Starbucks spread. In at 80 cents. Out at $1.08. One day. While everyone obsessed over oil.
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I paid 80 cents on a Starbucks In/Out spread. This morning I sold it for $1.08. Done.
| 35% profit in one day. | Meanwhile, oil is ripping, and the tape is whipping in every direction. None of it mattered. I knew the expected move. I knew the range. I traded it, took the money, and moved on. | That is how you survive a market like this. Fast. Defined risk. | You do not need to be right about Iran. | You need to know what the options are pricing in and trade within that range. The expected move tells you exactly what the market thinks is possible today. Use it. | Now here is what I was watching while that Starbucks trade was on. A story that broke this morning and has nothing to do with oil. And unlike Iran, this one does not resolve on a headline. | Blue Owl Capital just disclosed the numbers on their private credit funds. Private credit is money lent directly to companies by investment firms, not banks. | It became one of the hottest asset classes of the last decade. A $1.8 trillion market built on the promise of better yields and patient capital. | The patience is running out. | Investors in Blue Owl's flagship $36 billion fund asked for 22% of their money back in the first quarter. | That is up from 5.2% the prior quarter. Their $6 billion tech-focused fund saw investors ask for 41% back. Blue Owl capped both funds at 5%. The rest is locked. Investors who wanted out are not getting out. | Not just Blue Owl. Ares saw 11.6% redemption requests. Apollo saw 11.2%. BlackRock-owned HPS saw 9.3%. One executive inside the industry said we are in peak redemption mode. Peak. | Now look at who is sitting near lows today while everyone is talking about Iran. Blackstone. BlackRock. KKR. None of them are oil companies. This is a different problem entirely. | The tech fund is the part that gets me. It is getting hit not because of the Strait of Hormuz. | Investors are nervous about AI disrupting software companies that borrowed heavily from these funds. That concern does not go away when there is a ceasefire. It exists completely independent of anything happening in the Middle East. | So yes, maybe Iran gets resolved. Maybe the Strait opens, oil comes off, the S&P catches a bid. Fine. Great. | You still have $1.8 trillion in private credit being tested for the first time. | Investors locked out of funds they thought were liquid. Redemption requests rising every quarter for three straight months. That does not get fixed on a Sunday night tweet. | My approach in a market like this: stay nimble. Use the expected move to define your range. | Know what options are pricing in for the day and the week. Do not overhold. Take the trade, book the gain, move on. Defined risk, fast exits, no heroics. | The Iran trade is the obvious one. The private credit story is the one worth watching after Iran is over. | To your success, | Don Kaufman | P.S. I've been racking up wins trading 0dte options for the last several weeks using the expected move. Each week, I lay out 3 0dte trades to my members. If you want to start receiving them, click here. | | | | | | |
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