency
47:19bias.
47:20And uh you can just then use this data
47:24to do it. Now, I know that okay,
47:26I have done this strategy enough of the
47:28times for on a lot of different stocks.
47:31It's not going to work on every stock,
47:33but I know all the stocks on which it is
47:34going to work.
47:36Now, I can do that every quarter.
47:40>> But, yeah, but at the same time, it's so
47:42important to monitor your data, monitor
47:44the the results, the probabilities to
47:46make sure that something a trend isn't
47:48changing.
47:49Um
47:50It but it's it's really interesting
47:52because the market has a has evolved a
47:54lot. And when you're talking about no
47:56point checking back 20 years.
47:57Most people who invest just I dust color
48:00dust cost dollar average. It's like the
48:03strategy that everyone does the cost
48:04dollar average. But I was thinking I was
48:06looking at some charts in the 1930s
48:07after the Great Depression. If you
48:09dollar cost average in the 1930s, you
48:11you would have ended up losing 90% of
48:14your money.
48:15But then but then also in the in the
48:171930s the market would go up 20% in a
48:18month. It would have a 20% increase in a
48:21single month. It was it was much more
48:22volatile. We don't get those moves as
48:24much now.
48:25>> So we we just saw a move over the last
48:28one month where it was close enough to
48:30that.
48:31>> Uh the Q the Q an index I mean it the Qs
48:34>> went up like the Qs went up like 15% in
48:37in a month.
48:38>> Oh there you go. So maybe maybe things
48:40can crash maybe things can crash to 90%
48:43on the next crisis. Who knows?
48:45But but uh now you're right. The Qs the
48:47Qs after the um
48:51after the Iran threat. Are you talking
48:53about the Iran war threat? It dropped in
48:55and with the whole of the AI revolution
48:57the Qs have gone like 18%. That's AI
48:59though it owns half of the Nasdaq like
49:01it doesn't it? It's it's weird it's half
49:03of Nasdaq.
49:04>> When chat GPT came
49:07I bought a leverage ETF
49:09called TECL
49:11at $20.
49:13It's a 3x leverage technology ETF.
49:15At that point I was like I do not know
49:17which companies are going to be winner.
49:20But I think
49:21this AI revolution is going to be the
49:23biggest revolution in tech we have seen
49:26in our lifetime.
49:26>> Yeah. Yeah. Yeah.
49:28>> So I was like okay I'm going to put
49:29money in this leverage ETF 100k
49:31invested. I'm willing to lose.
49:35That is now close to a million dollars
49:36now.
49:37That stock that is now at $200.
49:42In just like three three four years.
49:45>> Like that's such an intelligent thing to
49:47do.
49:48>> So if you are
49:50if you if you put effort in your skill
49:53and you have discipline
49:55then then and you also need to have
49:57risk-taking ability.
49:59Now, people say that putting money in
50:01S&P safe.
50:03Like I showed you my account, my
50:05drawdown is lower than S&P.
50:09So, if you have lower drawdown than S&P
50:11and your returns are like exponentially
50:13higher
50:14your risk-adjusted returns are through
50:16the roof.
50:17>> Well, I think what you did with ChatGPT
50:20coming out and putting the 100K in the
50:22leveraged DTF was a
50:25it's an incredibly well-timed smart
50:27move. I mean, because it
50:29we knew when we saw ChatGPT, it was like
50:31nothing we'd ever seen in the world
50:33before. We didn't know how how it would
50:35advance or how fast, but we I I think
50:37when ChatGPT came out, we knew the world
50:40had changed forever and it was a matter
50:41of time.
50:43So,
50:44it's interesting. But, do you want to go
50:45back to your to the to the second
50:47strategy? I keep throwing you off the
50:49the PowerPoint, but it's it's
50:50interesting to talk to you, so.
50:52>> Yeah, let's go to the second strategy.
50:54So, now you're going to construct this
50:57strategy in a lot of different option
50:58structure. In the other strategy that I
51:01really like, which I think has a better
51:03risk-reward
51:05is I call it the theta machine.
51:08It's a time spread strategy.
51:10In a time spread strategy, what we are
51:12going to do is
51:14now think let me give you an analogy of
51:16like an Airbnb business.
51:19Think about this. I rent out an
51:20apartment. I'm paying $5,000 a month
51:23rent for it. And then I go list it on
51:26Airbnb for $500 a night. Maybe I have I
51:30sell 20 nights in a month. So, and I
51:33have some operational cost. So,
51:35basically I'm spending like $7,000 on
51:37this apartment all in and I'm pulling in
51:40$10,000 and I make $3,000 profit.
51:44I do not own the property. I do not have
51:46any significant investment in it. The
51:48only thing I have is a lease.
51:50Right? And I can earn a monthly income
51:53from it.
51:54We can do the same thing with options.
51:56Technically, if you wanted to do that
51:58with Airbnb, it's not profitable in
51:59today's time.
52:01But it is very lucrative and very
52:03profitable with options.
52:06So, what I'm going to do is
52:09uh
52:10So, there are a couple different types
52:12of strategies. One is calendar spread
52:14and one is diagonal spread.
52:16So, I really love calendar spreads. This
52:18is one of my best performing strategy.
52:21So, let's say
52:22I think S&P right now is trading at
52:25$740.
52:27I think over the next
52:29um
52:29few weeks it can go higher.
52:31Let's say I think that in the next 3
52:34weeks
52:35it can go higher. So, I'm going to go
52:37with
52:37Let's do it on Qs.
52:40So, okay, let's try try it on Qs. So, I
52:43think in the next 3 weeks Qs can go a
52:45little higher. I don't know how much
52:48higher,
52:49but I know maybe it is going to be
52:50higher than today.
52:52So, that means my time period is going
52:54to be
52:55I'm going to
52:57buy an option for 18 June and sell an
53:00option for 12 June.
53:02So, the way it works is
53:04we are going to buy a longer term option
53:07and we are going to sell a shorter term
53:09option against it. The term structure
53:11can vary depending on your trade
53:13outlook.
53:15So, the way it works is
53:17when you have buy an option, you are
53:19paying daily theta on it. Think of it
53:21like a daily rent.
53:23And when you sell an option, you are
53:24earning that daily rent on it.
53:26Now, theta is not linear. The way it
53:29works is that options which are expiring
53:32in near term
53:34are going to have higher theta decay
53:36versus options which are expiring in
53:38longer term.
53:39So, what I'm going to do is I'm going to
53:42sell a short-term option which is
53:44represented here in the red line.
53:47>> Yeah.
53:48>> And then I'm going to buy a long-term
53:49option which is represented in green
53:52line.
53:52Now the theta decay on the short-term
53:54option is going to be fast.
53:57And the theta decay on long-term option
53:59is going to be slower. So when we start
54:02there is like this gap between
54:04differential between their premiums.
54:06As the time passes, you see this gap
54:09grows.
54:10Because your near-term option is growing
54:12at a faster rate.
54:14As this gap grows, this is our profit.
54:18This differential is our profit. This is
54:19where our edge comes from. So as this
54:22gap is you we go through the time, the
54:24gap is growing, the profit goes up.
54:26That's how this strategy works.
54:28So and we can model it again using
54:31option strategy and see how exactly it's
54:33going to work. Now
54:35I do not know where the price is going
54:38to land, but I can use the Greeks to
54:41guide me for it. So what I will go is I
54:44will sell my short option at 20 delta.
54:48So 20 delta is going to be somewhere
54:50around
54:51$740.
54:53So this is at 23 delta. I'll go with it.
54:56So I'm going to sell a 740 call
54:59uh for June 12 expiry. And for the back
55:03week I'm going to buy 740 call at the
55:05same price.
55:09Now
55:10the way this it is going to work is I'm
55:12going to earn theta premium for it. Plus
55:15I have a direction. This is a bullish
55:17trade.
55:18In this trade we want the market to go
55:20to 740 strike.
55:23Now this says that there is 23 delta. So
55:26that means technically there is 23%
55:28chance of that happening.
55:30And uh
55:32and the price here uh the chance of
55:35profit here is 29%.
55:38So, it is still higher than 23 because
55:40we are getting theta premium for it.
55:43Now, if the price goes up slowly into
55:45this
55:46So, if the price goes up higher like
55:48this
55:49then in this trade we can make like well
55:51over 300% profit. In this trade our max
55:54loss is just $162. So, it is a very
55:57cheap and low-risk trade to put on.
55:59And the upside can be $618.
56:04So, I can make like more than 300%
56:06profit in this kind of trade.
56:08But, when I get into this trade
56:11I have to wait till here, till
56:13expiration to hit that bull's eye.
56:15But, I'm not going to be waiting till
56:17there because there are chances that
56:19market can go up and then come back
56:21down.
56:22Right? So, if it goes into 20, 30, 40,
56:2650% profit in a week
56:28I'm going to book my profit.
56:30And then I'm going to wait for another
56:31pullback and make this trade. So, let's
56:34say if someone made a trade like this
56:37just yesterday.
56:39Yesterday this option spread was trading
56:41at $100.
56:43Today it's $164. So, it's up 64% in just
56:461 day.
56:48So, with a trade like this we can have
56:51asymmetrical risk reward.
56:53And if you're taking profit early
56:56you can have a higher win rate.
56:59And uh
57:01sometimes if you want to wait for the
57:02maximum peak profit, you can also do
57:04that. I have had trades where I've made
57:06200%, 300% profit.
57:09Or if you want uh something with higher
57:12probability, you can reduce your strike
57:14price to 30 delta.
57:17So, 730 is going to be about 30 delta.
57:20And now we will have higher probability.
57:22Risk reward is slightly worse now. Now,
57:24this is
57:26um
57:27$194 max loss.
57:30Max profit $600. Still, it can be a
57:32multi-bagger trade.
57:34And all I need is the stock to go up a
57:36little bit. I can book profit at any
57:38point in this zone.
57:40>> So, just just make sure I understand
57:42this cuz this is a something I've never
57:44seen before. See, you're buying the 730
57:47call
57:48and then you're also selling the 730
57:50call, but the the call that you're
57:52selling
57:53you're you're selling earlier on because
57:56you want
57:58the better theta, right? And the one
58:00that you're buying is further out. So,
58:01you make money on the theta as as one
58:03thing.
58:05>> Yes.
58:05>> Um and then you also want the the stock
58:07to go
58:09because when the stock was towards the
58:10level when the stock goes towards 730,
58:13does it it doesn't really make
58:14Does it matter because one calls
58:16canceling out the other one? So, you're
58:18only making the theta, no?
58:20>> So, in this trade, you can make this
58:22trade a bullish trade, a bearish trade,
58:25or even a neutral trade. It all depends
58:27on where your strike price is. Strike
58:30price is basically your price target.
58:32If the price goes to your price target,
58:35that is where you make maximum profit.
58:37>> Yeah.
58:38>> So, you have bullish direction to this
58:40trade.
58:41Now, if I bring these strikes down
58:46So, if I bring these strikes down to
58:49$710
58:51Now, this becomes a delta neutral trade.
58:54Now, in this case, I make profit if the
58:57stock trades in this range.
58:59So, now I need the stock to stay flat.
59:03>> But But if you buy a call and sell a
59:06call at the same price, does that not
59:07cancel cancel it all out? Because
59:11you just done answered options.
59:14>> So, like I explained in the previous
59:16illustration there is a difference
59:18between deltas and thetas for the option
59:21at the same strike. For example, let's
59:24go back to the 730 example.
59:26So, on the option that we are selling,
59:29uh we are getting 32 delta.
59:32>> Yeah.
59:33>> So, but we are short selling this
59:34option. So, we are short 32 delta.
59:37>> Yeah.
59:37>> And uh we are theta positive here. So,
59:40we are earning $31 theta from this every
59:43day.
59:44>> Yeah.
59:45>> And the option that we are buying has
59:47higher delta.
59:48>> Mhm.
59:49>> Slightly higher. So, this is 35 delta.
59:52And here we are paying $29 theta. So, we
59:55can go here and this tool will show you
59:57aggregate graphics, um aggregate
1:00:00metrics. My total delta after the full
1:00:04spread is 2.6.
1:00:07My theta is $2.
1:00:09So, that means on a trade which is
1:00:11costing me just a little over $100,
1:00:14I'm going to earn $2 a day, which is
1:00:16basically like close to 2% a day.
1:00:18>> Yeah.
1:00:19>> And as we go closer to the expiration,
1:00:21this is going to increase.
1:00:23Now, 2% a day it does not sounds a lot,
1:00:26but if the price works your way and you
1:00:29are earning theta, the theta is going to
1:00:31accelerate.
1:00:32So, very high probability that I can
1:00:35make somewhere between 30 to 50% profit
1:00:37in the next 1 to 2 weeks.
1:00:40>> Yeah, that makes that that makes sense.
1:00:42And then
1:00:45you're making money on the delta as well
1:00:46because they've got different deltas
1:00:47based on the time that you put them on.
1:00:49So, you're making money on the delta.
1:00:51That that that calculation between the
1:00:53two deltas and the two thetas, you're
1:00:54making the difference
1:00:56as it goes.
1:00:57And the more time you leave it, the
1:00:58better because you're making money on
1:01:00the theta ultimately.
1:01:02>> Yeah. Yeah, I actually want the market
1:01:04to move slower, right? Typically, an
1:01:06option buyer wants the market to move
1:01:07fast for them to make profit.
1:01:10Here, I like it to move slowly. I want
1:01:12it want a slow grind grind.
1:01:15And then I can make profit.
1:01:18And if I make faster, if the market
1:01:20moves faster, let's say over the next
1:01:23Nvidia has blockbuster earnings
1:01:24tomorrow, the stock goes up to like 7:30
1:01:27over the next week.
1:01:28I'm still happy with 30 to 40% profit in
1:01:30a week. Then I can close this trade and
1:01:33open my next trade.
1:01:35So and if I'm neutral on the market, I
1:01:38can just do it at the current price. And
1:01:41then this becomes a delta neutral trade.
1:01:45And another thing, if I'm bearish on the
1:01:48market,
1:01:50I can do a put calendar. Here is I can
1:01:52go and sell 680 put, which is at 21
1:01:56delta.
1:01:57Now if the if now let's say Nvidia has
1:01:59bad earnings tomorrow, market drops,
1:02:03then this trade can this trade has
1:02:05potential to make 446% profit.
1:02:09So yeah, it has a low probability. The
1:02:12probability is 35%.
1:02:14But the upside is 500%.
1:02:17>> Yeah.
1:02:19So So when you on the earlier example,
1:02:21when you're talking about the Qs and you
1:02:22were put them in the 740s,
1:02:25so you're you're win a lot of money if
1:02:27it goes to the end of the theater or you
1:02:30if you hold the trade for a longer time,
1:02:32you make more money. If it reaches the
1:02:34740s, you make more money. What happens
1:02:37if it just doesn't move or it goes the
1:02:39wrong direction? Is that is that a
1:02:41that's a loss?
1:02:42>> So if it does not moves, uh so in this
1:02:46case,
1:02:47it all depends on what strike price we
1:02:49choose. If I want to be slightly neutral
1:02:52to bullish, let's say I want a trade
1:02:53which is slightly bullish,
1:02:55but gives me some uh downside
1:02:58protection. I love downside protection.
1:03:00I like to make profit if the stock moves
1:03:03uh up, but if the stock comes down, I
1:03:05would love some downside protection.
1:03:07Then I can make a trade like this.
1:03:09Uh where
1:03:11>> [clears throat]
1:03:12>> let's say I can make a trade at 715
1:03:14strike.
1:03:15It is slightly bullish. If market goes
1:03:17up, I make profit. If the market comes
1:03:19down,
1:03:21then my break even is 698.
1:03:24Currently, it's trading at 711.
1:03:27So, I have about 12 to 13 points
1:03:30downside protection
1:03:32against a drop.
1:03:34>> And how did you get that? Is that
1:03:35because you get the theta? Does the
1:03:36theta give you the downside protection?
1:03:38>> Yes.
1:03:38>> That's how you get the
1:03:39>> Right.
1:03:40Yes, now my theta is minimal. Now my
1:03:42delta is minimal, less than one.
1:03:45But my theta is higher.
1:03:47>> Yeah.
1:03:48>> And I can even do this trade with a
1:03:49shorter duration. Let's say I think I
1:03:51want to make a trade with just one week
1:03:53duration.
1:03:54I can make a trade like this
1:03:57where
1:03:58if the market stays flat, I make profit.
1:04:01If the market goes up, I make profit. If
1:04:03the market comes down a little bit,
1:04:05I make profit as long as it trades in
1:04:07this 701 to 730 range.
1:04:11>> Just to make sure make sure I got this.
1:04:12So, a lot of people might say, "I think
1:04:15that the QQQ is going to go to 740 and
1:04:18it's currently at 720."
1:04:20They'll put the call option on
1:04:22for 740, and then they'll just panic if
1:04:25it doesn't move towards 740 because
1:04:27every day they're losing money.
1:04:29But the way you do it
1:04:31means that you get the actual theta.
1:04:33That means even if the stock doesn't do
1:04:34anything, I'm making theta right now.
1:04:36So, you get paid to wait a bit more.
1:04:38>> Exactly. We are getting paid while the
1:04:41price moves our way.
1:04:46>> I don't know why more people don't do
1:04:47this.
1:04:48>> Because people don't know about it.
1:04:52>> [laughter]
1:04:54>> It's fantastic. I absolutely love this.
1:04:56It's it's because it's it's not rocket
1:04:58science. I mean, it's just putting one
1:05:00more call
1:05:01on onto the option that you are going to
1:05:03put anyway.
1:05:05>> Yeah, I would
1:05:08I mean, this is why my account has such
1:05:10low drawdown because I use strategies
1:05:12like this.
1:05:14And if there is another there are levels
1:05:16to it. There is next level is I can buy
1:05:18both call and put calendar
1:05:20and make profit both ways.
1:05:23I don't even have to predict the market
1:05:25direction.
1:05:27>> Yeah, you can literally be paid to be
1:05:28wrong. You can you can be paid to be
1:05:30wrong or you can be paid when the stock
1:05:32does nothing.
1:05:33You can just sit there and make money.
1:05:35>> Yeah, exactly. And in a trade like this,
1:05:37if you are right, you can make a lot of
1:05:39money.
1:05:40If you're wrong, your loss is actually
1:05:42pretty small. You can do these kind of
1:05:44trades with as little as $100 to $200.
1:05:47So, even if you have a small account,
1:05:50you should never buy call. This is the
1:05:52way to go.
1:05:54>> That's crazy. But and obviously the only
1:05:57way you lose is if you get it completely
1:05:58wrong, which when you're buying the
1:06:00larger cops larger cap stocks on a on a
1:06:02bullish market, it's
1:06:04if you buy in decent companies in a
1:06:05bullish market, it's not often that
1:06:07you're going to get a the stock will
1:06:09completely the wrong direction. And if
1:06:10it does, you just buy more.
1:06:12>> And you can the great thing is
1:06:14you can do this kind of trade for any
1:06:16trade duration.
1:06:18If you think you need 3 months, you can
1:06:21do a 3 months long trade.
1:06:23And
1:06:24and you just use the delta. Just sell
1:06:26between just buy between 20 to 30 delta.
1:06:30There is very high probability that
1:06:31eventually the stock price is going to
1:06:33go and touch it.
1:06:36>> And and say if you buy it a month out,
1:06:37what's the what's the spread between the
1:06:39options there? If if you're buying a
1:06:41month out, you buy like
1:06:43uh is it like or you can tell me you'd
1:06:45buy say it's
1:06:47Google whatever 400 calls
1:06:49and you want it to reach 400 in a month.
1:06:52How would you position those?
1:06:54The buy and the sell call.
1:06:56>> Right. So, if I think I want to buy
1:06:58Google, I can make a trade like this,
1:07:00which is 4 weeks out.
1:07:03And um
1:07:05I will sell
1:07:06a 400 call for June 18
1:07:10and buy a 400 call for the back month.
1:07:13And in this case, my max loss is just
1:07:15175.
1:07:17Max profit can be 575.
1:07:20Huge asymmetric risk reward.
1:07:22And even if it stays flat,
1:07:26I can still make profit. So, let's zoom
1:07:28in a little bit. So, let's say I make
1:07:29this trade and the stock does not moves
1:07:32at all, it stays flat for the whole
1:07:34month, you can still make close to 50%
1:07:36profit here.
1:07:38>> So, just to get this right, you buy you
1:07:39buy the call saying June and then you
1:07:41you'd sell you'd sell the call
1:07:44or it's the other way around. You'd sell
1:07:46the call in June and you'd buy the other
1:07:47one in July. Is it like that?
1:07:49Or is it the other way around?
1:07:50>> Yeah. Well, yeah. So, we sell a short
1:07:53term. So, let me go back to this graphic
1:07:55again.
1:07:57>> Uh you sell a short term
1:07:58>> Yeah, I link short term and we are
1:08:00buying long term.
1:08:01And we make profit from the difference.
1:08:04>> And is there ever a point where you just
1:08:07let the short term
1:08:09expire and then just hold hold the long
1:08:11term to keep going or you always close
1:08:12together?
1:08:14>> So, usually I don't. Usually, I close it
1:08:17for profit before expiration
1:08:19uh because in that case um
1:08:22uh
1:08:24because usually when that happens
1:08:26um
1:08:28this is uh okay, I close it for uh
1:08:30because if the short leg expires, then
1:08:33I'm just holding a long call.
1:08:35Then I'm paying theta for it.
1:08:37I don't want to pay theta.
1:08:39So, which is why I will close it before
1:08:41expiration, but sometimes I see my
1:08:44trades
1:08:45which I was happy to take close for 50%
1:08:48or something profit
1:08:49after my short call expired,
1:08:52long call went parabolic.
1:08:54And it went up 300% 400%. So, there are
1:08:57scenarios like that.
1:08:59But, that's not the game I'm playing.
1:09:02I want consistent returns. I'm
1:09:04compounding week over week.
1:09:07My account is compounding at 8 to 15% a
1:09:09month.
1:09:10And with that kind of return, with such
1:09:13low drawdown,
1:09:14in 2-3 years it's going to it can go to
1:09:17eight figures even.
1:09:18>> The This is genius for me. It's totally
1:09:21genius. Um And the best things that I
1:09:24generally like genius strategies are
1:09:26that they're so simple
1:09:28and they're so simple and beautiful to
1:09:30execute, but it's nothing nothing too
1:09:32complicated, is it? It's not too
1:09:34complicated. I mean, I've understood
1:09:36everything you've said in in a 50-minute
1:09:37session.
1:09:39>> Yeah, exactly. Because um
1:09:42because the way when people try to learn
1:09:44it is
1:09:45they start they get intimidated by a lot
1:09:48of things because nobody really breaks
1:09:50down in such simple terms.
1:09:52Uh they talk about Greeks and all those
1:09:55things and uh charting and technical
1:09:57analysis. It was intimidating to me also
1:10:00initially.
1:10:01But what I figured was that instead of
1:10:04learning everything like a reading a
1:10:06full textbook,
1:10:08focus on a couple of strategies and
1:10:10master them.
1:10:12And after some experiences, everything
1:10:14starts to make sense to you. Then it
1:10:16becomes second nature.
1:10:18Options is all about the probability.
1:10:20The reason why a lot of traders lose,
1:10:23even if you give them a profitable
1:10:25strategy,
1:10:26they don't understand the expected
1:10:28value. They don't understand what the
1:10:31risk is, what the reward is, what's the
1:10:33win rate, how does that affect their
1:10:35overall profit and loss.
1:10:37With options, you get it up front,
1:10:39right? You get up front.
1:10:41That this much profit it can make. This
1:10:43is your maximum side potential. This is
1:10:46your chance of profit.
1:10:48It is all baked in the data.
1:10:50And with tools like this, it makes it
1:10:52very easy to understand.
1:10:54So, I did not learn options by reading a
1:10:57textbook or by watching a lot of videos.
1:10:59Yeah, I did watch a lot of videos on
1:11:01YouTube on Theta profits uh
1:11:03on Tastytrade channel, and I learned a
1:11:06lot of strategies from there.
1:11:07But, you basically learn by doing. It's
1:11:10math.
1:11:11You do not learn math by theory. You
1:11:13learn it by doing.
1:11:15So, you have to put it in practice. I
1:11:17would spend I used to spend a lot of
1:11:18time. I still do.
1:11:21Going into this tool and modeling
1:11:22different trade ideas and see how they
1:11:24work.
1:11:26And there's another great thing in this
1:11:27tool. Once I make this trade, I can just
1:11:29save this trade.
1:11:30And this is like a paper trade now. Now,
1:11:33it is going to track it in my account on
1:11:35how this trade works.
1:11:37And you can even go and see its chart
1:11:39and see how it's working.
1:11:42So, let's say you bought this call
1:11:44calendar on Google 1 week ago
1:11:47when it was trading at a higher price.
1:11:49Even though the stock price has come
1:11:50down, you can see
1:11:53that the options has not lost any value.
1:11:56Stock price came down,
1:11:58but you you're still flat on your trade.
1:12:02This is why it works so well.
1:12:04>> To just to close it out, I guess do you
1:12:06have any
1:12:07final thoughts about how someone else
1:12:09can get started and and
1:12:12they not they don't have to You've heard
1:12:13of Black-Scholes formula and the the big
1:12:15the big black book of Black-Scholes
1:12:17formula and the book They don't need to
1:12:18read that.
1:12:20>> I think that is what makes it
1:12:22intimidating for people because they
1:12:24hear about all these complicated
1:12:26formulas. But, with tools like this, you
1:12:28don't have to
1:12:30go deep into it.
1:12:31You can start with just focusing on
1:12:33delta and theta
1:12:35and start to make some paper trades.
1:12:37Basically, understand how it works.
1:12:40And you will learn by experience.
1:12:44>> That's been incredible. I think this has
1:12:46been one of the the episode where I've
1:12:48learned the most and and had my eyes
1:12:50open. So, really really appreciate you
1:12:52delivering all of this this knowledge
1:12:54and information. It's so valuable.
1:12:57Thank you for giving back, and thank you
1:12:59for being transparent. Do you have any
1:13:00final thoughts or anything else you want
1:13:02to close in on?
1:13:03>> Um yeah, I would say
1:13:06uh one of the biggest problems that I
1:13:08see with a lot of traders I work with,
1:13:11they learn a new strategy, and they are
1:13:14excited they are thrilled with it with
1:13:15it they are very enthusiastic about it,
1:13:18and then they start to make big trader
1:13:20big trades right off the bat, and they
1:13:22lose money, and they think that the
1:13:23strategy does not work. They hop onto
1:13:26another strategy, do the same thing,
1:13:28which is why a lot of traders can spend
1:13:30years chasing different strategies and
1:13:32losing money.
1:13:34But what you need to do is trade small,
1:13:37and give it time.
1:13:39I don't If I learn a strategy,
1:13:41I don't mind trading it for 3 months or
1:13:44even 6 months with just one contract,
1:13:46risking couple hundred dollars on every
1:13:48trade.
1:13:49Because if it works for me over that
1:13:51period, I will make 20 to 50 trades with
1:13:54that strategy. If I'm winning most of
1:13:55them,
1:13:57that gives me a good understanding of
1:13:58yes, this is profitable,
1:14:01and then I have rest of my life to use
1:14:03that strategy, and I can compound
1:14:05compound it.
1:14:06You don't think of it in a way that I
1:14:08learned this, I need to make all the
1:14:10money today.
1:14:11Start by practicing it. Take it slow.
1:14:14You We people People spend 4 years going
1:14:17to college, spend six figures in
1:14:19tuition,
1:14:20and then they do internship, then they
1:14:22work at a job for few years. It takes
1:14:24them 10 years to build a career where
1:14:26they are at a point where they feel that
1:14:28they've achieved some level of success,
1:14:30but with trading, people think that they
1:14:33should do it in a week.
1:14:35It's It does not work that way. So, you
1:14:37have to develop your skill and be
1:14:39patient. It's not going to take 10
1:14:41years. Most people, if you have the
1:14:43right direction, you can learn it in 3
1:14:45to 6 months. And I think if you put in
1:14:48that level of effort and discipline, it
1:14:50can be life-changing.
1:14:51>> Where can people find you if they've got
1:14:53any questions?
1:14:54>> Yeah, you can reach out to me on I have
1:14:55a YouTube channel called Options with
1:14:57Ravish, and I also have an Instagram.
1:15:01It's called Hey Ravish. You can search
1:15:03or find the link in the description.
1:15:06>> Thank you so much for your time, Ravish.
1:15:07It was absolutely amazing, and you've
1:15:10delivered tremendous knowledge that I'm
1:15:12sure is going to change a lot of
1:15:13people's lives.
1:15:15>> Thank you, Stephen. It was a pleasure
1:15:17speaking with you.

About this transcript

This page contains the full transcript of The Delta-Neutral Setup: How To Profit In Any Market Direction by KINFO, generated from the public captions YouTube serves with the video. The transcript has 13,380 words across 2,134 segments, with the original timestamps preserved so you can click any line to jump to that moment in the embedded player.

What you can do with it

Use the transcript to take notes, quote the speaker, build a study guide, generate a summary with ChatGPT or Claude via the YouTube Summary tool, or export it as a timed subtitle file with YouTube to SRT. You can also re-open it in the transcriber to choose a caption track available on the video.

Free YouTube transcript tool

YouTube2Text is a free YouTube transcript generator — no signup, no daily limit. Paste any YouTube link and get the full transcript instantly, with timestamps, click-to-jump, caption language selection, AI prompts for ChatGPT, Claude, and Gemini, and exports to TXT, SRT, VTT, or Markdown.