TGIT: When the VIX Hits the Fan (and Other Stories)

Tariff tremors, dead cat bounces, 0DTE options, crypto reserves, the Coinbase paradox, Applovin, Arm Holdings, Coreweave's IPO, Cboe records, sport's futures, a new Rising Star and more. First time reading? Join other risk-takers, entrepreneurs, traders, investors, data geeks and alpha types. Sign up for free here.

TGI Thursday! (3/6) This morning, the Commerce Department's Bureau of Economic Analysis reported that America's trade deficit ballooned to an eye-watering $131.4 billion in January, as businesses frantically stockpiled imports ahead of Trump's latest tariff tantrum. The 34% surge—the steepest since 2015—occurred as America's appetite for foreign goods reached gluttonous proportions. Imports gorged themselves enough to reach $401.2 billion—a 10% binge not seen since the pandemic panic-buying of 2020. Physical goods led the consumption orgy, swelling by 12.3% to a record-breaking $329.5 billion and proving nothing cures economic anxiety quite like a shopping spree.

So, it should come as little surprise that Wall Street's favorite fear gauge is having a moment of existential panic. The VIX futures curve has flipped into an inversion not seen since the COVID chaos of 2020. It's the financial equivalent of kamikaze canaries in coal mines. And those seemingly paranoid traders who loaded up on protection last month are looking suspiciously prescient now. Some, displaying almost supernatural foresight, loaded their portfolios with protective options in February. Now they're counting their winnings while others nurse their wounds. The raw numbers tell the tale: 260,000 contracts of high-strike calls traded last week alone, a staggering bet on market chaos that's paying off handsomely.

But the market decline that's dominating today’s headlines tells only half the story. While the S&P 500 appears to have merely stumbled—as of this morning, down a bit more than 1% year-to-date—the real carnage is playing out at both ends of the spectrum. The index's top 10 stocks, representing a staggering 34% of its weight, are leading the plunge with only Meta and Berkshire staying afloat in this bloodbath. Meanwhile, small caps have taken a brutal 15% hit from post-election highs and 8% since election day, as investors flee to the perceived safety of mega-caps.

With the VIX fear gauge now approaching 24, this week’s Cherry Picks reveals that history offers an intriguing counterpoint to the panic: When fear spikes this high, markets typically deliver positive returns 60% of the time over the following month. The question isn't whether to run—it's where to position yourself.

In the meantime, stay lucky!

Editorial Director

As Trump's tariff tsunami hits Mexico, Canada and China, Wall Street is suffering its worst panic attack of 2025. The Nasdaq has plunged through three-month lows in a brutal nine-day losing streak, while the S&P 500 has surrendered all its post-election gains. With the VIX fear gauge exploding above 25 for the first time this year, smart money is fleeing to safe havens. Yet despite the bloodbath, volume profile analysis suggests the oversold Nasdaq might be primed for a short-term bounce. Trader Errol Coleman shares his strategy for exploiting this counter-trend opportunity. Read Full Story

In a move that would have been unthinkable not so long ago, President Trump has become crypto's unlikely champion. His audacious plan to establish a federal cryptocurrency reserve—stocked with Bitcoin, Ethereum and a grab bag of lesser tokens—has sent ripples through the crypto complex. While supporters herald it as American financial innovation, critics see it as a $20 billion boondoggle fueled by $130 million in campaign contributions. With 253 pro-crypto representatives now in Congress and a new "crypto czar" in place, the digital gold rush is on—whether taxpayers like it or not. Read Full Story

Premium Price, Populist Promise:
The Coinbase Paradox

As Coinbase rides the wave of Trump's crypto revolution, our analyst-at-large ponders a paradox: How can a stock be simultaneously overvalued and underappreciated? With shares trading at a nosebleed 23x earnings while analysts whisper $335 price targets, the cryptocurrency exchange finds itself caught between its premium valuation and the unstoppable momentum of digital assets. Read Full Story

Tomorrow’s White House crypto summit may be a revelation. It could tell us whether the market’s reaction to Trump’s plan for a crypto reserve was merely the opening gambit or the shape of what’s to come. Meanwhile, traders seeking more crypto options will appreciate the latest news from tastycrypto.

The trading platform provides traders and investors with new ways to diversify their portfolios and take advantage of market moves with Layer-1 contenders, like Cardano (ADA) and Avalanche (AVAX), and DeFi heavyweights, such as Aave (AAVE) and Chainlink (LINK) and the ever-entertaining Shiba Inu (SHIB).

There’s also a free weekly newsletter that’s a must-read. The latest issue reveals the critical price support level that Bitcoin needs to stay above, along with expected trading ranges for the most widely traded coins.

After surging 30% on blockbuster earnings, Unity Software (U) still trades at half the price AppLovin (APP) tried to pay for it in 2022. Unity has progressed from powering gaming platforms like Fortnite to creating Hollywood movie sets, and now it’s co-developing the Android XR platform with Google. With $1.5 billion in cash reserves and a market cap of just $10.5 billion, Unity presents an intriguing paradox: It’s a tech stock that might be rationally priced despite its impressive growth trajectory. The question isn't whether it’s overvalued—but whether it's still dramatically undervalued. Read Full Story

Nvidia Dumps Arm Holdings:
What Does the AI King Know?

When the world's AI kingpin slashes its stake in a company by 44%, investors should take notice. Despite powering virtually every smartphone on the planet, Arm Holdings (ARM) finds itself abandoned by Nvidia (NVDA)—the same company that once tried to buy it for $40 billion. With a stratospheric P/E ratio of 172 (nearly six times the sector median) and growth that's plateauing instead of accelerating, Arm's $130 billion valuation seems increasingly detached from reality. While Arm remains embedded in tomorrow's technology, Nvidia's calculated retreat suggests the smart money is looking elsewhere—and perhaps you should, too. Read Full Story

Nick Battista has dropped his latest installment of the Life Cycle of a Trade series. Watch him use disciplined adjustment to transform a $1,300 Shopify (SHOP) strangle position loss to breakeven. This real-time demonstration shows the practical application of delta management and strategic rolling techniques and illustrates that successful options trading depends less on perfect prediction and more on masterful adaptation when the market moves against your thesis. Watch the video here.

The Prediction Trade

Vegas Takes Aim at Kalshi—Will the House Win Again? 🎲

Nevada has declared war on the new kids on the gambling block—the entrepreneurs who run "event-based futures trading." More specifically, the state's Gaming Control Board has aimed its regulatory artillery at Kalshi, a fintech darling with Trump family connections, demanding it cease operations by March 14 or face the consequences.

The battle exposes America's tortured relationship with gambling: acceptable when it fills state coffers, suspicious when Silicon Valley uses it to disrupt the established order. Kalshi, fresh from easing the Biden-era CFTC concerns over betting on elections, now faces guerrilla warfare against its sports future’s ambitions. That’s because Nevada's gambit could set off a domino effect of state challenges. Read Full Story

Cboe Smashes Records Amid Volatility Tsunami 💵

As tariff wars and economic uncertainty plunged Wall Street into panic mode, Cboe exchanges became the go-to hedging platform for financial anxiety, processing an unprecedented 18 million options contracts daily throughout February.

On Feb. 21, traders executed 25.7 million options contracts, including a record 2.6 million bets on SPX (0DTE) options expiring that same day. Feb. 21 also saw SPX options volume of 4.7 million contracts, eclipsing the previous single-day record from December 2023. Meanwhile, as equity markets convulsed, a whale decided corporate bonds looked appealing and executed a $309 million IBIG futures block trade ($309 million notional)—the largest ever. It helped open interest exceed $479 million notional for the first time.

AI's First IPO Comes with Fine Print 🤖

CoreWeave, the "AI Hyperscaler" backed by Nvidia (NVDA), has filed for its Nasdaq IPO at a reported $35 billion valuation with the ticker “CRWV.” It’s 2025's first major tech public offering and a critical test of the market's AI appetite. Behind the company’s dazzling 700% growth in revenue to $1.92 billion, lurks a minefield of worrisome potential problems. A single customer, Microsoft (MSFT), accounts for 62% of revenue, with another unnamed client providing 15%, and three former-commodity-trader founders control 83% of the votes despite each already cashing out $150 million pre-IPO. Read Full Story

More Cowbell

Retail traders are abandoning memes in favor of tech themes. 

Zero DTE options trading volume sees a big Trump bump. 

Politics aside, Washington does some foolish spending. 

Business is struggling to grasp Trump’s tariff policies. 

The polls show America’s reaction to Trump’s speech. 

Tom Sosnoff voices his thoughts on free markets. 

Institutional investors assess Trump’s speech. 

The Japanese yen is taking off. Here's why.

ICYMI: tastylive’s best videos of the week. 

ICYMI: Last week’s Luckbox TGIT. 

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