In this episode, Alf and Brent talk about the Fed&#x27;s likely reaction function to incoming data and the Bessent/Japan accord on the JPY. The duo then discusses one of the trickiest questions for macro PMs: when to use options, and how to size them?

On Sizing Options, The Fed and The JPY

The Macro Trading Floor

The Macro Trading Floor. With me, Alfonso Peccatiello, founder of the Macro Compass and former head of investments at a large European bank. And I am Brent Donnelly, president of Spectra Markets. I've been a portfolio manager, day trader and market maker at the biggest commercial and investment banks in the United States. I'm also the author of Alpha Trader and the Art of Currency Trading. If you want to know what's going on in markets and where they're going, you found the right podcast. Hi everyone, welcome back to The Macro Trading Floor.

Alf and Brent with you, us every week. Now, Brent was telling me before going live that last week looked like 2008, situational awareness blowing up, dollar-yen going ballistic. And this week is like 2019 or something, we're basically going back to sleep. But, you know, maybe it's Ken Griffin we have to say thanks to. He bailed out the leverage seller and the party is over, at least vol-wise, Brent. And what do you think? What happened? What like, what do you make of all that saga?

It is amazing. The vol of vol that we've experienced is kind of mind-numbing. I mean, I know that the situational awareness thing has been covered a lot, so I don't want to go too long on it. But, I mean, concentration and leverage and leverage beta, you know, we've seen it many times before. We saw it with ARK, we saw it with Bill Wong, and we've seen it many other times in the 90s as well.

You pick a theme, you go massively levered on that theme, you make a lot of money, and then you give it all back. And, I mean, of course, he's still up on the year. But I don't know.

On Sizing Options, The Fed and The JPY

Read the full transcript

The candid version is on a podcast,
not the earnings call.

On Sizing Options, The Fed and The JPY

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.