Ep84 - Index Options and The Wheel with Kevin Davitt of Nasdaq
Summary
In episode 84 of Wealth Building With Options, host Dan Passorelli interviews Kevin Davitt, Nasdaq’s Index Options Content Lead, to explore the application of the "Wheel" strategy to cash-settled index options like NDX and XNDX. They discuss how retail investors can adapt single-name strategies to index products, highlighting the benefits of cash settlement, Section 1256 tax advantages, and the elimination of early assignment risk. The conversation also covers the rise of smaller notional products like XNDX for accessibility, the use of spreads to manage margin, and how "poor man's dispersi…
Topics discussed
Intro: Product evolution and prediction markets
Episode 84 introduction and guest background
Kevin Davitt's career: CBOE and teaching options
TradLink experience and the shift to systematic trading
Market structure changes and the rise of optionality
Nasdaq's role in options exchanges and competition
Coaching assessments and behavioral risk psychology
The value of learning and long-term student impact
Product innovation and the 'product graveyard'
Kevin's current role: content, retail, and liquidity
Communicating complex concepts to new audiences
Strategy portability: SPX vs NDX and backtesting
Applying the Wheel strategy to index options
Notional exposure, spreads, and portfolio hedging
Smaller index products (XNND) and tax benefits
Dispersion trades and managing decay with index options
Using index calls to hedge individual stock holdings
Margin requirements and risk definition in index options
Guest resources and closing remarks
Show outro and paid subscription details
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