The Spread: A “Good” Bubble?

Matt Raebel

Matt Raebel


Welcome to The Spread, I’m Matt Raebel.

Boy there’s a lot of talk of bubbles these days. With bitcoin ballooning up past 50 K – and then back down again – it’s no surprise that there’s the usual talk about how it’s “a bubble” or “rat poison squared.” 

But then there are JPMorgan strategists Marko Kolanovic and Bram Kaplan, who proposed there might be a “good” bubble for a change – depending on who you ask. The two strategists wrote this week that the spread between the VIX and two-week realized volatility on the S&P 500 has widened to a point where it looks like the stock market might rally. Kolanovic and Kaplan said in a note on Wednesday that historically when this happens, the VIX falls and the stock market rallies within three months approximately 87 percent of the time. They didn’t say what happens the other 13 percent of the time, but I imagine it involves a lot of crying and flipping of tables.

Speaking of rallies, stock for GameStop – which people seem to insist on calling a “meme” stock now – saw a volatile rally Thursday morning that was so turbulent that trading for the stock had to be halted three times in the first half hour of trading. 

No one is exactly sure why this happened, but some suspect that the departure of a GameStop executive from the company triggered another round of retail shenanigans from Reddit. Jim Bell, the chief financial officer of GameStop, is resigning from his position over a disagreement on strategy, according to a Bloomberg report. Apparently Ryan Cohen – a GameStop board member – has been pushing for change in the company, and it seems Bell wasn’t having it. Probably for the best on Bell’s part – I wouldn’t want to have his job right now. Plus he walked away with a cool $30 million in severance, so that probably didn’t hurt. 

Anyway, enough about GameStop. The OIC has announced its keynote speakers for the Options Industry Conference in April, which will be – you guessed it – virtual this year. Allison Herren Lee, acting chair of the SEC, and Randal Quarles, Federal Reserve vice chairman for supervision, will be speaking at the event. Registration is open now, so head to the link below this video to get yourself on track to attend.

We’ve got two new videos up on the site now; one is our latest edition of “Path to Electronic Trading” starring Peter Fredriksson, and the other is our newest entry in the Open Outcry Traders History project with Mike Cavanaugh. JLN also published a new podcast on the hemp business in which Thom Thompson interviewed the CEO of PanXchange, Julie Lerner. As for me, that’s gonna do it for The Spread this week, so until next time, stay safe and happy trading.


(Registration) A New Virtual Experience  April 28 – 29, 2021



Bitcoin falls below $54,000 as derivatives positions worth over $1 billion are liquidated

Yogita Khatri – The Block


Market Wrap: Bitcoin’s Below $50K as Investors ‘Wait and See’ Amid Market Reset

Muyao Shen – Coindesk


JPMorgan’s Kolanovic Says ‘VIX Bubble’ May Spark Stock Rally

Joanna Ossinger – Bloomberg


GameStop shares extend surge in early trading

Eric Platt and Aziza Kasumov – FT


GameStop Jumps After Finance Chief Pushed Out Over Strategy

Olga Kharif – Bloomberg


Hemp In ‘Year of Transition,’ PanXchange CEO Says

Suzanne Cosgrove – JLN


Peter Fredriksson – The Path to Electronic Trading

John Lothian – JLN


Mike Cavanaugh – Open Outcry Traders History Project

John Lothian – JLN


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Past The Spread Episodes

The Spread: Tiger Billionaire

The Spread: Tiger Billionaire

This week on The Spread, the unregulated crypto exchange Deribit announces a bitcoin volatility index, the CME says over 1 million micro e-mini equity options contracts traded, and more.

The Spread: Moonshot

The Spread: Moonshot

This week on The Spread, bitcoin options hit records for bullishness, the OCC adds two industry veterans to its board of directors, and more.

The Spread: Boca On-Demand

The Spread: Boca On-Demand

This week on The Spread, FIA hosts a virtual version of Boca, Bill Brodsky and Steven Sears start an options-focused asset management firm, and more.

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