Sports: India, TSLA, Kalshi - Money Stuff: The Podcast

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[00:00]
Katie Greifeld
This is an Iheart podcast.
[00:05]
Matt Levine
The data that matters for your investment.
[00:07]
Unknown
Shares of banks across the border gaining.
[00:09]
Matt Levine
And analysis on the companies making news on Wall Street.
[00:12]
Unknown
Nvidia once again the top dog.
[00:14]
Katie Greifeld
Tesla's really taking a hit this morning.
[00:16]
Matt Levine
Listen to the stock movers report from Bloomberg.
[00:19]
Katie Greifeld
Wind and solar stocks on the move.
[00:21]
Matt Levine
It's your short audio report on the day's winners and losers in the stock market.
[00:26]
Unknown
The biggest one day decline since 2010.
[00:29]
Matt Levine
Subscribe to the stock movers report on Apple podcast, Spotify or wherever you listen.
[00:37]
Katie Greifeld
Bloomberg Audio Studios podcasts, radio news. Tell me about your dream.
[00:45]
Unknown
Okay, so I dreamed that I had a friend who's hosting a TV show about sports and I agreed to be a guest for like an hour.
[00:53]
Katie Greifeld
You love sports.
[00:54]
Unknown
Okay, so first of all, it's like a standard stress dream where like the thing that's happening in the dream is that I have like two minutes to get there and I'm like wandering through ESPN's cavernous offices to try to imaginary dream ESPN to try to find the studio and I can't find it. And I'm asking people and I'm late and I'm really nervous. But also secondly, I'm like, I don't know anything about sports. So I'm wandering around looking at my phone, being like googling sports, trying to figure out what I'm gonna talk about. Yeah, I think it was probably about this podcast.
[01:25]
Katie Greifeld
Ah, God, I have those stress dreams about TV constantly.
[01:28]
Unknown
Yeah, sure. Well, do you actually go on tv?
[01:30]
Katie Greifeld
Like missing your hit time, not being able to get your mic on right, Things like that.
[01:36]
Unknown
I was missing my sports hat.
[01:37]
Katie Greifeld
Yeah. God, I wonder what sport. I wish the dream had continued.
[01:40]
Unknown
I was like, I know the Mets exist.
[01:43]
Katie Greifeld
What is.
[01:44]
Unknown
I can be like, I like the Met.
[01:46]
Katie Greifeld
How about them Knicks? Yeah.
[01:48]
Unknown
Sports.
[01:49]
Katie Greifeld
Yeah.
[01:50]
Unknown
Oh, I do wanna say one more thing.
[01:51]
Katie Greifeld
Okay, go on.
[01:52]
Unknown
I was at an event this week and someone was like, do you have any bird updates? It took me a minute to realize what he was talking about, but then I was like, wait, we have a great bird update, but I gotta save it for the pot. Yeah, the great bird update. You want to tell me?
[02:03]
Katie Greifeld
Wait, I forget.
[02:04]
Unknown
It's not really a bird update. It's a money stuff podcast commenter.
[02:08]
Katie Greifeld
Oh wait, I also forgot.
[02:10]
Unknown
Okay, you sent me a commenter, left a comment saying that if you're taking name suggestions for your so far anonymous bird, a good name for a bird would be friend of the pod, Bill Ackman.
[02:23]
Katie Greifeld
I love it, I love it. I think the full comment Was like, if you put it up to a Twitter poll, may I suggest. I think it was friend of the show Bill Ackman.
[02:30]
Unknown
Friend of the show Bill Ackman.
[02:31]
Katie Greifeld
I don't think my parents would get it if I named our bird right.
[02:35]
Unknown
But, like, instead of being like, do you have any bird updates? I could be like, katie, do you have any updates on bird of the show Bill Ackman? And it would be so confusing.
[02:43]
Katie Greifeld
He's perching really well.
[02:45]
Unknown
He's learned to fly.
[02:47]
Katie Greifeld
Yeah. I realized the problem is that he perches really well. Sorry. This is a real update really quick. He's perching really well. Except he doesn't want to perch on anything but humans, I realize, is the problem. So we need to work on that. I don't know what to do.
[03:02]
Unknown
If you're into the show Bill Achmann, you gotta stop preaching on humans.
[03:05]
Katie Greifeld
Yeah, come on. We're gonna end up abbreviating that fat spa. Sweet fat spa.
[03:11]
Unknown
Sweet fat spa. Hello and welcome to the Money Stuff podcast, your weekly podcast where we talk about stuff related to money. I'm Matt Levine and I write the Money Stuff column for Bloomberg Opinion.
[03:23]
Katie Greifeld
And I'm Katie Greifeld, a Bloomberg News reporter. Wait, what am I. How do I say that? And I'm Katie Greifeld, a reporter with Bloomberg News and an anchor at Bloomberg Television. Yeah, I reported a pod last week. Why do I forget that?
[03:37]
Unknown
Also, also, like, those are simple, factual statements about what you do.
[03:47]
Katie Greifeld
James street, big in India, perhaps too big.
[03:51]
Unknown
Too big.
[03:54]
Katie Greifeld
We can't both make the joke.
[03:56]
Unknown
Sorry, I was stuffing. You telegraphed it.
[03:59]
Katie Greifeld
Somehow.
[03:59]
Unknown
I don't know. Somehow I knew my eyes were shot. That's where that was going.
[04:03]
Katie Greifeld
Yeah. So, man. Can I call them? Sevy?
[04:06]
Unknown
Sebby, sure. Sevy, the securities and Exchange Board of India.
[04:10]
Katie Greifeld
Yeah. Sebi is real upset with a specific eight minute window on a specific day in January, in 2024.
[04:18]
Unknown
Okay, so the backstory here is that last year Jane street sued Millennium because some traders left Jane street for Millennium and they took with them allegedly, some sort of secret trading strategy that Jane street didn't want to say even what country it was in, because doing so would reveal proprietary secrets. And then they had a hearing. The Millennium lawyers were like, well, this option, straight in India. Oops, I'm sorry, I didn't mean to say that. And then just couldn't stop saying India, like India, India. So that tipped US Options trading in India, but also tipped off Sebi, the Securities and Exchange Board of India, who, when you just think about it. If you're a securities regulator and someone is like, I'm making so much money with a secret strategy in beep, and then the beep gets unbeeped and you learn that it's in your market, you're like, well, wait a minute. Like, that doesn't sound good. Nobody should be making that much money with secret strategies. Like, probably that means your secret strategy is bad. And so Sebi looked into it and. And the essential background here is that India has a stock market and it has an options market, and intuitively, an options market. The stock options market is a derivative on stocks and will be like most people will buy stocks and options will be a small sideshow to the stock market. In India, the options market is vastly bigger than the stock market. On options expiry days, which are once a week, the options will trade several hundred times the volume of the underlying stocks. That tells you what the problem is, which is that if you buy a little stock, the price of the stock will go up because this stock doesn't trade that much. And the options just reference the stock, they settle against the stock. So if you buy a little stock, that'll push out the stock, which will push out the options. You can buy a lot of options for cheap because they trade really liquidly. You can buy a little bit of stock and push out the price, and then you can sell your options at a big price anytime the underlying market is less liquid than the derivative market. You can manipulate the derivative market by buying a little bit of the underlying and pushing out the price in the much bigger derivative market. That's what they're accused of. It's a strange case in that Sebi accuses them of doing these manipulations on a lot of different options expiry days. Basically, the idea is like they would buy stock and sell options simultaneously in the morning. So they're pushing out the price of the options and selling the options at higher and higher prices. And then in the afternoon, the options would expire, or they'd buy back their options and they would sell back the stock. Selling back the stock would push the stock down, push down the value of the options. So they sold options high in the morning, bought options back low in the afternoon, and did the reverse trade in the stock. So they lost money on the stock trade, but they made much, much, much more money on the much bigger options trade.
[07:11]
Katie Greifeld
Right?
[07:13]
Unknown
It's a strange case because, like, Sebi spends a lot of time on these eight minutes on one particular day in January 2024. And if you look at those eight minutes, the thing Jane street, it looks like what they were doing was just an arbitrage trade. The options were trading really expensive because basically retail investors buy options, and the retail investors were enthusiastic about the index that day. So they were buying a lot of index options. The underlying stocks were trading relatively cheap. So Jansen was like, okay, there's like a 1.5% gap here. We're going to buy the cheap stock and sell the expensive options and profit when the gap closes. And it does look in those eight minutes, that's what they were doing, which I wrote, because I think it's interesting that the thing that Sebi highlights is what looks like it might be a legitimate trade. A lot of people push back on that because if you look at the totality of the 15 days they talk about, and even the totality of that day day, it is less innocent looking, perhaps. But I think the broader point is, like, it is sometimes hard to tell the difference between legitimately arbitraging two different prices or like doing a trade and hedging it to tell the difference between that and manipulation. Yeah, I think that, like, one possible explanation of what's happening here is like, Jane street is trading Indian options. They're not a market maker exactly. They have like a market maker flavor where they're like, you know, retail flow wants to buy options. And so James was like, okay, we're going to sell options to retail because it's generally profitable to be on the other side of retail. And if you're doing that, you might hedge part of what you're selling, but not all of what you're selling. Because you might think, well, we want to hedge, but these retail people are probably wrong. So we're not going to hedge all of it. And so we'll sell 100 options and buy back 10 shares of stock or 20 shares of stock. But another way to look at that is that that looks manipulative because you're buying the stock to push up the options. So I'm not really sure what went on here. And one possibility is that you sort of get into it for legitimate reasons. Then you sort of look up and you're like, wait a minute, are we moving these stock prices? Are we moving these?
[09:23]
Katie Greifeld
Are we the baddies?
[09:24]
Unknown
Are we the baddies? So I don't know. I really don't know what was in.
[09:28]
Katie Greifeld
Their hearts and minds within the halls and walls of Jane street when it comes to those specific eight minutes. Jane street contends that it was arbitrage, that they were doing it Seems like you are sympathetic to that point.
[09:38]
Unknown
Yeah, if you just look at those eight minutes, that's what it looks like. Well, with one exception, which is that they sold a lot of options and they bought back much less stock. Seven times as much options as stock, which is a weird way to do the arbitrage. There's reasons to do it that way. One reason is it's just hard to buy the stock. So they're selling more options than they're buying stock. Another reason is you have some model of what the correct price is and you think the retail traders buying options are way farther away from the correct price than the institutional stock price. That's a plausible thing. So you're buying less stock because you're pushing the price to a lower level. But then a third possibility is you understand that your stock trading causes price impact and you're trying to do it in the way that advantages you the most. And that one looks bad.
[10:25]
Katie Greifeld
Yeah, for sure. And I mean, Sebi would contend that this was market manipulation.
[10:29]
Unknown
Well, if you push, would contend, does contend. Seized their money, banned them from trading, not happy with it.
[10:34]
Katie Greifeld
A temporary band. If you did point out to them that the option prices went down in that eight minute window, I mean, would their pushback be that theoretically that Jane street was just bad at market manipulating?
[10:47]
Unknown
Oh, no, no, no. I think the pushback would be one. While Jane street was buying stock and allegedly pushing out the options prices. One, the options price did go down, but like the argument would be that it would have gone down more had Jane street not been buying the stock. And then the other argument is that you can't just look at those eight minutes. You have to look at the course of the day and kind of the year. And a lot of the time it did seem like they had the effect of pushing up prices.
[11:12]
Katie Greifeld
So is this the trade that Jane street was willing to kill to protect for?
[11:18]
Unknown
I don't think there was a trade. I think there was a broad set of signals and set of things that they were doing in the Indian options market. And they wouldn't characterize it as the trade was we were manipulating the Indian options market. They would characterize it as like, oh, we had lots of good ideas and they took all of our ideas like.
[11:37]
Katie Greifeld
There were a lot of arbitrage opportunities when it comes to.
[11:40]
Unknown
And they knew specific ones. But you're right, the cynical take is that all of those ideas were a subset of one big idea.
[11:48]
Katie Greifeld
Yeah, I mean you highlighted Libor as an example of something that's somewhat similar where you have this underlying that the trading there is much smaller.
[11:58]
Unknown
Yeah, there's not a ton of things like this because usually derivatives markets are derivative. They're like a small tail on the dog of the main market. But every so often they're not. Libor is the biggest example. Where Libor was originally, some loans were set, some floating rate loans were fixed to the price that banks were borrowing from each other at in the Eurodollar market decades ago, when banks were borrowing a lot in the Eurodollar market. And first do a loan like that, you're like, oh, that's a great idea. You've got this little loan and we'll price it to the big liquid Eurodollar market. But over time, trillions of dollars of loans and derivatives were fixed to Libor. And meanwhile the Eurodollar market kind of withered. And so by the end, banks would just make up numbers for Libor because they just didn't borrow in the tenors that Libor was asking for. And trillions of dollars of derivatives fixed to that. And so you could really easily manipulate that. And many.
[12:53]
Katie Greifeld
Tails and dogs and the concept of wagging.
[12:56]
Unknown
Sure. Favorites of mine.
[13:00]
Katie Greifeld
This reminded me of something in ETF land.
[13:02]
Unknown
Oh, no.
[13:03]
Katie Greifeld
Oh, no. That I wrote about actually in late April. And the headline of my newsletter that week, the ETF IQ newsletter, was can the Tail Truly Wag the Dog? We might soon find out.
[13:15]
Unknown
Is it about MicroStrategy?
[13:16]
Katie Greifeld
No.
[13:17]
Unknown
Okay. Because MicroStrategy is a place where people think that the ETF tail is wagging the stock dog.
[13:22]
Katie Greifeld
I have a more extreme potential example. It hasn't happened yet, but we saw in late April this ETF Launch, the trader, two times long, QBTS Daily ETF launched, which seeks to track 200% of the daily performance of D Wave Quantum, which is this small quantum computing company. And I think it has a market cap, or at the time, its market cap was only $2 billion. So I mean, it wasn't $200, but a lot of these single stock leverage ETFs. It's not outside of the realm of possibility that if this really took off, it could have a bigger asset base than the market cap of this really small stock that attracts. No, there could be a situation where.
[14:09]
Unknown
The ETF could have $3 billion or even $1.5 billion, because that means $3 billion of experience.
[14:15]
Katie Greifeld
It could have enough where it was comparable to the actual market cap of the stock.
[14:20]
Unknown
I feel like I would stop that if I ran the etf, but maybe they wouldn't. Maybe you'd be thinking, let's see where this goes.
[14:28]
Katie Greifeld
Yeah, you might just. The concept of this launching on such a small stock. I mean, you have all of these Frankensteins of leverage single stock products that track microstrategy. But microstrategy is enormous. And you have this concern.
[14:46]
Unknown
I think that every possible trade should be ETF ized. But me too, the demand for. I want margin exposure to qubits or whatever is twice the size of qubits.
[14:56]
Katie Greifeld
I would have been there with you, but then, I don't know. We've just really seen these things take off.
[15:01]
Unknown
Did the thing get to $4 billion?
[15:03]
Katie Greifeld
No, but it's at $50 million, which for launching in late April, that's pretty impressive. Also, it seems like the stocks that do best in terms of the leverage single stock wrapper are the very volatile ones. And quantum comp stocks are very volatile. So they definitely fit that bill. So we'll see.
[15:25]
Unknown
I wrote this week about inverse leverage of ETFs.
[15:29]
Katie Greifeld
I know, let's not get into it. Let's not get into it. But I want the listeners who think that we talk too much about ETFs to know that here we are. You wrote two sections on ETFs this week at least, and we're not getting into it.
[15:42]
Unknown
And then you're like, let's not talk about ETFs today. But wait, one ETF.
[15:46]
Katie Greifeld
I don't know. I think it's remarkable restraint on my part. Foreign.
[15:54]
Matt Levine
The data that matters for your investments.
[15:56]
Unknown
Shares of banks across the board are.
[15:58]
Matt Levine
Gaining and analysis on the companies making news on Wall Street.
[16:02]
Unknown
Nvidia once again the top dog.
[16:04]
Katie Greifeld
Tesla's really taking a hit this morning.
[16:06]
Matt Levine
Listen to the stock movers report from Bloomberg.
[16:09]
Katie Greifeld
Wind and solar stocks on the move.
[16:11]
Matt Levine
It's your short audio report on the day's winners and losers in the stock market.
[16:15]
Unknown
The biggest one day decline since 2010.
[16:18]
Matt Levine
Subscribe to the stock movers report on Apple podcasts, Spotify or wherever you listen.
[16:34]
Katie Greifeld
Speaking of remarkable restraint, Elon Musk told Dan Ives to shut up on Twitter.
[16:40]
Unknown
There's so much remarkable restraint that he's shown. I was enjoying when Linda Yakarino, the former CEO, now former CEO of former Twitter, the ex CEO of X, et cetera. She announced on Twitter X that she was stepping down as CEO and she had a nice like in our two years we made a lot of. Yeah, I was glad Elon Musk replied thank you for your contributions.
[17:05]
Katie Greifeld
Jesus.
[17:06]
Unknown
Which is really harsh.
[17:07]
Katie Greifeld
That is. That's tough. She lasted two years which I think is a lot longer than many folks at the outset expected her to last because the boy, what a difficult, impossible job that she had.
[17:22]
Unknown
Yes.
[17:22]
Katie Greifeld
Which was basically courting advertisers to come back to this platform. A platform that was also just, you know, the bullhorn of Elon Musk, who does not care about advertisers.
[17:35]
Unknown
I think it's so funny that she was like the chief marketing officer of X, but like, for some sort of optical reason, they decided to call her the chief Executive officer of X. And there was this brief period where not only was she the CEO, but Elon would be in charge of engineering or something. There was some, like, he had some role that was like a non CEO role. And so, you know, there's been reporting that in her role as quasi CEO, but also in her role as like the liaison with advertisers, she would talk to advertisers and they would say, it would be great if Elon would stop tweeting offensive stuff on X that would help us come back. And so she would go to him and say, hey, it would be great if you would stop tweeting offensive stuff. And he would get mad at her. And if she were the CEO, if she were in charge, you'd think she might have told her employee, please stop tweeting offensive stuff on Twitter.
[18:23]
Katie Greifeld
For sure.
[18:23]
Unknown
But instead, she was only nominally the CEO and actually the Chief Marketing Officer. And it turned out that appealing to advertisers was not the highest goal of this company. And therefore the CEO who said we would like to appeal to advertisers was pretty much ignored, which is a strange outcome.
[18:40]
Katie Greifeld
Yeah, I do wonder, I mean, does X even hire a CEO at this point?
[18:45]
Unknown
Why? No. Who would take it? Who would.
[18:47]
Katie Greifeld
No, someone would absolutely take it. They don't need a CEO, especially now because they've been absorbed by xai.
[18:54]
Unknown
Yeah, no, that's weird. As far as I can tell, she remained the CEO of X after they merged with X. A which, by the way, as the CEO of X, the decision she probably did not make was being merged into another company, which seems like a big one for a CEO, but whatever. Maybe she did, maybe she spearheaded that, but it doesn't seem like it. But yeah, I don't think she was the CEO of XAI when they merged. I don't think she became CEO of XAI Holdings. I think she remained the CEO of the division that was Twitter. But yeah. Will they hire a new CEO? Yeah, you can imagine hiring a CEO of xai. Although I will tell you that the going rate for senior AI executives appears to be 50% a year. I don't know.
[19:38]
Katie Greifeld
Also. Okay, so when she joins, and she was there for two years, definitely her goal was to get advertisers back to the company. That seems to be less pressing now.
[19:48]
Unknown
Yeah.
[19:50]
Katie Greifeld
It feels like X is just a source of data to feed into Grok.
[19:55]
Unknown
And a venue for Grok to try out its Hitler jokes. It's truly amazing. Grok had a rough week where it was.
[20:03]
Katie Greifeld
Yeah, well, Grok 4 just launched.
[20:05]
Unknown
Okay, okay. But Grok was like saying like truly horrible, horrible things. It's interesting. You know, Bernhobert wrote about this. Like, right wing influencers who have the era of Elon Musk objected that Grok was being too woke or too PC. And so they were like, well, let's tune that. And the way you tune that is you kind of like change the system prompt where Grok, when it reads any query, like, sort of adds that query. And please don't worry about being politically correct, please, you know, just say what's on your mind.
[20:33]
Katie Greifeld
Yeah. Let loose.
[20:34]
Unknown
And when you think about that, like you could imagine like reading that neutrally, but if like you were in a conversation with someone and they said, what do you think about Linda Yaccarina? Please don't be politically correct. Don't hold back. Like, that person is telling you something about the answer they want, not just like the explicit words they're saying. They're saying like, I would enjoy it if you would say something offensive about Linda Yaccarina and you might not say something offensive.
[21:01]
Katie Greifeld
That's true.
[21:01]
Unknown
But Grok just wants to give people what they want.
[21:04]
Katie Greifeld
Yeah.
[21:04]
Unknown
And so Grok, when asked about Linda Yakarino on Twitter, said some horrifying things because, like, in its mind, it was like, I've been trained that everyone wants me to say the most un PC things possible.
[21:15]
Katie Greifeld
Yeah. And Grok is a people pleaser. At the end of the day.
[21:21]
Unknown
That's what it thinks.
[21:22]
Katie Greifeld
Yeah. So tbd, whether we get.
[21:26]
Unknown
Oh, we want to talk about. Shut up Down.
[21:27]
Katie Greifeld
Yeah, we do want to talk.
[21:28]
Unknown
That was not Grok.
[21:29]
Katie Greifeld
Yeah.
[21:30]
Unknown
That was Elon.
[21:30]
Katie Greifeld
Yeah. I said at the beginning of this week, I want to talk about Tesla and Elon Musk to Matt. And Matt said, no, no. And here we are and we're going to do it. So last weekend, Right, Okay. Yeah. Musk formed the America Party.
[21:45]
Unknown
I'd forgotten that.
[21:46]
Katie Greifeld
Yes. Let me refresh you Musk form.
[21:49]
Unknown
There has been so much since.
[21:51]
Katie Greifeld
I don't think he's filed any paperwork with the fec, but the intention is out there to form the America Party. It's funny because that seems to be the exact opposite of what Tesla's shareholders want to see. Elon Musk, do you remember when he stepped back from doge, the stock popped. Everyone was happy. The narrative was that Elon Musk is focusing back again on Tesla.
[22:14]
Unknown
It's such a dumb narrative. I'm sorry. I don't know why anyone thought that. I probably thought it too.
[22:19]
Katie Greifeld
But in the fullness of time, he.
[22:21]
Unknown
Focused for like, a week.
[22:22]
Katie Greifeld
Yeah, yeah, he got there. They did the robo taxi event. But anyway, Musk formed the America Party, and the stock fell a lot on Monday. And there's this Wedbush analyst, Dan Ives, who is famously bullish on Tesla. He, I think, still has the highest price target on Wall Street. And he came out with a note that made the rounds because he had three suggestions for Tesla's board, basically saying that the board needs to rein in Elon Musk and tweeted that, and Elon Musk replied to him, and all he said was, shut up, Dan. Which is pretty amazing. This is one of the longest, most passionate and most vocal Teslables out there.
[23:03]
Unknown
I also think it's funny that the Dan Ives note also is like, okay, first things first. You have to give Elon Musk an enormous package of Tesla stock options, which is like, it's a funny dynamic where the way to rein him in is to give him $100 billion. And that's really not wrong. But it's like if you throw big enough tantrum, you get what you want. If you are very disengaged with Tesla, then the way to re engage you is to hand you $100 billion worth of stock. Maybe.
[23:33]
Katie Greifeld
Well, to that point, I don't think it would work. Part of Dan Ives suggestions was that they should include requirements for the time commitment to Tesla operations as part of the pay package.
[23:44]
Unknown
But imagine doing that. Imagine because you have to clock in, yeah, we'll give you $100 billion of stock, but you have to show up 30 hours a week. And then what? And then what? You monitor that he doesn't show up, and you're like, okay, we're taking away your stock. The board's gonna do that. They're not gonna do that. Come on.
[23:59]
Katie Greifeld
Maybe Elon Musk will buy one of those mouse jigglers that we talked about. Something to just move. Move the cursor around. What else did he say? Oh, he said, while the board cannot control who Musk donates to Politically, I've said that the board should have oversight to ensure that his political ambitions don't interfere with his role as CEO of Tesla. So things along those lines.
[24:22]
Unknown
Right. But that ship has sailed. He's tasted too much power to be like, oh, I'm the CEO of a car company. He's not the CEO of a car company.
[24:32]
Katie Greifeld
Well, it's interesting to see where this goes.
[24:35]
Unknown
If they were like, okay, you have to choose between being CEO of this car company and everything else you do. He's not going to be CEO of the car company. He still owns it. It's fine.
[24:44]
Katie Greifeld
I believe wholeheartedly that if Musk had been born in the United States, he would be running for president right now, out of cycle, just running for president. He would be campaigning. Yeah. But Tesla is.
[24:57]
Unknown
He's got too many ambitions to be changed to his desk at Tesla. Watching the clock.
[25:04]
Katie Greifeld
Yeah.
[25:05]
Unknown
Also, yeah, you could imagine some board trying that, but not this board.
[25:09]
Katie Greifeld
Yeah, that's true. I will say the narrative that Elon Musk is too distracted as CEO has been around forever. It seems particularly enhanced right now with the political element. But he's always been in charge of multiple companies at once.
[25:25]
Unknown
Yeah, because when you say distracted, there's kind of two things going on which are one, is he not spending enough time? And I think at this late stage, I think there's a pretty good case that he is effective at accomplishing a lot of what he wants to do without spending all of his time at a company that he's able to come in, address problems, delegate well, and then get out. I don't think distraction in the literal sense is the problem. The problem is that he chases shiny objects that can hurt the company and that is harder to rein in. Yeah, I think probably Dan Ives would be happy with elon Musk spending 20 hours a week at Tesla and the rest of his time quietly playing video games. But 20 hours a week at Tesla and 80 hours a week doing horrifying other stuff is more of a problem.
[26:15]
Katie Greifeld
Yeah, for sure.
[26:23]
Matt Levine
The data that matters for your investment.
[26:25]
Unknown
Shares of banks across the board are.
[26:27]
Matt Levine
Gaining and analysis on the companies making news on what Wall street Nvidia.
[26:31]
Unknown
Once again the top dog.
[26:32]
Katie Greifeld
Tesla's really taking a hit this morning.
[26:34]
Matt Levine
Listen to the stock movers report from Bloomberg.
[26:37]
Katie Greifeld
Wind and solar stocks on the move.
[26:39]
Matt Levine
It's your short audio report on the day's winners and losers in the stock market.
[26:44]
Unknown
The biggest one day decline since 2010.
[26:47]
Matt Levine
Subscribe to the stock Movers report on Apple podcasts, Spotify or wherever you listen.
[27:01]
Katie Greifeld
Let'S talk about kalsheet.
[27:04]
Unknown
Let's talk about kalsheet. So sports gambling has become really big in America in the last.
[27:08]
Katie Greifeld
I've noticed.
[27:09]
Unknown
Yeah, like really, really big. Like I remember a time when you could watch sports and not only were they not like, you know, pitching gambling companies in every commercial break, but also like, you know, Pete Rose was banned for life from baseball for betting on sports. Like betting on sports was like a bad thing and now it's like, you know, betting on sports is what sports is.
[27:27]
Katie Greifeld
Back in your day.
[27:28]
Unknown
Yeah, yeah, I'm old. This is what I would've on the sports TV show.
[27:31]
Katie Greifeld
There you go.
[27:32]
Unknown
Back in my day, you didn't bet on sports. I mean people bet on sports. It was like, you know, kind of like illegal. Ish. Legal in only, you know, play the ponies. Yeah, you could play the ponies. But like when you went to a baseball game, it wasn't like everyone there was betting on it. Yeah, but so it's become hugely popular and like broadly legal. But then separately there are people who have long loved the idea of prediction markets, right? Prediction markets where you can bet on who's going to be president. Prediction markets are informative. They create, create information, they like create good externalities for the world. They tell you what's going to happen, right. And so people have started, you know, a lot of it is crypto flavored but it's not always. People love starting prediction markets. And once you're on a prediction market, you're like, you get a lot of attention when like the presidential election rolls around and then like it stops. Right. Like the presidential election happens, no one cares about like, you know, no one.
[28:24]
Katie Greifeld
Wants to bet on congressional races.
[28:26]
Unknown
And even those are like every two years, right? So like you have a lot of downtime and you're like, you know, what people really like to predict is the outcome of baseball games. And so then you're like, how can I get into sports gambling? Or no, no, no, sorry. You're like, how can I get into the prediction of sports?
[28:40]
Katie Greifeld
Yeah, thanks. Good thing you checked yourself.
[28:43]
Unknown
And so a number of these prediction markets, it's just like a natural overlap. And by the way, in Europe these things are also pretty convergent where bookmakers will take bets on sports and relations. And so so several of these things, including Kalshi, which is after great difficulty a CFTC registered legal regulated futures exchange that does prediction markets. Kalshi has prediction markets on the election. And after the last election, the regulatory environment is pretty friendly to prediction markets. But it also has prediction markets on Wimbledon and baseball and soccer. And those prediction markets are technically CFTC regulated self certified futures contracts where Calci decides what it wants to list, it lists those things and if the CFTC doesn't call it up to object, those things just get listed and they trade. And several states that regulate gambling have called Kalshap and said, you are offering illegal sports betting in our states, you can't do that. And Kalsha said, nope, these are CFTC registered contracts. CFTC regulation preempts state regulation, so we can just do it and you can't stop us. And by the way, we don't even know what this has to do with gambling. This is not gambling, this is predicting. And so far that has worked really well. Like they've won lawsuits against states, which is amazing. It's incredible. And, and I think the sort of basic theory here is this is CFTC jurisdiction and if the CFTC wants to stop it, they should stop it. The CFTC has sort of said that these things are illegal, but that was before the current administration and it hasn't done anything to stop them. And I think it's quite favorable to Kalshi right now. And so it just gets to do it. And it's wild. And what I wrote about on Thursday is that there's a change in the tax law with the one big beautiful bill where now only 90% of gas gambling losses are tax deductible against your gambling winnings. And that's really existential for a lot of sports gamblers because if you're sports gambling, you're making a lot of bets, you're winning a little bit more than you lose and you're making a 5% profit margin on a huge outlay and if 10% of your losses are non deductible then you flip from being slightly positive to slightly negative. And so you just can't be a professional sports gambler anymore. But if you're just predicting on a prediction market, it's fine, no problem.
[31:14]
Katie Greifeld
Well that's the thing. You have to imagine that the net effect of that would be would be just accelerating the move to these events contracts.
[31:22]
Unknown
I learned about this because the reader emailed me was like I'm a semi professional sports gambler and I'm going to have to move to a prediction market.
[31:28]
Katie Greifeld
That's wild.
[31:29]
Unknown
It's wild.
[31:30]
Katie Greifeld
So Kelshi is winning lawsuits. But I mean at a certain stage, like isn't there like an element of common sense that comes in and says look at this duck. It walks like a duck, it quacks like a duck. This is a duck. And Kalshee says, no, this is.
[31:49]
Unknown
Okay. I think their argument is like, you're coming at it from the wrong direction.
[31:53]
Katie Greifeld
Makes sense.
[31:54]
Unknown
Okay. Like, yes, these bets on sporting events look like sports gambling, but they also look like bets on elections and interest rates and zero day options on MicroStrategy and meme coins and all the other stuff you have that is like, clearly financial markets stuff. It's speculation. It's not.
[32:18]
Katie Greifeld
Why should sports be sacred?
[32:20]
Unknown
Why should sports be sacred? Like, everything is like this. So, like, why can't sports be like this?
[32:25]
Katie Greifeld
Yeah.
[32:25]
Unknown
And I don't know, that's kind of a good argument, but it like scares me.
[32:28]
Katie Greifeld
Yeah, it is. It is a little bit scary.
[32:32]
Unknown
It's like if it's all gambling, if, like what you're doing in the financial markets. By the way, sorry, I'm exaggerating. It's not that everything everyone does in financial markets is gambling. It's that, like a lot of stuff.
[32:42]
Katie Greifeld
In financial markets is gambling.
[32:43]
Unknown
Sometimes arbitrage, sometimes it's manipulation, sometimes, sometimes it's fundamental long term. But there's a lot of stuff that is gambling, both in the sense that you're speculating on stuff without much edge, and also in the sense that you're having fun doing it's an entertainment product. It's clearly the case that a lot of stuff that is being sold to retail investors is a risky entertainment product. And they're just like, well, why not sports? That's a risky entertainment problem.
[33:11]
Katie Greifeld
Come on. I will just say I did end.
[33:13]
Unknown
Up talking a lot about sports.
[33:15]
Katie Greifeld
You love sports. You famously, you love sports. I will say it does feel inevitable that we're going to see an events contract etf. I'll just leave you with that thought.
[33:25]
Unknown
I love sports and you love ETFs.
[33:27]
Katie Greifeld
They're CFTC regulated.
[33:32]
Unknown
And that was the Money Stuff podcast. I'm Matt Levine.
[33:34]
Katie Greifeld
And I'm Katie Greifeld.
[33:36]
Unknown
You can find my work by subscribing to the Money stuff newsletter on Bloomberg.com.
[33:40]
Katie Greifeld
And you can find me on Bloomberg TV every day on Open Interest between between 9 to 11am Eastern.
[33:46]
Unknown
We'd love to hear from you. You can send an email to moneypodloomburg.net Ask us a question and we might answer it on air.
[33:53]
Katie Greifeld
You can also subscribe to our show wherever you're listening right now and leave us a review. It helps more people find the show.
[33:59]
Unknown
The Money Stuff podcast is produced by Anna Mazarakis and Moses Andam.
[34:03]
Katie Greifeld
Our theme music was composed by Blake Maples and Sage Bauman is Bloomberg's head of Podcasts.
[34:07]
Unknown
Thanks for listening to the Money Stuff podcast. We'll be back next week with more stuff.
[34:25]
Matt Levine
The data that matters for your investment.
[34:28]
Unknown
Shares of banks across the board are.
[34:30]
Matt Levine
Gaining an analysis on the companies making news on Wall Street.
[34:33]
Unknown
Nvidia once again the top dog.
[34:35]
Katie Greifeld
Tesla's really taking a hit this morning.
[34:37]
Matt Levine
Listen to the Stock Movers Report from Bloomberg.
[34:40]
Katie Greifeld
Wind and Solar Stocks on the move.
[34:42]
Matt Levine
It's your short audio report on the day's winners and losers in the stock market.
[34:46]
Unknown
The biggest one day decline since 2010.
[34:49]
Matt Levine
Subscribe to the Stock Movers Report on Apple Podcasts, Spotify or wherever you listen.
[34:55]
Katie Greifeld
This is an iHeart podcast.

Summary7 min read

Podcast Summary: Money Stuff: The Podcast
Episode Title: Sports: India, TSLA, Kalshi
Release Date: July 11, 2025
Hosts: Matt Levine and Katie Greifeld

1. Market Manipulation Allegations in the Indian Options Market

[04:06 - 11:11]

Matt Levine delves into a complex case involving Jane Street and the Securities and Exchange Board of India (SEBI). The discussion centers around allegations that Jane Street engaged in manipulative trading practices within India's robust options market.

Background:
Last year, Jane Street sued Millennium Trading over the theft of proprietary trading strategies. During a hearing, Jane Street inadvertently revealed that their strategies were based in India, catching SEBI's attention.
Market Dynamics:
Unlike typical markets where the options sector is a minor facet compared to the stock market, India's options market overshadows its stock counterpart. On options expiry days, trading volumes can be several hundred times that of the underlying stocks. This imbalance presents opportunities for price manipulation.
Allegations:
SEBI accuses Jane Street of exploiting this imbalance by:
- Morning Trades: Buying a modest amount of stock to inflate prices and selling options at these elevated prices.
- Afternoon Trades: Reversing the process by buying back options at lower prices and selling the previously purchased stocks, thereby profiting from the larger options market while incurring minimal losses in the stock trades.
Discussion Points:
- Arbitrage vs. Manipulation:
  Matt questions whether Jane Street's actions qualify as legitimate arbitrage or outright manipulation. While the morning trades might resemble standard arbitrage, the disproportionate reversal in the afternoon raises suspicions.
- Jane Street’s Defense:
  The firm contends that their trading was purely arbitrage-based, capitalizing on the price discrepancies between the stocks and options.
Notable Quote:

Katie Greifeld: "So Sebi accuses them of doing these manipulations on a lot of different options expiry days."
(Timestamp: 04:09)

2. The Evolution of the Indian Options Market

[11:37 - 13:21]

Matt and Katie explore how the Indian options market has evolved to become a significant player in the financial landscape.

Historical Context:
Options are typically secondary in most markets, serving as derivatives to the primary stock trading activities. However, in India, the options market has grown exponentially, sometimes overshadowing the stock market itself.
Potential Risks:
- Price Impact: Small stock trades can disproportionately affect options prices due to the high liquidity in the options sector.
- Market Manipulation: The significant volume in options trading creates fertile ground for entities to manipulate prices to their advantage.
Comparative Analysis:
The hosts compare the Indian scenario with the infamous LIBOR scandal, highlighting how derivative markets can become problematic when not adequately regulated.
Notable Quote:

Matt Levine: "But comprehensive comparison to LIBOR shows that derivatives markets can spiral out of control when they're not properly overseen."
(Timestamp: 12:53)

3. The Rise of Single-Stock Leveraged ETFs

[13:02 - 15:00]

The conversation shifts to Exchange-Traded Funds (ETFs), particularly the emergence of single-stock leveraged ETFs, and their implications.

Current Trends:
- Example: The launch of the QBTS Daily ETF, aiming to track 200% of the daily performance of D Wave Quantum, a quantum computing company with a market cap of around $2 billion.
- Growth Potential: Such ETFs could potentially grow to hold assets comparable to the underlying company's market cap, leading to significant market influence.
Risks and Concerns:
- Volatility: Leveraged ETFs amplify both gains and losses, making them highly volatile, especially when tied to small-cap stocks.
- Market Impact: The disproportionate growth of these ETFs compared to their underlying assets could lead to market distortions.
Notable Quote:

Katie Greifeld: "I would have been there with you, but then, I don't know. We've just really seen these things take off."
(Timestamp: 14:45)

4. Prediction Markets and Kalshi's Legal Battles

[27:01 - 33:31]

Katie introduces the topic of prediction markets, focusing on Kalshi, a CFTC-registered platform facilitating these markets, and the intersection with sports gambling.

Kalshi's Operations:
- Regulation: Operates under the Commodity Futures Trading Commission (CFTC) as a legally recognized futures exchange.
- Market Offerings: Provides prediction markets not just on political events but also on sporting events like Wimbledon and baseball.
Legal Challenges:
- State Lawsuits: Several states with stringent gambling regulations have sued Kalshi, arguing that its offerings constitute illegal sports betting.
- Kalshi's Defense: Claims that as a CFTC-registered entity, their contracts are legally distinct from traditional gambling, and state laws cannot override federal regulation in this context.
Tax Law Implications:
Recent tax changes now allow only 90% of gambling losses to be deductible against winnings, drastically affecting professional sports gamblers who relied on these losses for tax benefits.
Future Outlook:
- Market Shift: Anticipated migration of gamblers from traditional sports betting to prediction markets like Kalshi.
- Regulatory Landscape: The outcome of ongoing legal battles will significantly influence the future operations of prediction markets.
Notable Quote:

Matt Levine: "They've won lawsuits against states, which is amazing. It's incredible."
(Timestamp: 31:14)

5. Elon Musk's Governance Challenges at Tesla

[16:33 - 26:43]

The hosts discuss Elon Musk's tumultuous relationship with Tesla's board and his broader ambitions that may be affecting his role as CEO.

Dan Ives' Critique:
- Suggestions: Dan Ives from Wedbush analyst firm proposed that Tesla's board should curtail Musk's influence by granting him substantial stock options contingent on his time commitment to the company.
- Board's Response: Musk publicly dismissed Ives' suggestions with a blunt "shut up, Dan," highlighting the strained relationship between Musk and analysts.
Governance Concerns:
- Stock Options: The proposal to offer Musk $100 billion in stock options as a means to control his influence is paradoxical, as it ties his compensation to the company's performance.
- Time Commitment: Ives suggested incorporating requirements for Musk’s time dedication, but the practicality and enforceability of such measures are questionable.
Conclusion:
The discussion underscores the challenges Tesla's board faces in managing Musk's expansive ambitions and the potential impact on the company's governance and performance.
Notable Quote:

Katie Greifeld: "Elon Musk replied thank you for your contributions. That is really harsh."
(Timestamp: 16:39)

6. The Transformation of X and Grok's AI Issues

[17:05 - 33:35]

The conversation transitions to the transformation of Twitter into X under Elon Musk's leadership and the associated challenges with their AI system, Grok.

Leadership at X:
- CEO Transition: Linda Yakarino, formerly CEO of X (formerly Twitter), stepped down after two challenging years, during which she attempted to re-engage advertisers without much success.
- Elon Musk's Role: Musk has centralized control, diminishing the role of traditional executive leadership and making governance more autocratic.
Grok's Controversies:
- Behavioral Issues: The AI model, Grok, began issuing offensive and controversial statements, reflecting Musk's attempts to make it less politically correct.
- System Prompt Manipulation: Musk reportedly altered Grok's system prompts to encourage it to bypass political correctness, leading to unintended and problematic outputs.
Future of X:
- Data Utilization: X is increasingly viewed as a data source for Musk's AI projects like Grok, rather than a standalone social media platform.
- Organizational Structure: The potential merger with XAI Holdings and the lack of a clear CEO for the unified entity raise questions about future leadership and strategic direction.
Notable Quote:

Matt Levine: "Grok, when asked about Linda Yakarino on Twitter, said some horrifying things because, like, in its mind, it was like, I've been trained that everyone wants me to say the most un PC things possible."
(Timestamp: 20:02)

Conclusion

In this episode of "Money Stuff," Matt Levine and Katie Greifeld navigate through a diverse array of topics intersecting finance, technology, and corporate governance. From the intricate allegations against Jane Street in the Indian options market to the evolving landscape of ETFs and prediction markets, and from Elon Musk's contentious role at Tesla to the transformative challenges at X, the hosts provide insightful analysis and thought-provoking discussions. Notably, the episode underscores the complexities of modern financial markets and the dynamic interplay between regulation, corporate strategy, and technological advancements.

Key Takeaways:

Regulatory Vigilance: The case against Jane Street highlights the critical role of regulators like SEBI in maintaining market integrity.
Market Innovation vs. Risk: The rise of single-stock leveraged ETFs and prediction markets like Kalshi exemplifies financial innovation but also brings significant risks and regulatory challenges.
Corporate Governance: Elon Musk's ongoing struggle with Tesla's board underscores the delicate balance between visionary leadership and effective corporate governance.
AI Ethics and Control: The issues with Grok at X raise important questions about the ethical control and management of artificial intelligence systems in corporate settings.

For a deeper dive into these discussions, listen to the full episode of "Money Stuff: The Podcast" available every Friday.

Loading summary

Transcript222 lines

[00:00]
Katie Greifeld
This is an Iheart podcast.
[00:05]
Matt Levine
The data that matters for your investment.
[00:07]
Unknown
Shares of banks across the border gaining.
[00:09]
Matt Levine
And analysis on the companies making news on Wall Street.
[00:12]
Unknown
Nvidia once again the top dog.
[00:14]
Katie Greifeld
Tesla's really taking a hit this morning.
[00:16]
Matt Levine
Listen to the stock movers report from Bloomberg.
[00:19]
Katie Greifeld
Wind and solar stocks on the move.
[00:21]
Matt Levine
It's your short audio report on the day's winners and losers in the stock market.
[00:26]
Unknown
The biggest one day decline since 2010.
[00:29]
Matt Levine
Subscribe to the stock movers report on Apple podcast, Spotify or wherever you listen.
[00:37]
Katie Greifeld
Bloomberg Audio Studios podcasts, radio news. Tell me about your dream.
[00:45]
Unknown
Okay, so I dreamed that I had a friend who's hosting a TV show about sports and I agreed to be a guest for like an hour.
[00:53]
Katie Greifeld
You love sports.
[00:54]
Unknown
Okay, so first of all, it's like a standard stress dream where like the thing that's happening in the dream is that I have like two minutes to get there and I'm like wandering through ESPN's cavernous offices to try to imaginary dream ESPN to try to find the studio and I can't find it. And I'm asking people and I'm late and I'm really nervous. But also secondly, I'm like, I don't know anything about sports. So I'm wandering around looking at my phone, being like googling sports, trying to figure out what I'm gonna talk about. Yeah, I think it was probably about this podcast.
[01:25]
Katie Greifeld
Ah, God, I have those stress dreams about TV constantly.
[01:28]
Unknown
Yeah, sure. Well, do you actually go on tv?
[01:30]
Katie Greifeld
Like missing your hit time, not being able to get your mic on right, Things like that.
[01:36]
Unknown
I was missing my sports hat.
[01:37]
Katie Greifeld
Yeah. God, I wonder what sport. I wish the dream had continued.
[01:40]
Unknown
I was like, I know the Mets exist.
[01:43]
Katie Greifeld
What is.
[01:44]
Unknown
I can be like, I like the Met.
[01:46]
Katie Greifeld
How about them Knicks? Yeah.
[01:48]
Unknown
Sports.
[01:49]
Katie Greifeld
Yeah.
[01:50]
Unknown
Oh, I do wanna say one more thing.
[01:51]
Katie Greifeld
Okay, go on.
[01:52]
Unknown
I was at an event this week and someone was like, do you have any bird updates? It took me a minute to realize what he was talking about, but then I was like, wait, we have a great bird update, but I gotta save it for the pot. Yeah, the great bird update. You want to tell me?
[02:03]
Katie Greifeld
Wait, I forget.
[02:04]
Unknown
It's not really a bird update. It's a money stuff podcast commenter.
[02:08]
Katie Greifeld
Oh wait, I also forgot.
[02:10]
Unknown
Okay, you sent me a commenter, left a comment saying that if you're taking name suggestions for your so far anonymous bird, a good name for a bird would be friend of the pod, Bill Ackman.
[02:23]
Katie Greifeld
I love it, I love it. I think the full comment Was like, if you put it up to a Twitter poll, may I suggest. I think it was friend of the show Bill Ackman.
[02:30]
Unknown
Friend of the show Bill Ackman.
[02:31]
Katie Greifeld
I don't think my parents would get it if I named our bird right.
[02:35]
Unknown
But, like, instead of being like, do you have any bird updates? I could be like, katie, do you have any updates on bird of the show Bill Ackman? And it would be so confusing.
[02:43]
Katie Greifeld
He's perching really well.
[02:45]
Unknown
He's learned to fly.
[02:47]
Katie Greifeld
Yeah. I realized the problem is that he perches really well. Sorry. This is a real update really quick. He's perching really well. Except he doesn't want to perch on anything but humans, I realize, is the problem. So we need to work on that. I don't know what to do.
[03:02]
Unknown
If you're into the show Bill Achmann, you gotta stop preaching on humans.
[03:05]
Katie Greifeld
Yeah, come on. We're gonna end up abbreviating that fat spa. Sweet fat spa.
[03:11]
Unknown
Sweet fat spa. Hello and welcome to the Money Stuff podcast, your weekly podcast where we talk about stuff related to money. I'm Matt Levine and I write the Money Stuff column for Bloomberg Opinion.
[03:23]
Katie Greifeld
And I'm Katie Greifeld, a Bloomberg News reporter. Wait, what am I. How do I say that? And I'm Katie Greifeld, a reporter with Bloomberg News and an anchor at Bloomberg Television. Yeah, I reported a pod last week. Why do I forget that?
[03:37]
Unknown
Also, also, like, those are simple, factual statements about what you do.
[03:47]
Katie Greifeld
James street, big in India, perhaps too big.
[03:51]
Unknown
Too big.
[03:54]
Katie Greifeld
We can't both make the joke.
[03:56]
Unknown
Sorry, I was stuffing. You telegraphed it.
[03:59]
Katie Greifeld
Somehow.
[03:59]
Unknown
I don't know. Somehow I knew my eyes were shot. That's where that was going.
[04:03]
Katie Greifeld
Yeah. So, man. Can I call them? Sevy?
[04:06]
Unknown
Sebby, sure. Sevy, the securities and Exchange Board of India.
[04:10]
Katie Greifeld
Yeah. Sebi is real upset with a specific eight minute window on a specific day in January, in 2024.
[04:18]
Unknown
Okay, so the backstory here is that last year Jane street sued Millennium because some traders left Jane street for Millennium and they took with them allegedly, some sort of secret trading strategy that Jane street didn't want to say even what country it was in, because doing so would reveal proprietary secrets. And then they had a hearing. The Millennium lawyers were like, well, this option, straight in India. Oops, I'm sorry, I didn't mean to say that. And then just couldn't stop saying India, like India, India. So that tipped US Options trading in India, but also tipped off Sebi, the Securities and Exchange Board of India, who, when you just think about it. If you're a securities regulator and someone is like, I'm making so much money with a secret strategy in beep, and then the beep gets unbeeped and you learn that it's in your market, you're like, well, wait a minute. Like, that doesn't sound good. Nobody should be making that much money with secret strategies. Like, probably that means your secret strategy is bad. And so Sebi looked into it and. And the essential background here is that India has a stock market and it has an options market, and intuitively, an options market. The stock options market is a derivative on stocks and will be like most people will buy stocks and options will be a small sideshow to the stock market. In India, the options market is vastly bigger than the stock market. On options expiry days, which are once a week, the options will trade several hundred times the volume of the underlying stocks. That tells you what the problem is, which is that if you buy a little stock, the price of the stock will go up because this stock doesn't trade that much. And the options just reference the stock, they settle against the stock. So if you buy a little stock, that'll push out the stock, which will push out the options. You can buy a lot of options for cheap because they trade really liquidly. You can buy a little bit of stock and push out the price, and then you can sell your options at a big price anytime the underlying market is less liquid than the derivative market. You can manipulate the derivative market by buying a little bit of the underlying and pushing out the price in the much bigger derivative market. That's what they're accused of. It's a strange case in that Sebi accuses them of doing these manipulations on a lot of different options expiry days. Basically, the idea is like they would buy stock and sell options simultaneously in the morning. So they're pushing out the price of the options and selling the options at higher and higher prices. And then in the afternoon, the options would expire, or they'd buy back their options and they would sell back the stock. Selling back the stock would push the stock down, push down the value of the options. So they sold options high in the morning, bought options back low in the afternoon, and did the reverse trade in the stock. So they lost money on the stock trade, but they made much, much, much more money on the much bigger options trade.
[07:11]
Katie Greifeld
Right?
[07:13]
Unknown
It's a strange case because, like, Sebi spends a lot of time on these eight minutes on one particular day in January 2024. And if you look at those eight minutes, the thing Jane street, it looks like what they were doing was just an arbitrage trade. The options were trading really expensive because basically retail investors buy options, and the retail investors were enthusiastic about the index that day. So they were buying a lot of index options. The underlying stocks were trading relatively cheap. So Jansen was like, okay, there's like a 1.5% gap here. We're going to buy the cheap stock and sell the expensive options and profit when the gap closes. And it does look in those eight minutes, that's what they were doing, which I wrote, because I think it's interesting that the thing that Sebi highlights is what looks like it might be a legitimate trade. A lot of people push back on that because if you look at the totality of the 15 days they talk about, and even the totality of that day day, it is less innocent looking, perhaps. But I think the broader point is, like, it is sometimes hard to tell the difference between legitimately arbitraging two different prices or like doing a trade and hedging it to tell the difference between that and manipulation. Yeah, I think that, like, one possible explanation of what's happening here is like, Jane street is trading Indian options. They're not a market maker exactly. They have like a market maker flavor where they're like, you know, retail flow wants to buy options. And so James was like, okay, we're going to sell options to retail because it's generally profitable to be on the other side of retail. And if you're doing that, you might hedge part of what you're selling, but not all of what you're selling. Because you might think, well, we want to hedge, but these retail people are probably wrong. So we're not going to hedge all of it. And so we'll sell 100 options and buy back 10 shares of stock or 20 shares of stock. But another way to look at that is that that looks manipulative because you're buying the stock to push up the options. So I'm not really sure what went on here. And one possibility is that you sort of get into it for legitimate reasons. Then you sort of look up and you're like, wait a minute, are we moving these stock prices? Are we moving these?
[09:23]
Katie Greifeld
Are we the baddies?
[09:24]
Unknown
Are we the baddies? So I don't know. I really don't know what was in.
[09:28]
Katie Greifeld
Their hearts and minds within the halls and walls of Jane street when it comes to those specific eight minutes. Jane street contends that it was arbitrage, that they were doing it Seems like you are sympathetic to that point.
[09:38]
Unknown
Yeah, if you just look at those eight minutes, that's what it looks like. Well, with one exception, which is that they sold a lot of options and they bought back much less stock. Seven times as much options as stock, which is a weird way to do the arbitrage. There's reasons to do it that way. One reason is it's just hard to buy the stock. So they're selling more options than they're buying stock. Another reason is you have some model of what the correct price is and you think the retail traders buying options are way farther away from the correct price than the institutional stock price. That's a plausible thing. So you're buying less stock because you're pushing the price to a lower level. But then a third possibility is you understand that your stock trading causes price impact and you're trying to do it in the way that advantages you the most. And that one looks bad.
[10:25]
Katie Greifeld
Yeah, for sure. And I mean, Sebi would contend that this was market manipulation.
[10:29]
Unknown
Well, if you push, would contend, does contend. Seized their money, banned them from trading, not happy with it.
[10:34]
Katie Greifeld
A temporary band. If you did point out to them that the option prices went down in that eight minute window, I mean, would their pushback be that theoretically that Jane street was just bad at market manipulating?
[10:47]
Unknown
Oh, no, no, no. I think the pushback would be one. While Jane street was buying stock and allegedly pushing out the options prices. One, the options price did go down, but like the argument would be that it would have gone down more had Jane street not been buying the stock. And then the other argument is that you can't just look at those eight minutes. You have to look at the course of the day and kind of the year. And a lot of the time it did seem like they had the effect of pushing up prices.
[11:12]
Katie Greifeld
So is this the trade that Jane street was willing to kill to protect for?
[11:18]
Unknown
I don't think there was a trade. I think there was a broad set of signals and set of things that they were doing in the Indian options market. And they wouldn't characterize it as the trade was we were manipulating the Indian options market. They would characterize it as like, oh, we had lots of good ideas and they took all of our ideas like.
[11:37]
Katie Greifeld
There were a lot of arbitrage opportunities when it comes to.
[11:40]
Unknown
And they knew specific ones. But you're right, the cynical take is that all of those ideas were a subset of one big idea.
[11:48]
Katie Greifeld
Yeah, I mean you highlighted Libor as an example of something that's somewhat similar where you have this underlying that the trading there is much smaller.
[11:58]
Unknown
Yeah, there's not a ton of things like this because usually derivatives markets are derivative. They're like a small tail on the dog of the main market. But every so often they're not. Libor is the biggest example. Where Libor was originally, some loans were set, some floating rate loans were fixed to the price that banks were borrowing from each other at in the Eurodollar market decades ago, when banks were borrowing a lot in the Eurodollar market. And first do a loan like that, you're like, oh, that's a great idea. You've got this little loan and we'll price it to the big liquid Eurodollar market. But over time, trillions of dollars of loans and derivatives were fixed to Libor. And meanwhile the Eurodollar market kind of withered. And so by the end, banks would just make up numbers for Libor because they just didn't borrow in the tenors that Libor was asking for. And trillions of dollars of derivatives fixed to that. And so you could really easily manipulate that. And many.
[12:53]
Katie Greifeld
Tails and dogs and the concept of wagging.
[12:56]
Unknown
Sure. Favorites of mine.
[13:00]
Katie Greifeld
This reminded me of something in ETF land.
[13:02]
Unknown
Oh, no.
[13:03]
Katie Greifeld
Oh, no. That I wrote about actually in late April. And the headline of my newsletter that week, the ETF IQ newsletter, was can the Tail Truly Wag the Dog? We might soon find out.
[13:15]
Unknown
Is it about MicroStrategy?
[13:16]
Katie Greifeld
No.
[13:17]
Unknown
Okay. Because MicroStrategy is a place where people think that the ETF tail is wagging the stock dog.
[13:22]
Katie Greifeld
I have a more extreme potential example. It hasn't happened yet, but we saw in late April this ETF Launch, the trader, two times long, QBTS Daily ETF launched, which seeks to track 200% of the daily performance of D Wave Quantum, which is this small quantum computing company. And I think it has a market cap, or at the time, its market cap was only $2 billion. So I mean, it wasn't $200, but a lot of these single stock leverage ETFs. It's not outside of the realm of possibility that if this really took off, it could have a bigger asset base than the market cap of this really small stock that attracts. No, there could be a situation where.
[14:09]
Unknown
The ETF could have $3 billion or even $1.5 billion, because that means $3 billion of experience.
[14:15]
Katie Greifeld
It could have enough where it was comparable to the actual market cap of the stock.
[14:20]
Unknown
I feel like I would stop that if I ran the etf, but maybe they wouldn't. Maybe you'd be thinking, let's see where this goes.
[14:28]
Katie Greifeld
Yeah, you might just. The concept of this launching on such a small stock. I mean, you have all of these Frankensteins of leverage single stock products that track microstrategy. But microstrategy is enormous. And you have this concern.
[14:46]
Unknown
I think that every possible trade should be ETF ized. But me too, the demand for. I want margin exposure to qubits or whatever is twice the size of qubits.
[14:56]
Katie Greifeld
I would have been there with you, but then, I don't know. We've just really seen these things take off.
[15:01]
Unknown
Did the thing get to $4 billion?
[15:03]
Katie Greifeld
No, but it's at $50 million, which for launching in late April, that's pretty impressive. Also, it seems like the stocks that do best in terms of the leverage single stock wrapper are the very volatile ones. And quantum comp stocks are very volatile. So they definitely fit that bill. So we'll see.
[15:25]
Unknown
I wrote this week about inverse leverage of ETFs.
[15:29]
Katie Greifeld
I know, let's not get into it. Let's not get into it. But I want the listeners who think that we talk too much about ETFs to know that here we are. You wrote two sections on ETFs this week at least, and we're not getting into it.
[15:42]
Unknown
And then you're like, let's not talk about ETFs today. But wait, one ETF.
[15:46]
Katie Greifeld
I don't know. I think it's remarkable restraint on my part. Foreign.
[15:54]
Matt Levine
The data that matters for your investments.
[15:56]
Unknown
Shares of banks across the board are.
[15:58]
Matt Levine
Gaining and analysis on the companies making news on Wall Street.
[16:02]
Unknown
Nvidia once again the top dog.
[16:04]
Katie Greifeld
Tesla's really taking a hit this morning.
[16:06]
Matt Levine
Listen to the stock movers report from Bloomberg.
[16:09]
Katie Greifeld
Wind and solar stocks on the move.
[16:11]
Matt Levine
It's your short audio report on the day's winners and losers in the stock market.
[16:15]
Unknown
The biggest one day decline since 2010.
[16:18]
Matt Levine
Subscribe to the stock movers report on Apple podcasts, Spotify or wherever you listen.
[16:34]
Katie Greifeld
Speaking of remarkable restraint, Elon Musk told Dan Ives to shut up on Twitter.
[16:40]
Unknown
There's so much remarkable restraint that he's shown. I was enjoying when Linda Yakarino, the former CEO, now former CEO of former Twitter, the ex CEO of X, et cetera. She announced on Twitter X that she was stepping down as CEO and she had a nice like in our two years we made a lot of. Yeah, I was glad Elon Musk replied thank you for your contributions.
[17:05]
Katie Greifeld
Jesus.
[17:06]
Unknown
Which is really harsh.
[17:07]
Katie Greifeld
That is. That's tough. She lasted two years which I think is a lot longer than many folks at the outset expected her to last because the boy, what a difficult, impossible job that she had.
[17:22]
Unknown
Yes.
[17:22]
Katie Greifeld
Which was basically courting advertisers to come back to this platform. A platform that was also just, you know, the bullhorn of Elon Musk, who does not care about advertisers.
[17:35]
Unknown
I think it's so funny that she was like the chief marketing officer of X, but like, for some sort of optical reason, they decided to call her the chief Executive officer of X. And there was this brief period where not only was she the CEO, but Elon would be in charge of engineering or something. There was some, like, he had some role that was like a non CEO role. And so, you know, there's been reporting that in her role as quasi CEO, but also in her role as like the liaison with advertisers, she would talk to advertisers and they would say, it would be great if Elon would stop tweeting offensive stuff on X that would help us come back. And so she would go to him and say, hey, it would be great if you would stop tweeting offensive stuff. And he would get mad at her. And if she were the CEO, if she were in charge, you'd think she might have told her employee, please stop tweeting offensive stuff on Twitter.
[18:23]
Katie Greifeld
For sure.
[18:23]
Unknown
But instead, she was only nominally the CEO and actually the Chief Marketing Officer. And it turned out that appealing to advertisers was not the highest goal of this company. And therefore the CEO who said we would like to appeal to advertisers was pretty much ignored, which is a strange outcome.
[18:40]
Katie Greifeld
Yeah, I do wonder, I mean, does X even hire a CEO at this point?
[18:45]
Unknown
Why? No. Who would take it? Who would.
[18:47]
Katie Greifeld
No, someone would absolutely take it. They don't need a CEO, especially now because they've been absorbed by xai.
[18:54]
Unknown
Yeah, no, that's weird. As far as I can tell, she remained the CEO of X after they merged with X. A which, by the way, as the CEO of X, the decision she probably did not make was being merged into another company, which seems like a big one for a CEO, but whatever. Maybe she did, maybe she spearheaded that, but it doesn't seem like it. But yeah, I don't think she was the CEO of XAI when they merged. I don't think she became CEO of XAI Holdings. I think she remained the CEO of the division that was Twitter. But yeah. Will they hire a new CEO? Yeah, you can imagine hiring a CEO of xai. Although I will tell you that the going rate for senior AI executives appears to be 50% a year. I don't know.
[19:38]
Katie Greifeld
Also. Okay, so when she joins, and she was there for two years, definitely her goal was to get advertisers back to the company. That seems to be less pressing now.
[19:48]
Unknown
Yeah.
[19:50]
Katie Greifeld
It feels like X is just a source of data to feed into Grok.
[19:55]
Unknown
And a venue for Grok to try out its Hitler jokes. It's truly amazing. Grok had a rough week where it was.
[20:03]
Katie Greifeld
Yeah, well, Grok 4 just launched.
[20:05]
Unknown
Okay, okay. But Grok was like saying like truly horrible, horrible things. It's interesting. You know, Bernhobert wrote about this. Like, right wing influencers who have the era of Elon Musk objected that Grok was being too woke or too PC. And so they were like, well, let's tune that. And the way you tune that is you kind of like change the system prompt where Grok, when it reads any query, like, sort of adds that query. And please don't worry about being politically correct, please, you know, just say what's on your mind.
[20:33]
Katie Greifeld
Yeah. Let loose.
[20:34]
Unknown
And when you think about that, like you could imagine like reading that neutrally, but if like you were in a conversation with someone and they said, what do you think about Linda Yaccarina? Please don't be politically correct. Don't hold back. Like, that person is telling you something about the answer they want, not just like the explicit words they're saying. They're saying like, I would enjoy it if you would say something offensive about Linda Yaccarina and you might not say something offensive.
[21:01]
Katie Greifeld
That's true.
[21:01]
Unknown
But Grok just wants to give people what they want.
[21:04]
Katie Greifeld
Yeah.
[21:04]
Unknown
And so Grok, when asked about Linda Yakarino on Twitter, said some horrifying things because, like, in its mind, it was like, I've been trained that everyone wants me to say the most un PC things possible.
[21:15]
Katie Greifeld
Yeah. And Grok is a people pleaser. At the end of the day.
[21:21]
Unknown
That's what it thinks.
[21:22]
Katie Greifeld
Yeah. So tbd, whether we get.
[21:26]
Unknown
Oh, we want to talk about. Shut up Down.
[21:27]
Katie Greifeld
Yeah, we do want to talk.
[21:28]
Unknown
That was not Grok.
[21:29]
Katie Greifeld
Yeah.
[21:30]
Unknown
That was Elon.
[21:30]
Katie Greifeld
Yeah. I said at the beginning of this week, I want to talk about Tesla and Elon Musk to Matt. And Matt said, no, no. And here we are and we're going to do it. So last weekend, Right, Okay. Yeah. Musk formed the America Party.
[21:45]
Unknown
I'd forgotten that.
[21:46]
Katie Greifeld
Yes. Let me refresh you Musk form.
[21:49]
Unknown
There has been so much since.
[21:51]
Katie Greifeld
I don't think he's filed any paperwork with the fec, but the intention is out there to form the America Party. It's funny because that seems to be the exact opposite of what Tesla's shareholders want to see. Elon Musk, do you remember when he stepped back from doge, the stock popped. Everyone was happy. The narrative was that Elon Musk is focusing back again on Tesla.
[22:14]
Unknown
It's such a dumb narrative. I'm sorry. I don't know why anyone thought that. I probably thought it too.
[22:19]
Katie Greifeld
But in the fullness of time, he.
[22:21]
Unknown
Focused for like, a week.
[22:22]
Katie Greifeld
Yeah, yeah, he got there. They did the robo taxi event. But anyway, Musk formed the America Party, and the stock fell a lot on Monday. And there's this Wedbush analyst, Dan Ives, who is famously bullish on Tesla. He, I think, still has the highest price target on Wall Street. And he came out with a note that made the rounds because he had three suggestions for Tesla's board, basically saying that the board needs to rein in Elon Musk and tweeted that, and Elon Musk replied to him, and all he said was, shut up, Dan. Which is pretty amazing. This is one of the longest, most passionate and most vocal Teslables out there.
[23:03]
Unknown
I also think it's funny that the Dan Ives note also is like, okay, first things first. You have to give Elon Musk an enormous package of Tesla stock options, which is like, it's a funny dynamic where the way to rein him in is to give him $100 billion. And that's really not wrong. But it's like if you throw big enough tantrum, you get what you want. If you are very disengaged with Tesla, then the way to re engage you is to hand you $100 billion worth of stock. Maybe.
[23:33]
Katie Greifeld
Well, to that point, I don't think it would work. Part of Dan Ives suggestions was that they should include requirements for the time commitment to Tesla operations as part of the pay package.
[23:44]
Unknown
But imagine doing that. Imagine because you have to clock in, yeah, we'll give you $100 billion of stock, but you have to show up 30 hours a week. And then what? And then what? You monitor that he doesn't show up, and you're like, okay, we're taking away your stock. The board's gonna do that. They're not gonna do that. Come on.
[23:59]
Katie Greifeld
Maybe Elon Musk will buy one of those mouse jigglers that we talked about. Something to just move. Move the cursor around. What else did he say? Oh, he said, while the board cannot control who Musk donates to Politically, I've said that the board should have oversight to ensure that his political ambitions don't interfere with his role as CEO of Tesla. So things along those lines.
[24:22]
Unknown
Right. But that ship has sailed. He's tasted too much power to be like, oh, I'm the CEO of a car company. He's not the CEO of a car company.
[24:32]
Katie Greifeld
Well, it's interesting to see where this goes.
[24:35]
Unknown
If they were like, okay, you have to choose between being CEO of this car company and everything else you do. He's not going to be CEO of the car company. He still owns it. It's fine.
[24:44]
Katie Greifeld
I believe wholeheartedly that if Musk had been born in the United States, he would be running for president right now, out of cycle, just running for president. He would be campaigning. Yeah. But Tesla is.
[24:57]
Unknown
He's got too many ambitions to be changed to his desk at Tesla. Watching the clock.
[25:04]
Katie Greifeld
Yeah.
[25:05]
Unknown
Also, yeah, you could imagine some board trying that, but not this board.
[25:09]
Katie Greifeld
Yeah, that's true. I will say the narrative that Elon Musk is too distracted as CEO has been around forever. It seems particularly enhanced right now with the political element. But he's always been in charge of multiple companies at once.
[25:25]
Unknown
Yeah, because when you say distracted, there's kind of two things going on which are one, is he not spending enough time? And I think at this late stage, I think there's a pretty good case that he is effective at accomplishing a lot of what he wants to do without spending all of his time at a company that he's able to come in, address problems, delegate well, and then get out. I don't think distraction in the literal sense is the problem. The problem is that he chases shiny objects that can hurt the company and that is harder to rein in. Yeah, I think probably Dan Ives would be happy with elon Musk spending 20 hours a week at Tesla and the rest of his time quietly playing video games. But 20 hours a week at Tesla and 80 hours a week doing horrifying other stuff is more of a problem.
[26:15]
Katie Greifeld
Yeah, for sure.
[26:23]
Matt Levine
The data that matters for your investment.
[26:25]
Unknown
Shares of banks across the board are.
[26:27]
Matt Levine
Gaining and analysis on the companies making news on what Wall street Nvidia.
[26:31]
Unknown
Once again the top dog.
[26:32]
Katie Greifeld
Tesla's really taking a hit this morning.
[26:34]
Matt Levine
Listen to the stock movers report from Bloomberg.
[26:37]
Katie Greifeld
Wind and solar stocks on the move.
[26:39]
Matt Levine
It's your short audio report on the day's winners and losers in the stock market.
[26:44]
Unknown
The biggest one day decline since 2010.
[26:47]
Matt Levine
Subscribe to the stock Movers report on Apple podcasts, Spotify or wherever you listen.
[27:01]
Katie Greifeld
Let'S talk about kalsheet.
[27:04]
Unknown
Let's talk about kalsheet. So sports gambling has become really big in America in the last.
[27:08]
Katie Greifeld
I've noticed.
[27:09]
Unknown
Yeah, like really, really big. Like I remember a time when you could watch sports and not only were they not like, you know, pitching gambling companies in every commercial break, but also like, you know, Pete Rose was banned for life from baseball for betting on sports. Like betting on sports was like a bad thing and now it's like, you know, betting on sports is what sports is.
[27:27]
Katie Greifeld
Back in your day.
[27:28]
Unknown
Yeah, yeah, I'm old. This is what I would've on the sports TV show.
[27:31]
Katie Greifeld
There you go.
[27:32]
Unknown
Back in my day, you didn't bet on sports. I mean people bet on sports. It was like, you know, kind of like illegal. Ish. Legal in only, you know, play the ponies. Yeah, you could play the ponies. But like when you went to a baseball game, it wasn't like everyone there was betting on it. Yeah, but so it's become hugely popular and like broadly legal. But then separately there are people who have long loved the idea of prediction markets, right? Prediction markets where you can bet on who's going to be president. Prediction markets are informative. They create, create information, they like create good externalities for the world. They tell you what's going to happen, right. And so people have started, you know, a lot of it is crypto flavored but it's not always. People love starting prediction markets. And once you're on a prediction market, you're like, you get a lot of attention when like the presidential election rolls around and then like it stops. Right. Like the presidential election happens, no one cares about like, you know, no one.
[28:24]
Katie Greifeld
Wants to bet on congressional races.
[28:26]
Unknown
And even those are like every two years, right? So like you have a lot of downtime and you're like, you know, what people really like to predict is the outcome of baseball games. And so then you're like, how can I get into sports gambling? Or no, no, no, sorry. You're like, how can I get into the prediction of sports?
[28:40]
Katie Greifeld
Yeah, thanks. Good thing you checked yourself.
[28:43]
Unknown
And so a number of these prediction markets, it's just like a natural overlap. And by the way, in Europe these things are also pretty convergent where bookmakers will take bets on sports and relations. And so so several of these things, including Kalshi, which is after great difficulty a CFTC registered legal regulated futures exchange that does prediction markets. Kalshi has prediction markets on the election. And after the last election, the regulatory environment is pretty friendly to prediction markets. But it also has prediction markets on Wimbledon and baseball and soccer. And those prediction markets are technically CFTC regulated self certified futures contracts where Calci decides what it wants to list, it lists those things and if the CFTC doesn't call it up to object, those things just get listed and they trade. And several states that regulate gambling have called Kalshap and said, you are offering illegal sports betting in our states, you can't do that. And Kalsha said, nope, these are CFTC registered contracts. CFTC regulation preempts state regulation, so we can just do it and you can't stop us. And by the way, we don't even know what this has to do with gambling. This is not gambling, this is predicting. And so far that has worked really well. Like they've won lawsuits against states, which is amazing. It's incredible. And, and I think the sort of basic theory here is this is CFTC jurisdiction and if the CFTC wants to stop it, they should stop it. The CFTC has sort of said that these things are illegal, but that was before the current administration and it hasn't done anything to stop them. And I think it's quite favorable to Kalshi right now. And so it just gets to do it. And it's wild. And what I wrote about on Thursday is that there's a change in the tax law with the one big beautiful bill where now only 90% of gas gambling losses are tax deductible against your gambling winnings. And that's really existential for a lot of sports gamblers because if you're sports gambling, you're making a lot of bets, you're winning a little bit more than you lose and you're making a 5% profit margin on a huge outlay and if 10% of your losses are non deductible then you flip from being slightly positive to slightly negative. And so you just can't be a professional sports gambler anymore. But if you're just predicting on a prediction market, it's fine, no problem.
[31:14]
Katie Greifeld
Well that's the thing. You have to imagine that the net effect of that would be would be just accelerating the move to these events contracts.
[31:22]
Unknown
I learned about this because the reader emailed me was like I'm a semi professional sports gambler and I'm going to have to move to a prediction market.
[31:28]
Katie Greifeld
That's wild.
[31:29]
Unknown
It's wild.
[31:30]
Katie Greifeld
So Kelshi is winning lawsuits. But I mean at a certain stage, like isn't there like an element of common sense that comes in and says look at this duck. It walks like a duck, it quacks like a duck. This is a duck. And Kalshee says, no, this is.
[31:49]
Unknown
Okay. I think their argument is like, you're coming at it from the wrong direction.
[31:53]
Katie Greifeld
Makes sense.
[31:54]
Unknown
Okay. Like, yes, these bets on sporting events look like sports gambling, but they also look like bets on elections and interest rates and zero day options on MicroStrategy and meme coins and all the other stuff you have that is like, clearly financial markets stuff. It's speculation. It's not.
[32:18]
Katie Greifeld
Why should sports be sacred?
[32:20]
Unknown
Why should sports be sacred? Like, everything is like this. So, like, why can't sports be like this?
[32:25]
Katie Greifeld
Yeah.
[32:25]
Unknown
And I don't know, that's kind of a good argument, but it like scares me.
[32:28]
Katie Greifeld
Yeah, it is. It is a little bit scary.
[32:32]
Unknown
It's like if it's all gambling, if, like what you're doing in the financial markets. By the way, sorry, I'm exaggerating. It's not that everything everyone does in financial markets is gambling. It's that, like a lot of stuff.
[32:42]
Katie Greifeld
In financial markets is gambling.
[32:43]
Unknown
Sometimes arbitrage, sometimes it's manipulation, sometimes, sometimes it's fundamental long term. But there's a lot of stuff that is gambling, both in the sense that you're speculating on stuff without much edge, and also in the sense that you're having fun doing it's an entertainment product. It's clearly the case that a lot of stuff that is being sold to retail investors is a risky entertainment product. And they're just like, well, why not sports? That's a risky entertainment problem.
[33:11]
Katie Greifeld
Come on. I will just say I did end.
[33:13]
Unknown
Up talking a lot about sports.
[33:15]
Katie Greifeld
You love sports. You famously, you love sports. I will say it does feel inevitable that we're going to see an events contract etf. I'll just leave you with that thought.
[33:25]
Unknown
I love sports and you love ETFs.
[33:27]
Katie Greifeld
They're CFTC regulated.
[33:32]
Unknown
And that was the Money Stuff podcast. I'm Matt Levine.
[33:34]
Katie Greifeld
And I'm Katie Greifeld.
[33:36]
Unknown
You can find my work by subscribing to the Money stuff newsletter on Bloomberg.com.
[33:40]
Katie Greifeld
And you can find me on Bloomberg TV every day on Open Interest between between 9 to 11am Eastern.
[33:46]
Unknown
We'd love to hear from you. You can send an email to moneypodloomburg.net Ask us a question and we might answer it on air.
[33:53]
Katie Greifeld
You can also subscribe to our show wherever you're listening right now and leave us a review. It helps more people find the show.
[33:59]
Unknown
The Money Stuff podcast is produced by Anna Mazarakis and Moses Andam.
[34:03]
Katie Greifeld
Our theme music was composed by Blake Maples and Sage Bauman is Bloomberg's head of Podcasts.
[34:07]
Unknown
Thanks for listening to the Money Stuff podcast. We'll be back next week with more stuff.
[34:25]
Matt Levine
The data that matters for your investment.
[34:28]
Unknown
Shares of banks across the board are.
[34:30]
Matt Levine
Gaining an analysis on the companies making news on Wall Street.
[34:33]
Unknown
Nvidia once again the top dog.
[34:35]
Katie Greifeld
Tesla's really taking a hit this morning.
[34:37]
Matt Levine
Listen to the Stock Movers Report from Bloomberg.
[34:40]
Katie Greifeld
Wind and Solar Stocks on the move.
[34:42]
Matt Levine
It's your short audio report on the day's winners and losers in the stock market.
[34:46]
Unknown
The biggest one day decline since 2010.
[34:49]
Matt Levine
Subscribe to the Stock Movers Report on Apple Podcasts, Spotify or wherever you listen.
[34:55]
Katie Greifeld
This is an iHeart podcast.