To The Moon

Dispersion Trading Profitability and Just a Reminder. I will show you how to do it 3 years ago. Attached is the winning strategy for options traders ;) - If you're not following you should be ;)  $Cboe Volatility Index(VIX)$  $Invesco QQQ Trust(QQQ)$  $S&P 500(.SPX)$  $TANDY LEATHER FACTORY INC(TLF)$  $SPDR DJIA ETF(DIA)$

Trading Long or Short Dispersion via Dow Components (l am bias to Short Dispersion given my overallmarket outlook & belief realized volatility will rise this year)

lf we are all assuming

(1.) Decelerating Global & Domestic Economy

(2.)A relatively slight increase in Global and Domestic Realized Volatility -

Then I would recommend looking into two options on Dispersion Trading. If volatility is expected tosend correlations to 1 then you should be short dispersion trade, but if you think Central Bank Stimulus & Balance Sheet expansion will continue to dampen realized volatility you may want to go Long Dispersion Trading equity correlations may continue to be slightly less correlated in a low vol environment versus the heavy correlation typically exhibited during large increases in realized volatility

I am a big fan of Dispersion on the Dow & Components 30 large well-known stocks easy to follow and create your own basket of individual components to trade against the Index. I am long dispersion, short volga, (ie vol of vol) )Correlation Trading involves movement of Vol of vol (voLGA) they need tomove together for the trade to work depending on how you put the trade on 1 like to use a Vega-Weighted - This means the index vega is equal to the sum of the single stock vega. If both the indexand single stock vega rise the legs of the trade offset each other - no loss - no gain - Why the Vega weighting of the Index & Single Stock equals or has zero vega.

lf you decide to go long dispersion you are short gamma(index)& short theta (long basket) f youdecide to go short dispersion you are long gamma (index)& long theta (long basket)

Step 1 - Figure out if you want to be long or short dispersion

Step 2 - Pick the Components (IndividualEquities you want to either write calls (short) or buy calls (long)

Step 3 - Sum the Vega Exposure Step 4 -l picked expiration dates on the components of 9/18/2020 Step 5 - I picked expiration dates on theindex of 01/15/2021

Follow me to learn more about analysis!!