Jeff Kilburg of KKM Financial has cracked the code. Rotation out of tech. Second quarter ending. Markets doing what markets do. His solution? An options trade that creates income.
Breathtaking.
The man sells premium during volatility. He constructs spreads when correlations break down. He generates yield when directional conviction would get you killed. This is the equivalent of discovering that umbrellas work when it rains.
But here's what really happens. Retail watches this segment. Retail hears "income stream" and pictures passive cash flowing into their account like dividends from a blue chip stock their grandfather owned. Retail does not hear "undefined risk" or "gamma exposure" or "rolling short deltas into a reversing trend." Retail hears income and thinks money appears.
The rotation itself is noise. Tech sold off because something changed or nothing changed or a butterfly flapped its wings in Jakarta. Kilburg responded with a trade structure. Fine. The structure either has positive expectancy or it doesn't. The rotation has nothing to do with it.
You could run this exact same segment in any quarter of any year. Swap out tech rotation for energy pullback or financials breakout or consumer staples doing whatever consumer staples do when nobody's watching. The trade works or it doesn't based on volatility surface and skew and whether implied exceeds realized over the holding period. The story is set dressing.
Somewhere right now a guy with a Robinhood account and seventeen dollars in buying power is googling how to sell iron condors. He watched Kilburg explain this trade. He understood maybe forty percent of the words. He's convinced he found the cheat code. He'll be assigned on both sides of the spread by July and he'll blame the market for rotating wrong.
Income streams flow downhill, and retail is always standing at the bottom holding a leaky bucket.
Photo by Infrarate.com on Unsplash
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