Are Traders Getting HOODwinked?

Yo Pit Crazies,

The Fed walked the line just right this week.

Stocks continue to move higher, and unless a hurricane comes blowing into town I am not sure anything can stop equity prices.

Mark and I knocked out a Robinhood Turbo Trade Session yesterday, and at this point, 5,000 for the S&P 500 by the end of the year is not crazy — it’s only 5% away from where SPX sits now.

I’ll include Mark’s SPY goody from the Turbo Trade inside today. It’s very nice.

Speaking of Robinhood, I have something to show you here. Lot’s of trades closed in The Rundown today. That 14.73 print for VIX generated a lot of put closes.

Speaking of Robinhood I have something to show you here.

Estimating Hard-to-Borrow

The hard-to-borrow rate is simply the annualized interest rate the options market charges traders to use to short a stock.

That is a mouthful, but that is what it is.

For instance, if I want to short a stock, how much will the option market charge me?

To short Robinhood Inc. (Ticker: HOOD) that is 86.44% on an annualized basis.

This also means the puts are insanely bid relative to the call prices. (Here is an advanced training session on the Hard to Borrow (HTB) topic. And if you want this kind of Option Pit Pro-level education, call Customer Care today at 1-888-872-3301.)

I bought some HOOD Dec. 17 40-strike calls yesterday …

The huge borrow rate got me looking at HOOD.

One of our Pro students uses volume flow and the Edge Hunter Hard-to-Borrow sheet to help look for blowout upside.

He closed a trade in Cassava Sciences Inc. (Ticker: SAVA).

The Rundown

Capitol Gains w/ Frank Gregory
Option Pit DC and Wall Street insider Frank Gregory and I run a portfolio approach to trading options with stocks that have good long-term prospects based on Frank’s K Street knowledge and my options expertise.

  • I closed some QuantumScape Inc. (Ticker: QS) call spreads today with the position up about 15% holding the put.

Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session. 

The Pro Room used the VIX crash to take profits, but Giovanni won today with a 3x for calls bought in SAVA.

Some Pro members are also jumping on Big Money Flow ideas:

Big Money Flow

Each week, Option Pit CEO Mark Sebastian looks at size institutional option buying with a twist.  He mostly buys calls or puts to ride the large momentum trades


Robinhood Trader:
Option Pit CEO Mark Sebastian uses the Robinhood Gamma Radar to find order flow in active MEME  names.


  • In the Turbo Trade, Mark and I like the SPX Dec. 31 4900/5000/5100 call fly for $8.

Trading Legion:
The Trading Legion is an intermediate-level education and a long strangle/calendar trading vehicle. The goal is to teach students the best times to buy options.

  • I closed the SPY Nov. 12 465 call for a 100%+ gain and 30% position gain with SPY put fly to hold until next week.

Volatility Edge & Volatility Trading Club:

Volatility Edge is run by Mark and uses the proprietary Option Pit VIX Light indicator to guide volatility trading. The Vol Trade Club is run by me (AG), and employs a long strangle strategy that seeks to use VIX future decay to pay for upside VIX, VXX and UVXY options.

The Option Pit VIX Light Is Red with a low print in VIX of 14.73 this morning.

Mark closed the UVXY Nov. 5 16.5-strike puts for an 89% gain this morning.

I closed a lot of puts for VTC but the positions are still open.  Scratch, 10% gain and 15% gain running with protective still open on three trades.

Remember, a lot of vol strategies I use are market neutral. That means whether SPX or VIX go up or down, the positions still make money. This is a technique you can learn in the Volatility Trading Club and Volatility Edge!

To Your Trading Success,


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