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Market Anomalies: Why 'Cheap' Options Are a Trap
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ticker lesson
Breakdown
0:002Y/10Y· ticker
Yield curve flattening signals aggressive Fed
- Two-year yield jumps > 10-year
- Curve flattening = Fed rate hike expectations
- Jobs report beats estimates by 4σ
- Labor market narrative shifts to stronger growth
1:53ZB/ZN· ticker
Short bond positions after strong jobs report
- Exit ZB/ZN long call spreads
- Short delta exposure in bonds
- Put verticals in 108-109 range
- Bearish on 30-year treasuries
3:43lesson
CFTC report limitations for timing
- COT report delayed by 5 days
- Data window closes Tuesdays
- Use for long-term positioning
- Avoid overreacting to outdated data
5:30LULU· ticker
Volatility skew analysis in LULU
- Compare OTM puts/calls at 99.48
- Skew points to upside risk
- Sell 97 puts, buy 95 puts
- Base trades on skew shape
7:32SPX· ticker
Box spread financing cost analysis
- Box spreads finance cheaper than margin
- P&L treated as interest expense
- SPX European-style options
- Avoid single-stock box spreads
9:35lesson
Hard-to-borrow stock mechanics
- Shorting hard-to-borrow stocks = higher costs
- Synthetic shorts via put/call combos
- Put-call parity reflects market pricing
- Avoid cheap-looking synthetic positions
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