Market Anomalies: Why 'Cheap' Options Are a Trap

Four questions from the inbox, and the last produces the most useful warning either host gives. If a price looks strange on your screen, it is strange for a reason. Everything the market knows is already embedded in the chain, and you are not picking anybody off. Also here: why the short end moved far more than the long end after a jobs report nobody saw coming, the single test one of them uses to judge whether downside premium is worth selling, and why a financing trade that works in an index goes wrong in a single stock. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 0:00 Four questions from the inbox 0:35 Why the curve is flattening 1:18 Why the short end reacts 2:01 Clearing the whole book 2:42 A losing trade he keeps 3:42 Why positioning data lags 5:01 A pure capital management trick 5:52 Reading the skew directly 6:40 A third of the width 7:19 The financing trade question 8:00 Setting one up properly 9:04 It is a profit and loss 10:18 Never do this in equities 11:10 How borrow costs hide 11:53 Where the shorting actually happens 13:00 Building the synthetic short 13:56 They are not making mistakes #tastylive #optionstrading #skew #yieldcurve #boxspread #hardtoborrow #putcallparity #optionseducation #tastytrade #trading tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.