BY ANDREW GIOVINAZZI
October 6th, 2025
Yo Pit Crazies!
I’m living in The Upside Down right now, and it’s messing with my head.
Stocks are running to all-time highs so my portfolio’s loving it, but something’s seriously wrong when it’s happening like this:
It should not be like this.
But there’s a reason traders are chasing the upside like maniacs.
OpenAI, a company with $13 billion in revenue (yet holds a whopping $500 billion valuation), announced it would start buying chips from Advanced Micro Devices (AMD).
AMD shares were up 23.71% on the news.
So why’s the market moving up at the same time as volatility?
Option traders are discounting two massive unknowns
First unknown: We’ve got a food fight in Congress over Affordable Care Act subsidies. These subsidies sailed through twice before – in 2021 during COVID and again in the Inflation Reduction Act (2022). Now both parties are willing to die on this hill, and that’s creating shutdown uncertainty.
Here’s what that means for your trades: Anytime there’s an unknown, VIX and volatility spike. Right now, traders are pricing about $20 of movement in SPY over the next 30 days.
That’s roughly the breadth of our entire rally since shutdown talks started.
Second unknown: These insane valuations that make zero fundamental sense. When OpenAI can command a $500 billion market cap on $13 billion in revenue, we’re definitely not in normal times.
Why my usual volatility strategies are getting chopped up
This combination’s playing havoc with normal market correlations.
My volatility plays that usually work in uncertain environments are getting destroyed because traders want upside exposure regardless of risk.
When the market’s pricing two conflicting unknowns – upside valuations AND shutdown risk – there’s no telling how it’ll end.
Her track record in this market is a beautiful thing to behold.
To Your Trading Success,
AG