Animal Spirits Podcast - Talk Your Book: Autocallable Income

Episode Date: July 7, 2025

On this episode of Animal Spirits: Talk Your Book, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠��� are joined by Matt Kaufman, Senior Vice President and Head of ETFs at Calamos to discuss the Calamos Autocallable Income ETF (CAIE), a first-of-its-kind fund bringing institutional-style structured notes to the ETF world. They explore what makes CAIE structurally unique compared to traditional autocallable notes, including how its laddered structure offers investors a differentiated income strategy. Find complete show notes on our blogs... Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation. Check out the latest in financial blogger fashion at The Compound shop: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://idontshop.com⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your Book is brought to you by Calamos. Go to calamos.com to learn more about their brand new Calamos auto-callable income ETF. It's ticker C-A-I-E, Calamos.com to learn more. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion, and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only

and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, I got to be honest. A lot of times when we have these talk your book segments, sometimes we'll do a little bit of research, but most of the time, if I've never heard of a strategy,

I want to go in kind of blind because I want it to seem like we're going to do it live. Yeah, well, I want to, I want to, us to be the eyes and the ears of the audience in terms of learning. And a lot of times we're learning on the fly. And sometimes it's because these strategies are all so new. I've got to be honest. I didn't know what an auto callable was coming into this. Did you? I did, only because of our previous dive down this rabbit hole.

Okay. Just not something that I'm completely familiar with as we move these like structured note products. into the ETF sphere. And a lot of the structured note stuff that we've talked about in the past is more low octane, right? We're putting guardrails, so the downside is defined,

but it also caps your upside. You have certain levels you pick. But there are also ways in the structured note arena to have a little bit more juice and more volatility. And so I'd say this is one of those types of strategies, right? isn't the other ones where your downside and upside are capped. It's like there's higher income

and with that higher income comes more volatility. One of the things that we're trying to do on this show is to make sure for every investment that we speak to, especially if it's a new category like these auto callables, these structured notes inside of an ETF wrapper, is do our best to ask the questions that you would ask, because with everything, especially income products, I think people get enamored with the sticker yield. And, you know, that's about as far as their diligence goes. Right. As long as I get the income, I'm fine. I don't care what else happens. Yeah. So you have to understand that no free lunch exists in the world of investing. And if you're getting X. You might give up a sum of Y. And so this was a very interesting conversation.

I suspect it is going to be a popular category among advisors and their clients because this is the easy button for structure notes for turning for turning price total return into income, which we know people, people love. So something in the water these days. But it seems to be a structural shift. I don't think it's going to be slowing down anytime soon. Is that a play on words there, structural shift? But the thing, I mean, the biggest question you ask here is what's the tradeoff, right? I'm getting this yield. What am I giving up or what are the risks?

And the great thing about the people we talked to on this show is that they're always willing to go, because you're right, there is no free lunch. So we talked to Matt Kaufman from Calamos again. He's a senior vice president ahead of ETS. We've talked to him before. And he does a really good job of looking at both sides. The pros and the cons, the tradeoffs, here's what you get, but here's what you're giving up to get this. And here's the potential landmines and all that stuff. So we get into all that with the new Calamos, auto callable, income ETF.

It's ticker CAAE. So here's our talk with Matt Kaufman from Calamos. Matt, welcome back to the show. Michael, thanks for having me. All right, the big trend, or one of the big trends in ETF land, as Matt Levine has been writing about, is that anything that can be ETFed will be ETFed. and the product that we're going to be talking about today is the perfect example of the evolution inside of this magical wrapper.

Today we're talking about the Calamos, autocallible income ETF. And this is a very interesting product. Ben and I did a cursory look over this and said, you know what? Saving it for the show. I want to come and clean. So here we go. Matt, what's the story? No, I appreciate that.

I think there's a question of can and should on the ETF side. You know, anything, anything that is liquid and can be developed in, I would say, a structured note type wrapper can be very efficiently delivered in ETFs. And so that's what we're doing here. If you follow the derivative income space, there is a massive derivative income revolution happening inside ETFs. You've seen JEPB, JEPQ, everybody's talking about that. Those are all large covered call strategies.

They're derivative income strategies. They make up $115 billion in the ETF space. Whoa. If you go over- Jeffey's still the largest active fund, right? Which is crazy. Yes, exactly. That income fund is that large.

It's a derivative income fund. If you go over to the structured note world, it's no different. Derivative income still dominates, but it's dominated by a strategy called auto-callable. And an auto callable is essentially a yield note that pays a coupon tied to an equity reference index. So most structured products do that. They give you something based off the performance of something else. So they give you a coupon. They give you performance.

You look at other types of structured products like buffers or principal protected notes. They give you an outcome based off the performance of an underlying equity index. Mike, could we just pause here for one second? Yes. So when you say they give you yield, so for example, an investor could say, okay, I want to buy the structure note. And let's say that we're using a basket of two indexes, the Russell, the S&P, whatever. And I'm going to have a 12-month maturity such that if neither of those are more than I'll make up a number 30 in a 30% drawdown at the time of maturity, I'm going to get a, again, making this up an 8% yield. Cool. That sounds like a fair tradeoff.

is that that's what you're talking about yeah i think i think you're jumping uh jumping pretty deep in the weeds there but the the headline is that you get a coupon based off the performance of an underlying index and so that coupon is stable so long as as you said the underlying index doesn't fall below a certain level so you're taking on that deep in the money tail risk in exchange for a high stable coupon payment so if you view the covered call strategies as buying protection or buying insurance, the reverse is true with an auto call. You become the insurance company. You are selling insurance in this instance. So you want to avoid the crash. You want to make sure that you're not getting into that deep, severe, sustained market to climb. But that's the tail risk

you're taking on. And there's $100 billion in the United States alone worth of people looking for that high income coupon tied to that equity market barrier. So it's a massive space. We are bringing that to the ETF market. We launched yesterday. There's a tremendous amount of feedback and positive reception already. It's been one day. We're seeing a ton of people have interest in this. Talk to one advisor yesterday who said, this is her words. This is the easy button for me. This is the auto call easy button. I usually have papers scattered all over my desk. I have to go shop for individual notes. Find the right one. I get called away in six months or so. And then I have to do it all over again. I have coupon reinvestment risk. I have maturity risk. I have timing risk.

All of my money is tied to a single point in time. We've solved all of that with this ETF. We have a laddered portfolio of auto calls. So you're diversifying your maturity risk, diversifying all of that timing risk out. And then we're tied to a single underlier, a single reference index that's been optimized for auto calls. So every time an auto call gets essentially called away inside the ETF, we just buy a new one in the latter. There's no more work for the advisor to do. They don't have to go shopping again. They can get all the paperwork off their desk. And it gives you a really simple, easy to implement ticker. So all these different structured note-like products that are now being turned into ETFs. Some of them, it's downside

some of them. It's like getting more upside. Some of them. It's putting, you know, guardrails and having a defined downside and defined upside. What is the return profile hope for this type of strategy? I love that question. Let's make a curve. So if you make a curve of all of the different defined outcome or called structured note profiles in the market, all the way at the top, you have levered exposure. Pro shares, they've got that covered. You know, there's other firms direction doing those types of levered exposures. You can get that in structured note form also. You go to the other end of the spectrum. You've got principal protected notes. We'll launched 100% capital protected ETFs about a year and a half ago, capturing that principal

protected note space or FIA, if you're familiar with insurance companies. So then in the middle, you've got buffers. You've got something less than 100% protection, not quite levered. The one space that has not been captured happens to be the largest. It's the auto callable market. It's very large all over the world. And it's the income category. People are hungry for income. You see it in derivative income ETFs, you see it in structured notes, and that space is essentially a very long-dated put replication strategy. You cannot go to the listed markets to build these, which is why we would partner with and collaborate with a counterparty like J.P. Morgan to then bring this into the ETF space. So it's a very clean structure. We've built an index with Mercube, one of the leading index providers in the country.

they have the index that has the lattered exposure to all of the autocalls, all referencing the Mercube, U.S. large cap, ball advantage index, long name. And that whole thing goes up into a point. We trade that price, that index on swap with JP Morgan. And so advisors and investors can get auto callable exposure to a diversified basket of autocalls all with a single trade. why do you think it took so long for this rapper to come to market? Because I am suspecting, I was not to say I'm afraid, I'm not afraid. I suspect that this is going to be a large success. I suspect that advisors are going to gobble this up on behalf of their clients. And of course, I want to make sure part of the reason why we do this show is that everybody understands

what they're getting into, the questions to ask, some of the potential risks involved that they might not be thinking about. But before we go, get into all of that stuff. Why did it take so long? Is there a bunch of complexity involved? Well, to use our same curve, that was involved in the IP for the buffered ETF space, which was replicating a buffered note. That was the best trade when interest rates were at zero. When interest rates are at zero, you cannot give someone 100% protection. You've got to do something less. So we built the buffered space, built that with ETFs. You can now deliver that into the market, tax efficiency, liquidity, all the good things. We're up the adopt.

curve on buffers. You know, I was at the Morning Star Conference, saw you guys there behind the glass, you know, doing your show. And it was, it was interesting because eight or nine years ago, we approached Morning Star and said, you know, you ought to have a buffer category. This is going to be big. They didn't necessarily agree with us at the time. They do now. There was a buffer ETF panel. There's a buffer ETF category in Morning Star. And now rates are higher. So now we can do the 100% principal protected space. That has been ETFed, if you will. We can capture that now. The next iteration is the auto callable space. You cannot replicate an auto callable precisely with flex options like you can do a principal protected or a buffered strategy.

You've got to go out and use swap. You've got to use a counterparty or some, you know, you could own notes. I think the most efficient way to do it is using swap. And so now we've got all the pieces in place to actually deliver this into the market. We have a reference index. We have an auto callable index that does all of the heavy lifting, all of the replication of the notes. We have JP Morgan as the swap counterparty. We're trading swap back and forth with them. Calamos is one of the largest alts managers in the country. So it took the collective efforts of all three of us over several years to be able to put this type of strategy into market. And you're just now seeing the pinpoint of the adoption curve with the launch yesterday. So we talk five years

so now, I think that these are going to be bigger than a lot of the other outcome-based categories we're seeing. Last point is I would not categorize these as defined outcomes or buffers. This is truly an auto-callable space that needs a name of its own. So this is something different? 100% different, yes. So if you're an advisor looking through these different strategies, like, how would you explain each of those buckets to your clients? Because that's the big thing is getting clients to understand and be okay with these things. Yeah, absolutely. So if you're, if you're familiar with auto calls, this is the easy button. There's a lot of financial advisors out there already using auto callables for their high net worth investors. They are seeing this as a

tremendous innovation, a way to give accessible, auto callable access to their clients. If you're If you're not familiar with auto callables, I think the easiest and simplest way to think about it is like a bond whose income and principle depend on the stock market not falling too far. So we want to make sure that people understand this. There's an education that needs to take place. You're taking on deep in the money tail risk. So the global financial crisis, those instances, you know, you would lose some of your principle in those notes that you'd be buying. But other than that, you know, you're getting that high stable coupon in exchange for taking on that deep in the market in the market tail risk there.

What does high stable income look like? If you look at the index that we're trading swap on right now, the coupon's about 14.7%. Whoa. Okay. And what? What's material? Yeah, what drives that? And on the low end, let's assume 14 is the high end. I think anything higher, frankly, I'd be a little bit suspicious. What about on the low end and what would cause it to go lower? Is it a falling stock market? Is it, interest rates? What is it? It's all the things that contribute to optionality. So if you understand options, we can keep it high level. You know, you have interest rates, you have dividend yield, you have volatility. So you mentioned a worst of. If you look historically

at the auto callable space came out just before the financial crisis. You know, Calamos is the largest convertible bond manager in the country. The original name of the auto callable came out as a reverse convertible. So if you're familiar with a convert, a convertible converts to a stock on the way up, well, reverse convert would convert to a stock on the way down. That was the first iteration of what's now known as the auto calls. As that space matured, they started to get into what you were mentioning a worst of strategy, where, okay, I'm going to give you a high coupon based off the worst performing of one of one or two or three assets like S&P, NASDAQ, or Russell. I don't know many people that, you know, actually like that idea of getting the worst of something,

but they take it because then you can get a high coupon for that. Well, the question is, what if you stabilize some of those parameters in the options? What if you stabilize volatility? So the reason people like those worst of is when one of those indexes has a vol event, goes down and vol spikes, they move in because they get a really high coupon and then they move a bunch of money in, try to capture that high coupon. What if you stabilize vol, around a high target. Now you can deliver that high coupon very consistently. And so that vol control is underlying the reference index that we're using with Mercube. That has been around for decades. Insurance companies have been doing volatility control for a long time. So as markets are

not risky, if the S&P 500 is low from a volatility perspective, your volatility is levered up a little bit. And then if VAL is very high, then VAL comes down to meet that VAL target. But what it results in is a very high, stable coupon, historically, you know, 11 to 14, 15%. So you have that high coupon. What does the underlying movement look like in between? And I'm curious, like, is this another one of those that you have to sort of hold for a year to get the actual outcome? Or is this a different? You don't have to do anything like that. This pays a monthly coupon. You can go to our website, calamos.com, go to the ETF page, C-A-I-E, and you'll be able to see, we give you tremendous transparency more than anybody has ever done on a structured note.

You can see exactly all of the underlying autocallables, what the coupons are, how many are you're paying a coupon, where they are relative to the maturity, the coupon barriers. It's all right there. And you can see right now that the index we're trading swap on is a 14.7% coupon. Every one of those auto calls is paying that coupon. It's a monthly distribution. And then those notes all trade at a premium or discount because they're like bonds. So if the market is down, there's actually a very cool opportunity there because you're going to be trading at a discount, almost like a rubber band.

So as long as that rubber band doesn't break, you know, fall through the barrier, you're going to go back to par. So there's historical years on that index where you would have earned that coupon and captured significant appreciation. And obviously the closer you get to maturity, those ones end up coming back or. that's right but the most common uh you know happening or happenstance is that those notes are auto called like that's in the name so each of them has a one year non-call period and then after that they can get called away so if them if the reference asset is positive after one year those notes get called away and the principal gets reinvested back into the new wrong but sorry back to my original question how much is the underlying moving like how much volatility is there outside of the

yield. Is there a lot of movement in the strategy in between these periods of income? Yeah, so the notes are mark to market. The investment experience you will receive what we've seen on that index level is a little bit more volatile than the S&P 500. So about a 20, 21% volatility is what we've seen historically. And in exchange, you get that high coupon. And if you track that over 10, 15 years, you look a lot like the S&P 500 over time. Which makes sense that if you're getting that high of a yield, you would expect there, it's not free. There is no free lunch, and if you track it over 15, 20 years, the total return of the S&P about matches the income you would have received on a net basis.

So then the obvious question is, why would you do that? Like, why would you, I mean, I guess this would obviously be preferably done in a qualified account, otherwise you're just going to lag because I would assume that this option is ordinary income. No, it's not. Okay. So tell me why would you do that. This has the risk return profile ultimately of the S&P, but you're just, you're turning the price stream into an income stream. I would assume that's for income purposes, for spending purposes. And hit on the tax stuff too, please. That's exactly right. Yeah. So any, any reason somebody would buy derivative income is the same here. People are hungry for yield, hungry for income. They use equity markets as a differentiator from credit or duration to get that. So anybody looking for differentiated sources of business. income would be looking at the auto call market. That's where the appeal is, getting that high coupon. In the note world, a lot of that is distributed as ordinary income. When you do this inside

the ETF, specifically inside a swap based ETF, well now we'll have a little bit of distribution of ordinary income from the collateral. We have to hold collateral. So you're distributing that sofa rate. And the rest of that, our anticipation is that for that to be return of capital. not return of actual money, not return of your actual capital, but treated as return of capital. So that's a remarkably more efficient, you know, tax treatment than, you know, anything that we've seen on the auto callable side. But preface that with this is not tax advice. All right. I was about to say, obviously, consult with your tax person on this. But this is the type of thing as you're describing it. I could see the quants hating this and poking holes and be like,

Why would you pay for how much, what's a basis? How much does this cost? 74 basis points. Okay. Why would you pay 74 basis points when you could just create the income stream yourself, just sell S&P or whatever? But I think what they would miss, and not that's an entirely not valid argument, but this is the type of thing that advisors will love because it's scalable.

Because if you are doing this on a client by client basis to do all these QSips, to do all of this, to reinvest when, when these. things do it called it's a pain in the neck and this is the ultimate easy button i agree i think this is definitely the ultimately easy button um paying yourself from capital appreciation is not a bad strategy i think the the hard part is getting people to do it you know i've been trying to get people to use capital appreciation and then pay themselves from that for a long time you know there's hundreds of billions of dollars if not trillions invested in income paying instruments people want income and they want their funds to pay them that income.

Yeah, you might think it's irrational. It doesn't matter. The proof is in the pudding, like people that hate dividends. It's like, oh, you could just give yourself a dividend, just sell, no. I mean, yes, in theory, but in reality, we're humans and we like things to be easy. So what's the, what's the worst case scenario? You said, like, the GFC, which the stock market fell almost 60%. Like, what is, what does it look like in that situation? And maybe that's an extreme outlier, obviously. But maybe what's, what's a like run of the mill situation where this the volatility gets you somehow. Yeah, so we've designed that underlying reference index,

the Mercube U.S. VAL Advantage index, is designed for auto callables. It's designed to optimize that income. So if you look at the rolling historical returns of that, the odds of that index being down below the 40% barriers, which is where these notes are struck is remarkably low. So the global financial crisis is that time where you would have knocked in on some of your notes and lost some of the principal.

The important thing here is if you bought one note back then and you knocked in, you would have lost some of your principal value. So the way a barrier works is if it's a 40% barrier, if the market's down 30%, you still mature at par. You still get your money back. If the market's down 40%, you've lost 40% of your principal. It's a knock-in barrier. So the odds of this index knocking in were remarkably low, and the global financial crisis was when you would have done that.

But if you ladder this over 50 plus notes, well, now if you've knocked in on one of the notes, you've lost 40% of your money on 150th of your portfolio. And so it's a remarkably more efficient way to deliver access into the auto call space. But you talked about your portfolio applications. you know, we're seeing people look at this and use it as an equity alternative. If you think you're entering a low or slow growth equity market, maybe you think GDP is going to be, you know, low going forward. 14.7 is higher than the average return of the... Yeah, why is that yield so high right now?

It's largely because we stabilize that volatility in the underlying index, but also... So in April, this, the yield wouldn't have looked quite as juicy. It looks about the same. Again, our ball is about stable. People might have bought those worst ofs during that vol spike, but our vol is stable. So if you hit a big vol event where vol goes to 70, our vault targets 35. So you're about half as exposed. So it's not risky by that measure on the upside. Do you think one of the reasons why the yield is so juicy is because there is like a skew,

there are more buyers for the insurance protection and you are taking the other side of it? No, not at all. The only reason that the coupon is so high is because we've custom. an underlying reference index to stabilize a volatility so that you can get a high stable coupon. That's really the reason. You're taking the parameters of the Black Shoals model, not to get too deep, and you're stabilizing some of those, which makes options pricing a lot more efficient. So this is not, it's not rocket science, but it's definitely different, and it's definitely more complicated than bonds. How would you estimate advisors explain this to

their clients? The way that I talk about it is think of it like a bond that pays you steady coupons so long as the equity reference asset doesn't fall below a specific level. Okay. So what happens if it does? Then you don't get paid. On the entire, you don't get paid at all or just for that one? Just for that one note. So every note inside the portfolio has a coupon and it has a maturity barrier. So if the market is down below that barrier, you know, when you pay that coupon at the month, then you just missed that coupon for that that month. So that's one of the reasons that you own 50 of these 100% to mitigate that risk.

But let's talk about the nightmare scenario. Yeah. So let's say that you buy this. And then over the course of time, the S&P falls below the reference point and it stays there. Is it possible that you can miss a year's worth of payments and then also have the price drawdown on top of it? It's like a double gut punch? So the severe sustained drawdown that lasts a very long time would be your worst case scenario.

If the market goes down significantly below your coupon barrier, so below that 40% mark and stays there for 52 weeks, again, these are weekly laddered notes. So two of them, then you would miss a coupon on all 52. then if the market stays below minus 40% for five years, because these are five-year notes, then at that point, you'll start losing principle. So you'll have some drawdown because these mark to market, but your principle is preserved over that five-year note period. So it would take a very severe sustained market decline. And again, even in the global financial crisis,

if you take 52 or more of these notes and ladder them, you might only lose coupons on maybe a quarter of them. So your 14 and a half coupon might have gone down to, you know, nine or 10. I guess you could say, listen, if the environment that I'm describing happens, we probably have bigger things to worry about than this ostensibly smallish portion of your portfolio. This is probably not going to be a 100% replacement for everything. I would, I mean, that would sound a bit extreme. But it's important to know what you're getting into.

Yeah, exactly. So the reference index that you keep mentioning, granted, this would be a back test, but would you have the, do you have a back test of what would have happened in an 08-like environment? Yeah, you can see the historical performance of the laddered index that we are trading swap on. It's a Mercube index. The ticker is MQ AutoCL. So MQ AutoCL and go to Mercube's website.

It's on Bloomberg. You can model the performance, look at it relative to the S&P. But again, the long-term results are look a lot like the S&P 500, maybe a little more volatile. That might be your nav experience. But people are buying this for that high coupon, the high stable coupon. I'm going to set the bar 12 months total AUM at $7 billion. What do you think? Over or under?

Ben, is that your question or mine? I think he'd probably feel pretty good about that. Yeah, I do think for advisors looking for. come solutions. I just had a conversation right before this about trying to force people to spend more money. I think giving them, you're almost paying them a monthly income. It is a way to get over that psychological hurdle. It's a great idea. From my perspective, I look at the derivative income space and the massive growth that we've seen in that world. It's well over 100 billion in assets. You go to the structured note side, and it's no different. There's still over

100 billion in assets and derivative income strategies, but they're all tied to auto calls. We are moving that opportunity into the ETF space. I did it with the buffers. We did it with principal protection. We're doing it with auto calls. We're getting phone calls from all over the world, people saying this was incredible. Well done. We're excited for the future of this. I think this is the flag in the ground for the auto call space and ETF. So we would love if $7 billion came into Calamos, I think the space is going to be multiples larger than that. There's obviously a lot of money in this and structured notes already, so it's not like a bunch of money flowing into this type of strategy would change it in some way.

That's right. And what we've seen is there is no cannibalization of structured product sales. Those sales are still booming. They're growing. Annuity sales are growing. Oh, so you're saying that the growth of these ETFs is not really impacting the structured note providers? It's the inverse. It's shining. a big old light on the whole space. Interesting. All right, Matt, before we let you get out of here, last time you were on, we spoke about a Bitcoin derivative ETF. Yeah. And Ben influenced himself. Ben bought it.

So here's what I did. So here's what I did. And we were very skeptical before you explained it to us. But so I sold. I would say skeptic. We were very curious. Yes. It's good. I appreciate it. I sold half of my Bitcoin exposure. And then I thought, well, and this is like a hundred thousand basically. And I thought, well, what, what's the, you know, my opportunity cost here? And so I put some in the, what is it, 11% upside and then like the 33% upside. Just to give myself. You bought the zero floor and the 10 floor. Yes. And it sounds like you guys are potentially going to have other floors there too. We have a zero, a 10, and a 20. Okay. That's right. So yeah, so I did the zero and the 10. Just to give myself and it worked out pretty good during

the crash. I was pretty close to when Bitcoin went to whatever, 75,000. Now it's back up. And on the one, I still have room to run because of when I bought it. Oh, that's fantastic. Yeah, we saw a lot of people making that similar trade. They bought in January. Bitcoin fell 25%. I don't remember when we talked, but Bitcoin fell 25% into April. People were protected through January and through April. They bought the April series and they captured upside as you went. Yeah, we just issued some research on that whole protected Bitcoin space as well. You know, you see BlackRock and others saying, you know, one to two percent in Bitcoin, they have to kind of cap it at that because it's so volatile. What we're finding is, you know, five percent into protected Bitcoin

strategies, you know, from Calamos can actually increase returns, reduce risk, and give you better experience in the portfolio. So you're finding some people who are spreading out their entry points in that as well? Like they're buying every quarter or a month or whatever, when you guys release new ones. That's right. Yeah, and then the next one's July 8th. We've got the next series coming. So it is quarterly that you're doing it?

We're doing it quarterly, that's right. Okay, gotcha. So I think I'm pretty sure I did the January one right when you put it out there. I should be holding that until a year from now, essentially, to get what I wanted out of it? If you want, you know, that particular one is trading right around its starting point. So you could also sell out by the new one if we're moving to a different protection level if you feel like the market's not going to drop any further. Okay.

Yeah. could be interesting opportunity. But I love that you guys are using it. That's phenomenal. Well, Benez, I'm Diamond Hands. All right, Matt, for advisors that want to explore this new category, how do they reach out to you? Yeah, go to calamos.com.

You can find me personally. I'm on LinkedIn. You can probably just have my email to M. Kaufman at calamos.com. Love to talk through this strategy. If you're not familiar with the auto callable space, I would just encourage you. to get familiar with it. It's going to be a category in ETFs that's going to grow significantly over the coming years. We're happy to be the education provider there, get you up to speed. And if you just want the easy button, you know, C-A-I-E.

Yeah. Okay. I'm bullish on this from a total assets under management perspective. I think that advisors are going to like this product. So hopefully this was helpful, educational. People should understand that there are nuances of this strategy. So get education. Go to Kalamos.com. Matt, thank you very much. We'll see you guys. Thanks guys. Okay, thanks again to Matt and Kalmos. Check out Kalmos.com to learn more about this fund and all their other fund offerings. Email us Animal Spirits at CompoundNews.com.