In the first episode of our new podcast interview series, Off the Charts, my co-host Steve Strazza and I interviewed one of our favorite people on Wall Street, Jay Woods.

But he’s not just our favorites, he is a favorite of many. I would argue he’s the most popular man on Wall Street!

One thing I’ve heard repeatedly over the years is some version of: “Have you gotten the Jay Woods tour of the New York Stock Exchange?” Gratefully, I can say I have. And the breadth and depth of Jay’s NYSE history is quite literally off the charts.

Steve and I are both incredibly grateful to call Jay a friend.

In this hour-long chat, Jay talks about the first chart he ever created (by hand). His uncle (famed market technician Ralph Acampora) purchased two shares of IBM for a young Jay as a gift and encouraged him to do so to track his first investment.

We then fast-forward to his days as a Wall Street intern where his job description might best have been: ‘Lunch ticket order taker.’ The unspoken silver lining of that experience was the skills he learned in this process that translated into the ability to multi-task and eventually thrive in a fast-paced role as a Specialist making markets in several stocks at once.

In his younger days, Jay considered himself to be a bit shy and reserved. But soon after becoming a full-fledged Specialist on the floor of the NYSE, Jay acquired a wonderful sense of humor and quick wit that has earned him the respect and admiration of nearly everyone he now meets.

But it was not just an affable personality that Jay won on the floor, he also learned the hard way that having a short memory helped him stay sane and move on from tough lessons metered out by an often unforgiving market, angry stakeholders, and plans gone awry.

And while Jay won’t admit to “seeing it all,” he’s seen a lot — from the dot-com bubble to literally being just 3 blocks from Ground Zero during 9/11, to the Great Financial Crisis, to navigating the ever-changing shifting corporate sands and trends that have completely changed the role Specialists now play on the Floor of the NYSE.

Grab a snack, settle in, and enjoy this delightful conversation with the amazing Jay Woods!

The audio version of this podcast can also be found on Apple Podcasts, or wherever else you stream your favorite podcasts!

Sean McLaughlin
Chief Options Strategist
All Star Charts, Technical Analysis Research

All Star Charts chief options strategist @OptionsSean joins Yahoo Finance to discuss the meme stock craze: pic.twitter.com/OXp18lXl1I

— Yahoo Finance (@YahooFinance) May 14, 2024

It appears that “Meme Stock Mania” is back. Or we’re at least having an echo moment.

Cool. I’m all for it!

Whatever leads more sheep to slaughter, the better for those people who trade with plans and logic. People like you and me.

If we learned anything from the last go-’round, remember that it’s very hard to control our risks in these mania stocks – especially when we have to deal with trading halts that may or may not resolve in the direction we desire.

Fortunately, options traders have a unique and specific advantage over common stock traders – we can PRECISELY define our risks. Of course, this privilege comes with a cost: high options premiums.

Yes, we can express our bullish devotion to @TheRoaringKitty by purchasing call options in his favorite meme stock, which comes with the very important feature of limiting our risk to the premium we pay for those calls. But we’re going to pay through the nose to buy them.

Market makers aren’t stupid. Especially after what happened to them last time.

Might I suggest…

If you’re dead set on trading these crazy meme stocks, it might be more prudent to put the market maker’s risk aversion to your benefit by utilizing simple vertical options debit spreads. If I’m bullish, I’d use a bull call spread that involves purchasing a slightly out-of-the-money call and reducing my cost of participation by selling a richly priced, further out-of-the-money (OTM) call against it.

Here’s what a typical PnL graph looks like for a call vertical spread (aka: “bull call spread”):

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