Show: Market WineDown Episode: 1 Title: Iron Condor Overnight Risk, the TACO Trade & Stop-Loss Debate | Market WineDown Show Ep. 1 Date: May 01, 2026 Runtime: ~27 min Video ID: uQiaSCJcdIk URL: https://www.youtube.com/watch?v=uQiaSCJcdIk ============================================================ That is a little Midnight in Paris vibe. We're on the Market Wind Down. This is my co-host Mark Phillips. And this my co-host Lex Luthor Gauzen. Here we are, boys. This is going to be our first episode. We're going to plod through this today. It's not scripted. We don't even know what we're going to say. We do, however, know what we're going to drink. So, we'll get to that in a second. Um but the idea here, Mark, is every Thursday at 3:15 p.m. Central, 4:15 p.m. Eastern, we're going to give you a wrap on the market prior week. Right now, clearly it's a Thursday, we're not going to have the Friday part of it. So, we'll be talking about Thursday, Monday through Thursday each week. And then we will get the Friday from last week on the show, too. We're not going deep unless you want us to go deep and you ask questions. But we're going to give you the highlights, and they're going to be based on option flow. Um it's going to be based on the market in general, what's going on in geopolitics, you name it. What else What else are we going to talk about, Mark? I think this is a great week to start this because we are on a synthetic Thursday, right now a synthetic Friday right now. The we're we're working as if this was the end of the week, right? Cheers to that. Yeah, I'll drink to that always. Uh and what a synthetic Thursday or synthetic Friday actually means is that it's not really Friday, we know it's Thursday. But guess what? There's no work tomorrow. You know why? Cuz we mackerel snappers, that's what everyone used to call me who wasn't Catholic. They used to call me a mackerel snapper because we Catholics aren't supposed to eat meat on Fridays during Lent. And hence the mackerel snapping, which is a fish, kind of funny. It's a delicious fish. I I mackerel. Yeah, I don't take any offense to that. I think it's kind of funny. And you know what? How many times have I missed um the fish thing on Friday? Um a lot. Sometime most of the time I don't know I'm doing it. Sometimes I deliberately know I'm doing it and then I start justifying it and rationalizing it with well, if I have a lobster and a nice shrimp sort of pasta, is that a sacrifice or not? I'm like, uh I think that's more decadent than the steak I was about to eat. But, you know I'm having fish tonight. I'm already excited about the fish I'm having tonight. It's going to be a nice decadent nice whole Oh, it's going to be fish can be just as luxurious as any meat. I know, that's why it doesn't That's the point. No, forget about it. And I'm not sure that's the the spirit I know I'm going to get the the very devout Catholics say, "Well, Lex, that's not the idea. You're supposed to be fasting, not just giving up meat, you knucklehead." I get that. I I didn't agree with you. Anyhow, let's get moving. Um all right, let's talk about the uh the week the week. We have a interesting week, right? Um of course I'm looking at the uh wine pairings. That's more important. So, What are you talking about? The market only closed up 11 points today. Nothing happened but a bang. It's totally perfectly priced. Yeah, perfectly priced. Nothing happened at all. It was only down 100 spook handles. Rally to being up How was it the high today? I want to say 25 points in the spooz? I think so. But, the problem is like we've talked about this. You can't trade overnight. Why why are you looking at the markets after hours? We we we've talked about this. We we can't have you doing that. Yeah, I mean I mean I agree with that. Um I think though that a lot of the retail folks who tune in and who follow um some of their strategy centers on harvesting premium. Did Did I just say Did I just say that? I just said harvesting premium. Um so, I will have to We might have to drink to that every time I say that. And And you know, we know what they're doing, right? So, they're using an SPX like product, probably SPX, super easy to decipher for a retail person. We'll talk about that some other time. But, they're selling stuff at night, probably iron condors, very safe, very defined risk, okay, love it. And they are harvesting and then they're taking this off mid-morning, right? Taking their profit, rinse and repeat. What is wrong with the strategy? Well, clearly the massive overnight news taco trade, you know, or something like that could just totally obliterate that thing. I will tell you sleep on that risk? I don't know. I I I'm an intraday person. If you're trading short-term, be there watching it. Like going to bed with a position like that on, especially when you're massively short gamma like that, no thanks. No. Yeah, I think it's a tough ways to sweat out a buck. Yeah, I think uh I agree with you. I I don't think anyone's doing it any any place near the money. I think most of these trades or these iron condors that are I'm going to say um eight delta on the shorts all the way down to three delta on the shorts, and they're taking out They're they're the proverbial pick up the the dimes and nickels in front of the steamroller, right? Just to be clear, are we talking about like you or we talking about like some other friend who has an eight delta iron condor? I'm asking for a friend, I swear. Um I have done this before. I will say it's been very successful. Um I have gotten snipped on from time to time, but I love the I love the vibe. I got to be honest, I love it. I love it. There's something so psychologically satisfying about collecting 90% of the time. That's why it's an eight delta trade, because eight delta goes wrong. Yeah, it does. And and what I've noticed is that on that iron condor eight delta iron condor overnight is that um when it goes wrong, it's really really really hard for it to go to full negative value or against you fully. So, if you have a $5 spread on, for it to get the $5, $4.95, $4.90, whatever, I got to tell you, that is that is so hard to get to, but if anything in between can happen. What I've noticed is it very rarely makes a jump from 70 cents to a buck 90 like that. You have plenty of time in the interim to say, "Uncle, I was wrong. I'm taking my exit strategy, which is 50% of my you know, max profit, and I'm moving on." Or I'm rolling. Okay, I'll I'll even accept that. So, you know, if you're if you're a hoper and a wisher and a prayer, and you know this mark from being part of that the group you're with on the automated side, the automation takes you out of that. It takes the emotion out of it and just does it. Right? I got to say, I'm so torn on stop losses because I think to your point, like in a structure like that, there are definitely times and places when you need to close out. Like you I I get that. I really do. But, uh there's part of me that also says, "You sold this premium for this amount and like, you know, on such a short duration, like what are you expecting to change? Like, you're not betting on the taco trade on a one-day like setup, like you're doing that to like you say, just somewhat systematically." So, I'm really torn on using the stop loss there because that's what you're getting paid for is to hold on. Like, why are you quitting when the pain gets, you know, bad? Right. So, are you are you an advocate of of letting that thing expire worthless almost all the time? Never taking it off for any amount of money, even if it's a nickel or dime? I think, you know, when I like bucket the world into like my two biggest use cases for options, right? I think about the long-term like structural trades that you're making, risk transfer, whether that's like a hedged equity or whether that's like an accelerated market return, you know, that, you know, they're different considerations. If you're doing something very short-term, like capturing your eight-delta iron condor, Mhm. you're getting paid to hold that risk is my opinion. And like if your window is less than 24 hours, like honestly, how much could change, right? Systematically using a stop loss, I think there are good arguments for, you know, you don't sell that kurtosis without wearing it sometimes. So, Yeah. you know, Yeah, I I agree. I think It's hard. I'm I'm torn as well because I don't I don't have it I don't have the statistical breakdown of it in front of me, but I know there are you know, I just qualitatively, I know there have been times that I've pulled the trigger, gotten out at my profit point, which isn't letting it expire worthless. Um, you know, a die at like 70, 80% of max. I've gotten out and had I not gotten out, that thing explodes in my face intraday, okay? Um, I've had other times where I've pulled the panic cord, the rip cord, and, you know, I did the right thing according to my plan, and, you know, had I not touched it, it would have expired worthless. And I've had the last one where had I not touched it, it it did it it did massive damage. So, it's a mixed bag, and you should probably look at the EV based on maybe letting it go to zero and letting it go to full, you know, full value and see what that looks like. I'm I'm guessing it's a negative EV, but it might not be. Maybe it's not. It's it's thin, right? Like the the edge in any like short option strategy isn't We're not talking like quadruple digits returns per year. We're not talking triple digits. Like not even like a few points over like, you know, cash is like really the only vol risk premium there is, right? Yeah. You know, you're you got to expect to take those losses for all that fat premium you collect. Fat premium you collect. Yeah, I'm going to let you know what it is. I'm going to do it for uh 60 days. No, 90 days. I'll let you know my P&L after 90 days. Yeah, I'm a buzzkill. I'm like, "Oh, options are no better than Treasury bonds, like maybe three points better." That That doesn't sell. That doesn't sell. All right, what happened in the market this week? Do you have it in front of you or do you want me to read it? Anything Anything exciting for you? Uh you know, it's interesting you were saying about the overnight moves, right? Cuz like the day-to-day action has been really muted, but we've seen some of these swings overnight. You know Yeah. Um Same with last week. Yeah, we saw that one I think it was the weekend when uh it looked like the war was over or something and and uh the president tweeted or said something um and we come in on that Monday and I believe the spoos were up 100 points, if I'm not mistaken, 100 105. Um I know because I I uh I didn't reset my hedges until the next morning. Yeah, right. So, we had the same opposite happen uh today. Well, looks like we opened down about 100 handles um and then rallied back to positive on the day, sold off a little bit more. Pretty pretty remarkable. That's a pretty good move uh being down 105-ish and rallying back to a positive number. So, that's that's pretty volatile, you know, whether you like it or not. It That's a big move. Um so the OCC numbers for today though, but like the last couple days it's been relatively muted, you know, 70 million contracts muted, which is way more than we ever saw in our day. But like, you know, 70 million contracts like is you know, not exactly panic territory for this market the way we're doing volume. Oh, I And and actually I That's a good point because I I do look at OCC volume system-wide every day. I get that report and you're right, we've been we've been anywhere from the high 50s, which is a kind of a low number this year, to to 70-ish on on the higher side, but really haven't broken through uh the upper level with these moves. Um Um, I would have thought we would be consistently in the 80 million range each day with these moves. Um, but I think what that tells me though a little bit is that retail is so involved, um, a lot more than it used to be and I find retail when we get into these very volatile markets, I think retail likes to sell premium a lot, at least that's what we see. So, I feel like they're saying, "Uh, I'm going to sit back on my hands for a little bit, let this settle out, let the big dogs kind of tug tug on the piece of meat and and I'll get back in when we settle down." Um, what do you think about that that sort of thesis? I think, you know, I generally you know, kind of bundle all buy-side volume together, right? Like, whether you're retail or an institutional desk, you're at the end of the day not particularly more sophisticated. Like, no offense to the institutional desk, but like like you're coming in like trading options for a different purpose and like the reason that a lot of those strategies are happening, now's not the right time for for any of them to be involved. And so, I think everyone's dialing back, you're not seeing that, you know, immediate panic risk transfer that everyone just moves positions. Once it's been sustained for two and three weeks, it's kind of, you know, there's a lot of hand sitting, reasonably so, going on. Yeah, I agree with that. Um, what what what happened Do you know what happened? Let's see, we have uh, geopolitics clearly the the big driver of of movement here, right? And how how, you know, every the world is responding to what we're doing over there in in our in Iran. Um, pretty much event driven, I think we can safely say, right? Um, you know, there's going to be great news, there's going to be bad news, we're going to swing based on that news for a while until this kind of subsides. Um, however, the new volatility index that we have at place, maybe not the VIX, but oil. So, oil seems to be in this inverse relationship with the with the marketplace here. Whenever I see here oil's up in the morning, guess what I know the market's doing. You know, it it it must be must must negative to the market. So, um, I not sure you follow oil. I actually don't, but I do I do, you know, broadly follow it, but not not not in depth. Do you have any thoughts on that one? The you know, we we were talking about it earlier. The term structure isn't as crazy as I thought. You know, we're definitely in some backwardation right now like the front but the ball is pretty steady very far out, right? Like oil's IV or I'm using USO as a proxy. I want to say even 6 months out is still on like the order of like 90. So, we're expecting oil to be four to five times more volatile than the S&P 500 at that same, you know, duration. I got you. Okay. That's wild. Yeah, that's wild. I agree. What else? it at the pump for sure. Oh, oh, no, wait, you don't see it at the pump. Wait, I don't see it at the pump cuz I haven't been to the pump in 7 years. Who's who's who's counting? My buddy though however said to me the other day actually we we're talking about the market and trading and options. He said, "I just filled my wife's SUV up. Guess how much it cost me to fill it up, right? I'm like I know what he had. 80 bucks probably. It was like $160 to fill up his her car. I'm like, "What?" He goes, "You think about it. I do that four times a week. I mean, I'm sorry, a month, right? That's $640, right? 320 640 640. Um he goes, "I could probably lease a Tesla for that a month and not pay any more gas on it as well." It's like I'm like, "Yeah, you probably could. That's unreal." I haven't I didn't know how much that gas was that high. I truly haven't been to the gas station that long. I just I kind of see it, but then in my head I'm like, "Ah, how many gallons would I put in my Tesla? Zero." So, I don't think about it so much. But that's insane, man. I want to say the country nationwide average it topped over four, which is like pretty high. Yeah. I want to say we were down to like 220 like, you know, in a year or two ago. You know they You know what they say, this too shall pass. Once we get this cleaned up, I'm waiting for the news the streets of Hormuz is perfectly clear oils of oils are moving, you know, then we then we have a pretty major rally I think in in the market and a sell up in oil. Uh the way it's been even just today I believe it was up 10 11% like, that's where that 84 vol comes from or 94 vol comes from. That's Yeah, it's it's it's up there for sure. What about VIX and SPX vol? I you know, I think we're we're at 25 clicks in in SPX near term, give or take. You know, that's not panic level but it's certainly not low. Definitely definitely juicier than not, right? Would you agree with that? It's crazy, you know, I'm starting to sound like an old man on on his porch yelling about how vol used to get high and back in my day but like, given what's going on, 22 25 like, really pretty reasonable. You know, we're seeing some of these overnight moves like you were talking about down 110 points but like, we close up, you know, marginally 11 points. Like, you know, historical close to close vol like if you measure it just like market open market close like, or sorry, close to close, the it's not realizing that much, 16 18% like, 1% a day feels like a lot more tension than that now. So, Yeah, I'm with you. as high as it used to. You know, we're not seeing 35 40 level in the VIX. I I mean, we need to see nukes to to get that to be We need to see nukes. But there are no more nukes. It's They're gone. He blew them up, man. All right, do we spend those too? No, it's Oh my god. All right. Trying to think of what else happened in the trading world this week. And and just so folks know, we you know, we will have specific option order flow analysis too on the on the regular live show. This one you're watching now has been taped and we are doing a trial run on it but it'll be similar in style but we'll have very much more specifics on individual stocks and the individual option flow. Some fun things on on you know maybe some dividends early exercise that can occur why they occur. I think a lot of retail folks always want to know about what causes a call to be exercised early you know what's going on. So we'll explain some of that stuff to you. We'll always get into um We can talk about theory a lot if you like that. We certainly can talk about you know kind of about some of the strategies we like to use as we as we typically will. Uh and some of them maybe they the piles of poop in the options playground that you want to avoid stepping in. Um so we're we you know we like to kind of guide you not guide you and sort of warn you of some of the landmines that exist out there in the options world and the trading world. What else Mark? Uh I was going to ask what you're drinking tonight. Oh so This afternoon I mean. Yeah tonight well it's in my room it's kind of tonight I'm in the dark cellar here. Yeah same here exactly I got the lights low I got a glass of wine what what you got? You're looking good man. I think you already have you already started the weekend because it's the synthetic Friday on Thursday. Synthetic Friday all day. And you have already had a margarita you're swirling a what is that a brown Contenac? How do I say that? You just speak such good French so you say it. Brown Contenac. Brown Contenac. The second growth Bordeaux. Yep. Uh in the from the 1855 classification. Uh left bank Margo though so we're not like in the heavy cabernets like of like the polyacs and whatnot. We got a we got a little bit more merlot in this guy. I think it's like 25% merlot and like some other various blenders but So like a little petite verdot is probably in there a little cabernet cabernet franc right? Cabernet franc petite verdot probably yep. Yep okay. Yeah it looks like it's about like you said, you know, 70% Cabernet, 25, 26 Merlot, and the the balance in that Petit Verdot and Cabernet Franc. Um, how would you describe, uh, you know, kind of its style? Is it Is it super aromatic? Is it Is it like, you know, more refined than aggressive? How would you How would you How would you call it? So, '16 was definitely a hot year. Like, so '16 produces like a pretty big Bordeaux. Um, and this is the first of these that I've had. Like, so coming in 10 years, like I feel like that's kind of the right time to start angling for it. Mhm. And as far as like the flavor profile, I think it's pretty rich. Like, it's definitely, you know, um, you know, but it's got that Cabernet, like, especially Left Bank Bordeaux Cabernet gives like a lot of structure. Like, I picture that as like a very classic, like, Greco-Roman palace of like tannins and just, you know, but the fact that they have 25, 26% Merlot gives like That's what I always love about a Margaux, right? It's got that little like lush edge to it, too, right? So, you have all the structure of Cabernet, but you have like the little just velvet touch of the of the Merlot. I like it. That's like a That's like a fine options, uh, strategy, I I I must say. So, um, Good structure with a little touch of art. Little touch of art, I love it. So, you're probably going to have that tonight with some big badass steak with some fat in it, like a ribeye, something like that. I I How did How did you know? Yep, I am I am planning on getting a ribeye tonight. Oh, no kidding. Okay. Um, probably good with lamb chops, a little duck maybe thrown in there somewhere if if you can handle it. Throw a little mushrooms on the side. All that stuff blends well with it with a wine like that, right? Yes, this is This is my my steak wine. I I love my Left Bank Bordeauxs for that. Okay. Yeah, you're going to So, just so you folks know, we're going to talk a lot about wine. We're also going to talk about dining cuz I'm a massive diner. I don't Marcus, too. Um, when I travel, I dine. And I drink well as well. Um I'm a little bit more of a Porto man, meaning when I go to the restaurant, my wine comes with me. And people are going to be like, "Really? You bring wine to the restaurant, you cheap bastard?" I'm like, "No, it's not really. They charge me to open it, so you know, I'm I'm paying twice sort of. Um I just like my cellar better than theirs. That's all there is to it. I'm a little snobby about that." Do you ever do that? I do that all the time. I actually bought myself a little present recently, a nice little little man purse to carry my wines to the restaurant, and How many does it hold at once? Is it two or three? Uh so that's I've got my two-pack that's a little more elegant bag, but then we've got our picnic one that's like a six-pack. Oh, lovely. I love it. I got a buddy Yeah, one of my good buddies is really big into wine. We have a a good group of of friends in in my neighborhood. Um everyone's into wine. Everyone has cellars, and we bring varying degrees of capacity to the restaurant. He'll bring the six-pack like regularly to a res- to a to a dinner. I'm like, "Dude, there's eight of us here. We're not drinking this much wine. I I'm telling you." And he's like, "Well, you never know what I want to save. So I'll just take it home if I don't drink it all." He's hilarious, but I mean, he's he's got some crazy wines. We'll talk a little bit Yeah, we'll talk a lot about French wines. We'll talk a lot about California wines, which is more, you know, my angle. Uh Mark's very much more in the French. We both know a lot about about each. Um I'm very weak on Australia, um and and mediocre in in Italy. So we're going to, you know, we'll we'll still going to do it. We're going to burn it down. We'll stumble around. I have some good Italian bottles I'll pull for this. Yeah. Yeah, for sure. Uh what are you drinking though tonight? Um you know what? I am having leftovers from last night, okay? And it's a wine It's a new It's a new uh How do I say this? It's a new um bargain not bargain. What am I trying to say? It's not I don't want to say cheap. It's It's not inexpensive, but it's a bargain uh wine from Douro, DAO. Oh, you. good Portuguese style. Yeah, so Douro is Douro has a really high-end Cabernet and they have everything in between. And this is a new version that I tried randomly last night. Um and it's called uh I want to say it's called Blackstone. I don't have the bottle, unfortunately. I left it downstairs. But the first time I've ever had it and the key to my wine drinking is my wife. Because she likes uh younger, very full-bodied California kind of Cabernets. And I know that I'm going to put in front of her. I'm not going to tell her what it is and she's going to do one of these. Like that. And that means no I go I I failed on this one. And then last night I threw her this and I said I'm looking for the face and she goes, "This is really pretty good." Pretty good. So I'm like, "Okay. Okay, I got a winner here." So I'm always trying to trick her. You know, and that's the fun thing about wine is uh we all have our prejudices, but I guarantee you I won't be the one to serve it to you. But I guarantee someone could find an Australian wine that both of us would just go, "Wow, that's incredible. That is exactly what I like." Without a doubt. I had one, by the way, in in Miami. I was in I was in Coconut Grove just recently. My buddy opened up a Uh it's probably a 15-year-old Shiraz, right? And it's from Velvet Glove, which is made by Molly Dooker in Australia. Just a great, great Shiraz from them. Um and I don't think they make it anymore. I think it's been long gone. The vineyard's gone or the the winery's gone. Um but it was fantastic. I still have a few bottles of that in my cellar. He said that was his last bottle and we drank it. It was really delicious. Oh, there's nothing like that last bottle. There's something that's like both sad and liberating about it, right? You pop that cork and it's done and here you had it. Here you had it. I love that. Yep. All right, well, guess what? We're at the green apple, green light, red light move. Um time for us to mosey on. Uh this is a test run, just so everyone knows. We will be very more specific with things. Uh we just wanted to get a little flavor and get our our our wings beneath us as it were. So, uh it's going to be a lot of fun. We're going to do all kinds of fun things. And we're always going to have a little theme of of the markets behind it or in inside of it. Um and we know, we obviously want you to subscribe. We want you to like this stuff and we want you to send us your um you know, your comments and give us some feedback as to what you want to hear on the show. We're happy to kind of accommodate as we can. Right? And we're going to have a good time. We're going to talk about markets. We're going to talk about wine. We're going to talk about the reason we trade, which is to enjoy the good life. That's right. That's it. It's it's a great enhancement to the to the the money the money tree, right? Just keep shaking the money tree. Perfect to that. All right. Mark, good to see you, buddy. Have a great weekend. Drink that wine, man. I I know it's going to be a good one. I'm trying to cut back a little bit. So, I'm going out with some buddies tonight. The girls are doing something. The guys are doing something. We're going to a more of a grill tonight. So, it's not exactly a wine place, but I may bring something along anyway. I'm not sure yet. Well, I told you I changed my mind about 90 minutes ago about bringing wine tonight. You can always You can always make a last minute audible. Can you see my glass? I can. So, it's nice looking glass. Yeah, it's so it's You can't really see it. It's pretty small. See my hands. It's It's not a big glass. It's kind of I want to say it's more of a a chardonnay white wine glass. Um but smaller than you'd think in real life. It's but it's really cool. I like it. Um and I just threw some red wine in it because I just like the way it looks. So, it's really nimble and light. And I've already broken one. So, have at it. The wine glasses are made for breaking. Why don't get I know. too worried about that. I know. I think we can always get more. All right, buddy. Have a good weekend. You have to say happy trading, I think. Happy synthetic Friday. Happy synthetic Friday. And happy trading. And I always have to say, trade smarter, not harder. It's a wrap. See you, buddy. Cheers. You know how the financial world goes. Here comes the buzzkill. Please make sure to take some time to read this boring disclaimer. We will owe you one.