Get an Edge in Options Trading: SpotGamma’s Brent Kochuba Unlocks The Secret – Ep #147

Summary – How To Get an Edge in Options Trading

Brent Kochuba is the Founder of SpotGamma, a financial insights company, which applies its proprietary methodology toward modeling index and equity options and then provides unique content to its subscribers. 

The platform has thousands of members and has been featured in publications such as The Wall Street Journal and Bloomberg Markets. Brent oversees all of the product development and creative content.

Previously, Brent was a portfolio manager with Seven North Capital Management where he focused on creating options-based investment strategies. Prior to that, he spent time as a derivatives broker at Wolverine Execution, Credit Suisse, and Bank of America. 

Brent lives with his wife and children in Easton, Connecticut.  He holds a B.S. in Emerging Technologies from the University of Connecticut.

In this episode of How To Trade It, Brent unpacks how to get an edge in options trading. You don’t want to miss it!

If the volume of buying & selling stocks & futures is big enough, it could really have an impact on moving the market, says @spotgamma founder, Brent Kochuba. Join us on this episode of How To Trade It to find out more! #Options #Stocks… Share on X

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Disclaimer: Trading carries a high level of risk, and may not be suitable for all investors. Before deciding to invest you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment. Therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. 

You’ll want to listen to this episode, if you are interested in hearing Casey and Brent discuss…

• [01:18] Analyzing the S&P500 and NASDAQ
• [03:04] Market Makers
• [06:47] Options expiration
• [10:17] Meme mania
• [14:45] Applying the data
• [20:23] Categories to watch
• [22:02] Daily Note
• [25:57] Summary of key points
• [28:48] Skew
• [31:07] A hidden danger for investors

What are Market Makers?

A Market Maker’s whole job is to post bids and offers on the exchanges for both stocks and options. They are not a bank, nor a hedge fund.  Market Makers electronically send out and have orders resting on all of the exchanges, at all times.  Odds are, when you place an order in your eTrade or Robinhood account, you are actually buying or selling from one of the Market Makers. They are the primary liquidity providers in our market.  Citadel claims to have about 40-45% of the total option volume out there.  

What are Options Expirations?

An Option expiration is the date on which an options contract becomes invalid and the right to exercise it no longer exists. Options contracts are typically written for a period of several weeks, months, or years. The expiration dates usually happen on the third Friday of the expiration month. When an option expires, the holder of the option can no longer exercise it to buy or sell the underlying asset. Instead, the option is worthless and the holder loses the premium paid for the option. Options can also expire worthless if the strike price is not reached before the expiration date. It is important that traders monitor expiration dates of their options contracts.

What is Meme-mania?

Meme mania refers to the recent trend of individual investors, often influenced by social media, buying shares of certain companies, specifically meme stocks, with the goal of driving up their prices. Meme stocks are often those that have been the subject of internet memes or have a significant online following. A few recent examples of meme-stocks include GameStop, AMC, and BlackBerry.

The surge in buying of these stocks led to a significant increase in their prices, and in some cases, a short squeeze occurred where short sellers were forced to buy shares to cover their positions, further driving up the price. This caused significant losses for hedge funds that had shorted the stocks and led to a debate about the role of social media in stock market trading.

However, it’s important to note that meme mania is a highly speculative and risky form of investing, and can lead to significant losses for those who invest without proper research or understanding of the underlying fundamentals of the companies. It’s recommended to conduct a thorough research before investing in any stock, especially those that are driven by hype or meme.

Resources & People Mentioned

• Citadel
• Robinhood
• www.SpotGamma.com/subscribe How to Trade It listeners can get TWO FREE WEEKS of any level of SpotGamma Subscription by using coupon code HTTI50

Connect with Brent Kochuba

• Website:    http://www.spotgamma.com
• YouTube:   https://www.youtube.com/c/spotgamma
• Twitter:      https://x.com/spotgamma

Connect With Casey Stubbs

• Website:      https://caseystubbs.com
• Website:      https://tradingstrategyguides.com/
• YouTube:     https://www.youtube.com/TradingStrategyGuides
• YouTube:     https://www.youtube.com/caseystubbs
• Twitter:         https://www.twitter.com/caseystubbs
• Facebook:    https://www.facebook.com/TradingStrategyGuides
• LinkedIn:      https://www.linkedin.com/in/caseystubbs/   

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What is SpotGamma?

SpotGamma is a company that specializes in providing real-time options data and analytics for traders and investors. They offer a variety of tools and services to help users make more informed decisions about their options trades, including implied volatility and skew data, historical options data, and options order flow data.

The platform provides users with a detailed view of the options market. Some of the data includes bid-ask prices, open interest, and volume data for various options contracts. This information can be used to identify trends, patterns, and opportunities in the market, as well as to help users make more informed decisions about when to enter or exit trades.

It also provides users with educational resources, such as webinars, tutorials, and guides on options trading strategies. The resources are designed to help users gain a deeper understanding of the options market . Traders will develop coveted skills and knowledge necessary to trade successfully.

Overall, SpotGamma is a valuable resource for options traders and investors, as it provides them with the data and tools they need to make more informed decisions and to achieve better results in the options market. The tools are widely used by both professional and retail traders. The goal is to help traders make more informed decisions in a crowded and complex options market.