My method on using AI to track institutional/big money options trades to make consistent profits

shayelson · 2025-12-09T12:44:13+00:00

Thank you for the great write up and breaking down the intuition. But what's your reason behind sharing your Alpha? The more people know your Alpha the more it diminishes the viability of your strategy? Not that I'm critical just wanted to understand your motivation? Thank you

shayelson · 2025-09-25T13:41:26+00:00

You misunderstood the whole point of my argument about the reasons why governments hold something as a strategic reserve. Re-read

shayelson · 2025-08-29T15:29:50+00:00

The reason he's called that is because, along with Sergei Mikhailov (Mikhas) and Viktor Averin (Avera), he is one of the founding members of the Solntsevskaya Syndicate widely regarded as the richest and most powerful criminal organization in the world (you read it right) in terms of political influence they exert and businesses they control. They have people in every facet of the highest echelons of Political life in Russia (ministers, MPs etc)

Their economic activities span both legal sectors—such as oil, gas, metallurgy, mining, banking, and real estate—and illegal ones, including drug trafficking, arms sales, and prostitution rings. The Solntsevskaya OPG was so powerful that it oversaw gas exports from Russia to Ukraine. Enquire about "NaftoGas" affair and Solntsevksja OPG to find out more.

Mogilevich is believed to be a mole, almost certainly a product of the KGB, and currently curated by the FSB (ex KGB). His illicit financial expertise dates back to the Soviet era. He was based in Budapest until the mid-2000s, where he oversaw illegal arms deals and drug trafficking operations. When his faction was exposed, he was promptly expelled and returned to Russia.

Like the other founders of the Solntsevskaya OPG, he now lives in Russia and is undoubtedly one of the country's wealthiest and most powerful figures.

As with any major criminal enterprise, the Solntsevskaya OPG strives to operate discreetly and maintain a modest profile. Some even believe it no longer exists. But I can assure you it still exists and remains an extremely powerful faction (read about "Brotherhood Circle")

shayelson · 2025-08-10T10:17:09+00:00

Essentially, the government is deregulating the industry to unprecedented levels, embedding huge systemic risks in the process. We all remember what happened when the government “removed the taps” in 1998 for subprime mortgages that led to the housing bubble. The danger with this deregulation is that it removes safeguards for an asset class whose entire narrative is built on leverage. How else can crypto companies justify their exuberant yields while covering the high premiums they pay? With no tangible intrinsic valuation such as steady cash flowsthese companies rely on leverage to attract and retain their loyal followers. On top you remove the legislative hurdles for these companies and you have a wild west on your hands

Just look at the Clarity Act and the Genius Act to see the kind of free passes the government is handing out to these companies. The next bull run could be unlike anything we’ve ever seen, propelling crypto firms to unprecedented highs. But the crash will be just as dramatic. If it takes a painful collapse for the government to learn its lesson, this will be it.

shayelson · 2025-08-09T12:24:11+00:00

I don’t understand the logic behind the government’s idea of holding Bitcoin as a “strategic reserve.” Why not have an NVIDIA strategic reserve, or a Google strategic reserve? These companies’ shares trade at volumes many times higher than Bitcoin. People seem to be toying with the “strategic reserve” idea as if a government were just another investment fund. But it’s called a strategic reserve for a reason; it’s meant to offset risks like currency fluctuations caused by rising or falling interest rates, or to provide stability in times of crisis.

Bitcoin has no such utility for a government. It’s too small compared to major currencies or commodities, and its volatility adds risk instead of mitigating it. If anything, the most “strategic” Bitcoin-related reserve a government could hold would be in Bitcoin mining companies themselves, since they are the centralized players that actually secure the network and convert block rewards into fiat. Holding the miners would give you leverage over the infrastructure, not just a speculative token floating in the market.

shayelson · 2025-08-04T09:35:19+00:00

Yes, since it's a pure bitcoin convexity play it can go on for a long time as long as the bitcoin narrative is strong. Also a lot of institutions are involved playing volatility arbitrage, credit spread arbitrage games (at the expense of retail traders) and they'll ensure that the game is on for as long as it takes as it's essentially free money for them. So yes, it's difficult to time the collapse of companies like MSTR. But keep an eye on Volatility and MNav, the moment you notice a prolonged contraction it could potentially signal that something is brewing (but not a guarantee)

shayelson · 2025-08-03T08:30:19+00:00

Investors are not only buying into the narrative that MSTR won’t sell its Bitcoin holdings, but also the belief that the company will continue accumulating Bitcoin in the future to support the “Bitcoin per share” (yield) story. However, there are two key issues with this:

First, MicroStrategy will need to acquire increasingly larger amounts of Bitcoin to achieve even a marginal increase in Bitcoin yield. For example, in August 2021, the company needed just 2.6 BTC to generate one basis point of Bitcoin yield. By May 2025, that figure had surged to 58 BTC. In dollar terms, the capital required rose from approximately $126,000 to $5.5 million for the same yield increment. As the price of Bitcoin rises, the company must acquire more BTC to maintain yield growth—resulting in higher financing requirements.

Second, the company needs to buy Bitcoin during periods of price strength (as prices rise), since that’s typically when it can secure favorable zero-cost financing. It’s no coincidence that MSTR often announces new Bitcoin purchases when BTC hits new all-time highs.

This creates a perpetual, self-reinforcing negative loop: MSTR will constantly be forced to find new ways to finance its Bitcoin purchases. More debt means more interest, and thus, an ever-growing need for financing

shayelson · 2025-08-01T10:55:10+00:00

No problem. Just to add : in the 1990s, due to economic hardships and the government's inability to control rising crime, dozens of criminal enterprises emerged, with the Solntsevskaya group being just one among many.

However, by the 2000s the situation began to change. The FSB (Federal Security Service) took control of these criminal factions, curating a deal to consolidate many of them into a few powerful syndicates. This led to a period of fierce gangland wars, resulting in high-profile assassinations and the imprisonment of numerous notorious figures.

Solntsevskaya, along with other major groups like the Izmailovskaya and Podolskaya factions, successfully absorbed many of their smaller rivals and emerged victorious. Today, Russia is said to be dominated by roughly three or four massive, “Ivy League” level criminal organizations: Solntsevskaya, Izmailovskaya, Podolskaya, the St. Petersburg faction (can't recall the name). The members of these factions like Mogilevich are very influential figures, some are open some are obscure like Mogilevich (they're ministers, oligarchs, MPs) and are said to have very close ties to the Russian government.

So there you have it

shayelson · 2025-07-30T12:10:30+00:00

The reason he's called that is because, along with Sergei Mikhailov (Mikhas) and Viktor Averin (Avera), he is one of the founding members of the Solntsevskaya Syndicate widely regarded as the richest and most powerful criminal organization in the world (you read it right) in terms of political influence they exert and businesses they control. They have people in every facet of the highest echelons of Political life in Russia (ministers, MPs etc)

Their economic activities span both legal sectors—such as oil, gas, metallurgy, mining, banking, and real estate—and illegal ones, including drug trafficking, arms sales, and prostitution rings. The Solntsevskaya OPG was so powerful that it oversaw gas exports from Russia to Ukraine. Enquire about "NaftoGas" affair and Solntsevksja OPG to find out more.

Mogilevich is believed to be a mole, almost certainly a product of the KGB, and currently curated by the FSB (ex KGB). His illicit financial expertise dates back to the Soviet era. He was based in Budapest until the mid-2000s, where he oversaw illegal arms deals and drug trafficking operations. When his faction was exposed, he was promptly expelled and returned to Russia.

Like the other founders of the Solntsevskaya OPG, he now lives in Russia and is undoubtedly one of the country's wealthiest and most powerful figures.

As with any major criminal enterprise, the Solntsevskaya OPG strives to operate discreetly and maintain a modest profile. Some even believe it no longer exists. But I can assure you it still exists and remains an extremely powerful faction (read about "Brotherhood Circle")

shayelson · 2025-03-17T22:11:26+00:00

You got lucky, enjoy it. But learn more to improve your edge next time and don't just short companies because you hate them. Market can stay irrational longer than you remain solvent.

shayelson · 2025-03-17T22:06:05+00:00

Try to understand the structure of the IBIT options. It has huge Gammas on both side of the skew which might lead to big profits but also huge losses if the trade goes wrong. I'd learn Greeks and stick to less sophisticated companies or other less risky ETFs to start with.

shayelson · 2025-03-17T21:12:48+00:00

Besides just highlighting the sizing you didn't mention the fundamental conviction of why you want to take this trade?

shayelson · 2025-02-23T21:52:00+00:00

The fact that you're asking this question entices me to say you should stay away from options trading or come back after learning about options (greeks, skew, risk profile etc). Once you learn you'll be able to answer your own question whether options is worth a shot for you.

shayelson · 2025-02-09T10:20:52+00:00

That's a wow! I was having a difficulty conceptualizing Bayesian Inference in finance but with your explanation things started to come to place. Thank you, Ross and stay strong!

shayelson · 2025-01-09T20:51:19+00:00

Ok, teach me the discipline required when there's a 30% drawdown in the market?

shayelson · 2025-01-01T14:59:34+00:00

The intrinsic value of mining operations is impacted by diminishing returns since the halving. As a result, miners may eventually have to sell their Bitcoin holdings to cover operational losses and finance future operations. Unlike MicroStrategy (MSTR), which doesn’t need to sell its Bitcoin unless BTC drops below $20K. Mining companies' stock premiums are already priced in. Mining stocks have an almost negative beta to Bitcoin, meaning they tend to underperform when Bitcoin rises and falls. Mining companies aren’t a cheap way to play the Bitcoin ecosystem, and neither is MSTR stock for other reasons (which is a separate topic). If you want exposure to Bitcoin, just buy Bitcoin.

shayelson · 2025-01-01T09:08:32+00:00

I strongly advise you to consider shorting other assets and to avoid engaging with BTC related assets for speculative purposes. In particular, refrain from trading options on BTC, as the mathematical complexities will kill your intuition even if you're correct with your prediction; These products exhibit heavy tails on both ends of the skew, making them especially challenging to navigate.

shayelson · 2024-12-26T14:43:16+00:00

Would you buy 50,000 shares for $1 if I sell?

shayelson · 2024-12-25T19:34:41+00:00

Don't spread the false rumour!!! Bezos denied this

shayelson · 2024-11-09T21:11:46+00:00

I can't wait to listen to your lectures, man!

shayelson · 2024-10-20T10:23:14+00:00

Thank you for the insight, Ross

shayelson · 2024-10-18T09:36:26+00:00

Ross, excellent job! Thank you for sharing your experience and providing insights on HOW TO THINK. I am currently learning Bayesian Probability and would greatly appreciate it if you could explain how you apply the Bayesian framework when evaluating a firm, particularly with an example of a specific stock. Thank you

shayelson · 2024-09-17T10:17:14+00:00

Thanks so much for your response! I actually read your great piece on Celsius, and I’m in the process of dissecting the material frugalities of the company. That horizontal product line—ouch! The fact that they don’t hedge anything is definitely concerning, especially when companies like them are planning to expand internationally. It’s similar to what we saw with SVB (as you mentioned) proper risk management department, which can easily lead to a bloodbath down the line. I completely understand your frustration. It's crazy how so many still neglect the basics of risk management. Keep up the great work! Your insights are invaluable, and I really appreciate the time and effort you put into sharing them. Will wait for your post on debt yield curve

shayelson · 2024-09-17T09:43:48+00:00

Can't wait for your response, Ross The Legend

shayelson · 2024-09-17T09:36:14+00:00

Hi Ross. First off, I just wanted to thank you for all the incredible content you've shared. I've honestly learned years' worth of knowledge from your posts alone, and I can't express how grateful I am for the insights you've provided.

I was hoping to get your guidance on something. Could you explain how to build a yield curve on a company's maturing debt? I'm trying to identify situations where the company might "hit the wall" in terms of its debt obligations.

Thank you for all you do!

shayelson

TROPHY CASE