Money Rehab with Nicole Lapin - Trading Options 101 with NFL Linebacker Turned Wall Street MVP Pete Najarian

Episode Date: March 11, 2026

Pete Najarian is an NFL linebacker turned successful options trader and today he joins Money Rehab to break down exactly what's happening in the markets right now, where the big opportunities are hiding, and how to read the signals that the pros don't talk about on TV. Then Pete walks Nicole through a complete options crash course: calls vs. puts, covered calls, naked positions, spreads, and how Warren Buffett secretly uses options to build his biggest positions. He even pulls up Nicole's actual options account live and breaks down what he sees. Then the conversation gets deeper. Pete opens up about losing his dream home, whether he’d run for governor of Minnesota, and the surprisingly simple investing philosophy that's driven all of his success. Check out Nicole’s financial literacy course The Money School  Find a Financial Advisor or Financial Coach from Nicole’s company Private Wealth Collective Watch video clips from the pod on Money Rehab’s Instagram and Nicole Lapin’s Instagram Follow Pete and learn more at Market Rebellion Here's what Nicole covers with Pete:  00:00 Are You Ready for Some Money Rehab?  01:33 Nicole and Pete's History on the Chicago Trading Floor  03:13 Wolf of Wall Street Era  07:20 Where Pete Is Bullish Right Now 09:30 How to Read Unusual Options Activity (UOA)  11:17 Options 101: Calls, Puts, and Plain English Explanations  12:46 How to Use Options as Portfolio Insurance  16:17 How Warren Buffett Actually Uses Options  18:18 Creating Your Own Dividend Stream with Covered Calls 22:17 Pete Reviews Nicole's Options Account  23:40 Insider Trading and Options  26:12 Are Options Just Gambling?  34:18 Pete's Rules for Protecting Yourself  42:48 Secure the Bag 49:00 Pete on Politics and the Future of Investing in Sports  52:23 Pete Najarian's Tip You Can Take Straight to the Bank All investing involves risk, including loss of principal. Options trading involves additional risks and is not suitable for all investors. This episode is for informational purposes only and does not constitute financial, investment, or legal advice. Always consult a licensed professional before making financial decisions.

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If you've considered hosting but need a little help, find a co-host at Airbnb.com slash host. It was a wild, wild trading. People would either fight on the trading floor, which was a big mistake. You can pass on one question. I don't need to pass on it. Pete Nigerian is an NFL linebacker turned options trader, who became one of the most successful and recognizable figures on Wall Street. He and his brother John co-founded Options Education Platform Option Monster and online brokerage firm Trade Monster,

which are acquired by e-trade for $750 million in the past six. If you're watching this on video, you will see that he is like 10 feet tall, has a goatee, a rat, tail, the whole thing, and has watches and bracelets that make a jangling sound throughout the interview. He basically comes with his own sound effects. Today, Pete and I get into what's actually happening in the markets and where there are big opportunities for investors.

I've been extremely bullish and continue to be so in some of the precious metals, both gold and silver. He also breaks down how to invest in options and whether or not you should. It's my way of buying insurance. You buy insurance on your car. Your car's only worth 50 grand, right? Or 70 grand, whatever it might be. But your option position or your stock.

position might be worth millions of dollars. So why wouldn't you protect that by buying the puts that would then protect you? Then we get pretty deep and go into money confessions that most people don't say out loud. Yeah, that was that was a tough one. That was brutal. It's still brutal. I'm Nicole Lapton, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Pete Nigerian. Welcome to money rehab. Thanks. It's wonderful to be here. So excited to have you here. So I don't know if you remember. but a million and a half years ago, circa 2003, 2004, I was a baby reporter on the floor of the Chicago Merck and the CBO. And I was at First Business Network. Do you remember this?

I remember First Business. Yes, absolutely. May it rest in peace. It was naturally syndicated morning business show and I was a reporter, a technology reporter at the time, like reporting on the advent of Gmail, you know, stuff I should have like really bought back then. And you and your brother were like larger than life characters. But to be fair, like all the men and really there were like 99.9% men there were really larger than life characters. It was such like a locker room situation back then. And so you won't remember me, I'm sure, but I remembered you and all of the traitors there that really like made that experience for me, my, my foray into business. You described them perfectly how you did the description of who they are on the trading floor

back then especially. But, you know, I was so buried into the pit that I was in. We had the largest volume pit on the trading floor of the CBOE at one time. It was Micron Technology was the primary stock that people were trading. And at the time, most people had never even heard of them. They didn't know what they were or anything because they had names like Intel and others that people were familiar with. And now people know more and more about Micron because it's become a big deal. Oh, yeah. But back then it was just a phenomenal trader. And I just said, hey, look, we got to attack this thing and go after because we didn't back, there was a point in time in the world where IBM only traded in Chicago. And Micron pretty much only traded in San Francisco and stuff like

that. And then eventually everything started to come together and everybody could have it on whatever exchange you were on, you could trade those options. It was a wild trading pit. Unbelievable. I liken it to kind of like a Middle Eastern bizarre slash like frat house. Well said with the frat house. You're right. If you could take people into that world because it's not that way today. Now everything, you know, is kind of a backdrop for CNBC. But back in the day, I remember I couldn't wear heels that were over like a certain number of inches. or skirts that were too short. The women's bathroom was super teeny tiny.

I think there were like two or three other women there. I was in the middle of the pit one day. And like some guys, I don't think it was you. But like picked me up and moved me out of their way. Like it was that crazy kind of Wolf of Wall Street vibe. Yeah. Well, when I got done playing football, some of my friends were still playing. And I had one really good friend who was six foot six and about 340 pound guy.

so a very large human being. And when he came to the floor, there were guys offering him money just to be able to hold a spot for them in the trading pit. So it's amazing. I mean, he was literally, and this is 19, or, yeah, about 1994 or five, something like that.

And he was getting 100 grand. They would pay him just to stand there and hold a spot so that when they come back in the trading pit, they can get their spot again because this man's got it. So he didn't do it. But it was an offer that he was looking at, but he ended up being a, coach in college football and he's still in college football to this day.

We needed that like physical presence because it was like really man to man kind of combat going on there. Well, it's kind of why John and I both look pretty ridiculous and we both know it. We've got these, well, we used to have a lot more hair here, but we have, I've always had longer hair and that and then grow your goatee out a little bit and make people think that you're somebody that you really aren't, but they, they are maybe a little intimidated. So, you know, they see and they're like, well, this guy doesn't have anything to lose if we fight because there are fights all the time. And I don't know if you ever saw them, but there was a lot of times on the trading floor, people would either fight on the trading floor, which was a big mistake because that's going to be a fine of a lot of money.

Or they bring you up, they would go outside by this thing called the horse as a big horse statue out there. And they would go over there and fight over there. So, I mean, there was a lot of, you know, sort of sports that really kind of came into this whole thing, maybe boxing if you want to. or wrestling. I mean, there was so much testosterone. A little too much. But you and your brother always had a vibe. Like you and your glorious goate, his hat.

Yes. I mean, it's not like a Wall Street vibe. And look at your jewelry. Again. Yeah, still to this day, right? When somebody thinks Wall Street, they're not thinking, you know, big clunky jewelry and long hair. No, they're not.

They're looking for the really clean, preppy guy who came from Penn or from Harvard or whatever. And we were pretty big at one time on the trading floor. I think we might have peaked out at about 20 some odd traders that we backed. It's funny because some of the guys that we had, not one of them actually had an Ivy League background. Most of them barely got out of high school, but it became something where we were looking for somebody who's aggressive and were they smart enough to be able to figure this out and do it and execute. And with the aggressive side, it really makes you a much better trader, right? I mean, so that's what we did. And by the way, when you're speaking about women, we had the most women traders of any group on the trading floor.

How many? We didn't care if you're, you know, male or female or anything. Can you execute when you're down there? And so I think we peaked out with five girls at one point in time and probably 20 guys, something like that. I'm glad that you well represented. So let's get into the state of the market right now because it's always, it always feels like it's cuckoo chaos. The markets just don't like uncertainty, right? I mean, that really is the big deal about the markets because when there's certainty

out there, people are pretty comfortable and they do their thing. But, you know, all of a sudden you throw a few things in there, the government shut down or whatever you want to say, it's going to cause the market to have a little bit of a tummyache for sure. Where are you seeing right now opportunities? There are so many sectors that feel overhyped. Like, where are you bullish? Where are you bearish right now?

I've been extremely bullish and continue to be so in some of the precious metals, both gold and silver. What about copper? And copper. Yep, you mentioned that one as well. That's a good one. And shoot, there's a few others out there that hardly get talked about. But a lot of the time, we can just see some of these things kind of playing out because John and I built these algorithms that show us different trades that are happening around the markets.

And they've been just spot on. It's just been absolutely amazing. just to see coming in to buy GLD, which is a contract, the gold ETF, and the SLV, same type of thing, where we see huge, monstrous call buying. And when we see that, we really don't listen to anybody on TV. We really don't care what they have to say. We go through all these other things, but that is telling us a lot. And it's been amazing. The run that's been to the upside has been absolutely incredible. It's not always a perfect line that goes, you know, bottom left to the upper right. it oftentimes gets there to the upper right.

You know, it pulls back, which is a healthy way to watch something move. You know, generally, you're not going to go straight up. You're going to have these points in time where it pulls back a little bit. Then it starts to springboard again and then again and again. It's been going on for the better part of at least a year. And, you know, it's interesting because I'll call my brother John up and I'll go, hey, did you see they just bought 113,000 calls just today on GLD in one trade? Did you see that?

We so have to decode that. So, okay, I want to get into a complete cheat sheet around all the options. So when I was taking the series 65, I remember having like a cheat sheet thing with like buy, sell calls and puts and like which ones are bearish and which ones are bullish. And honestly, like you have to help me because they can get really, really confusing. But it's so important to talk about what those movements are because it tells you. so much. Sorry, I continue and then we'll double click. Well, you know, it's interesting because when we start to see what we consider to be unusual activity, an unusual activity is just when you start seeing huge, massive size, and if the size is not just somebody with 100, 100, 100, 100,

and all of a sudden, you've got a thousand options. I'm talking about somebody walks into a trading pit somewhere or now it's, you know, on the internet. And they come in and they buy 5,000 of one specific strike in the options world. And that immediately makes me look at it and go, whoa, hey, now I got to pay attention to this one. And it's interesting because as you start to go into the day, it might start off with just, let's just say gold. But all of a sudden you start to see a gold minor name starts to pop up and a silver starts to move around and you start to see all these different things happening. It gives us what we think is an advantage to be able to see, all right, well, there's somebody out there. It doesn't mean they're right, but they're spending a lot of

money on what they think is right, which is they think there's going to be movement to the upside. They think that whether it's GLD or SLV or any of the miners or anything within that world of gold and silver and copper. So in plain English, if somebody is buying a lot of calls, they think that it's going to go up. And if on the flip side puts, they think it's going to go down. Right. Exactly right. Yeah.

So if they came in, and we see that a lot too, on stocks that have maybe made a big run to the upside, and if they've gone too fast, too quickly, they've made this giant move to the upside, some stock, whatever it might be. It could be IBM, let's just say. And suddenly we see a gigantic amount of puts being bought. there's one of two things going is the first thing in my head is, number one, they're getting pretty bearish. They think IBM's going to pull back after a huge run that it's made. Or it's somebody who's buying protection. They've been in IBM from 140 and now it's trading 220. And

there are somebody's out there and they decide, you know what, I'm going to buy the 200 puts because I want to protect this. It's my way of buying insurance. You buy insurance on your car. Your car's only worth 50 grand, right, or 70 grand, whatever it might be. But your option position or your stock position might be worth millions of dollars. So why wouldn't you protect that by buying the puts that would then protect you? Because if it goes fast to the downside, those puts start to have a lot more value to them. You might have bought them for $2. Now they're $4. Now they're $8. Whatever it might be, because if it was to continue to go to the downside, they're going to just move along with that doc or that that entity. So like how do we explain this if we're just starting professor

Nigerian in the school of options? What do we need to know? So so it can be used as protection can be used as insurance. You have let's say you bought you know a hundred shares of Google and you are worried that it's going to go down. So what would you do? You'd buy one because one option, whether it's a call or a put, represents 100 shares. And on the put side, it would be selling shares and on the call side it would be buying those shares. Okay, so in my very rudimentary knowledge of options, call up, put down. Right, right. That's how I remember. That's pretty much the best way to do it. Yeah, if you're buying, if you're buying in both cases, that's exactly the way to do it. If somebody's options curious and so you have to start and you have to open an account,

you have to get approved, would you suggest that that is a good first step? It's a great first step. The next step is you got to get educated. I mean, you know, I can't say it enough. Maybe you grab a book, you know, John and I've written four. What we emphasize in those books is a little bit different. Each one has been tweaked a little bit, but it all kind of comes right back to you got to be educated and understand because there are things that really could cost you a lot of money if you didn't understand it properly.

We appreciate you giving us the cliff notes here today. Thank you so much. But top level, you can protect yourself or you can earn money too. The Oracle of Omaha has always said that he thinks that options are, what is he call it? They're the entity of mass destruction or whatever he says. Funniest thing is he's the largest trader in the world. So that makes it sort of interesting that he says how negative it is. And yet he uses options more than anybody.

But it's been interesting over the years and he's very, very smart about how he does it. He will position into stocks through the options first, almost always. Because you don't have to report options, but you do have to report stock. When you hit certain levels, you have to report, hey, I own 5% of Apple or whatever it might be. He's an interesting guy, and I've met a lot of the people who have worked for him about his positioning and how he does it. But he starts off buying calls. Then eventually he turns those calls into stock. Then he starts to buy a lot more stock then because the stock's already kind of shifted.

around a little bit. But then he starts selling calls against his stock positions, which is a way where you're actually generating more capital. You're limiting your upside. But if you feel like the stock is going to slowly move to the upside, and then you want to sell some calls, and worse case, it means that he's sold the stock at that level that he's selling those calls at with the premium that comes with that. So it's an interesting strategy. He comes in buying, then he comes out selling and he's, you know, got very large positions, a heck of a lot of stocks. So after a while, I've gotten used to seeing him and now he's retired, but I used to watch exactly, I'd say to John, I go, hey, that's Buffett doing that one. You can tell by the style and what he's doing and how he's

positioning into it. And it's, it's pretty interesting. And, you know, there's so many of the, the biggest of the big who are in the options world. And that's who we try to follow when we say unusual option activity or you away. For my 25 years covering this crazy, crazy, crazy world, I know that even Buffett, like, you have to be careful and sort of decode what they're saying, why they're saying it, like talking their book or not, or like, why do they have this position? And that's why, you know, you often disclose what you have and why you're saying something. And if you're talking something up because you're long or you're short or whatever, there's like usually a reason that somebody is coming out and talking about it that way. Even the Oracle, the goat.

There's also some weird risque jargon in options. And I get the lure, you know, it's really, really risky. And sometimes risque, like single leg calls, naked position, straddles, strangles. Like, what are we doing here? That's fantastic. You just rattled that off. I love that. Well, if you're doing an option naked, it means that there's nothing attached.

Okay. I mean, I'm not trying to be funny or anything. It's somebody who came in and they just bought, let's just say, for a number, 50,000 options, 50,000 calls. That's naked because they didn't do anything with stock. They didn't do anything with puts. They didn't do anything selling options. But had they came in and they bought 50,000 calls at 200 and sold 50,000 at 210,

now they've got on a $10 spread. Hedging themselves. Yeah, they're hedging. Yep, exactly right. And they're just sort of capping it off. And they're trying to put in less money to be able to make a pretty substantial amount of money if they put it on correctly. and that's really, I think, a really smart trade oftentimes because it's really difficult to project a

stock's going to go up $25. But if you put on a $20 spread, like we see all the time in certain names, like in Netflix, Apple, whatever it might be, they buy the 250 strike calls and they sell the 270 strike calls. So it's a $20 spread. And they buy it for $5. I like that trade a lot. I look at it and I go, well, I like the risk reward. I don't think it's really going to run past $20 in the next couple of weeks. So I kind of liked what this guy's thinking. I'm going to follow them. Buying an option doesn't mean you're buying the actual underlying asset.

And so there are opportunities. I don't know if I was mentioning this earlier when we were catching up, but I started Private Wealth Collective, which is a wealth management offering for our audience with no minimums. And we were having a client called the other day. And this family has a huge concentrated position in one. one very buzzy, buzzy stock.

And we suggested a covered call strategy. I like that. That's the most popular option strategy in the world. Explain why that is and why it could be a good option, no pun intended. Part of the reason I think that it exists as the number one is it's relatively simplistic. You're buying the stock. And so you own the stock, but you're selling a call,

usually something that's a little bit further above where the stock price is at that time. Let's say Nvidia. Yeah. So if it's Nvidia and Nvidia is trading, let's say, at 130 or something like that, just as a number. I don't know. I don't think it's much higher. I bought it at 40.

So good for you. Thank you so much. Wow, that's a great buy. But so let's say it's you own Nvidia and you own the stock at 120. If you sell the $130s, so $10 out of the money, you're not expecting it to get up $10 in a fairly short period of time and you sell those for a dollar, you basically take that dollar and put it in your pocket. Because unless the stock goes flying to the upside and you don't get a chance to buy what you sold back, now that actually is something you have to know where it's going to be able to take away your stock if you don't buy it back as it goes to $1.30. Yes. So slower.

One more time. in the back. So I own a bunch of NVIDIA. Yeah. And I want some income because who doesn't? Right. What do I do? So if you were to sell the options, now you're going to take those. And on a percentage basis, you are creating better than almost any dividend you could ever find anywhere, right? Because let's say you just sold it for a dollar and you did it every two weeks, you'd sell this dollar option because the market is a dollar at a dollar 50. And you're like, well, I already own the stock anyway, so I'll sell these for a dollar. So you sell them for a dollar.

And the stock doesn't go up all the way up there. So you don't have any worries. You put a dollar in your pocket. So you're creating your own dividend stream as you're doing this. And, you know, there are so many expiration cycles now. It's absolutely crazy because it used to be quarterly. There was an expiration cycle of, there were quarterly options. Then it became, okay, well, there's monthlies.

Well, then all of a sudden it became, well, forget the monthlies. Let's just do it every Friday. Okay. And now we're starting to see where there's even more throughout the week expiring options. But if you were to do this every two weeks and you took in a dollar and at the end of the year, you never had to worry about it because when you sold the options, you were able to buy them back for nothing, kind of 10 cents or something like that, just to protect yourself. But let's say you put a dollar in your pocket and you were able to do that once a month every month of the year. It's not such a bad return. Yeah. And you've created that by just selling something that other people were buying for

the hopes that maybe that stock could come running up and go through there. So it's a lot more simple than most every other trade that you put on out there because it's very limited risk. The risk that you have is the stock goes shooting up to the upside and then you unfortunately got stuck selling it at 130 and now it's trading 140. But there are risks. Like it could shoot up. You could have, you know, limited upside, but you're not losing all your money. Which is why it's so popular.

For just creating your own like sort of passive income stream for lots of folks. I would love to give you my phone, which I'm kind of scared to do. Uh-oh. And see what you do with my options account, which is on public. right now. I have never traded options before personally. You should always do paper first. Okay, so explain that. That's like when you were in grade school and they did the fake accounts. And actually, you know, when John and I had a brokerage company called Trade Monster, it was the number one brokerage for a very long period of time. I don't know what our run was,

but let's just say it was five years or something like that, six years. And eventually it went to E-Trade, who then it went to Morgan Stanley and whatever. We had a whole setup. in there where it was just a paper trade. So a paper trade meeting a fake trade. So you go in and you say, okay. That's not as fun. Well, there's less risk, though. Oh, I want to take some risk.

Okay. So here's my call. Tell me what you see. So I'm looking at this. Can you do something like very vanilla, like a V-O-O? Or in video. I'll tell you what. The one that intrigues me probably most is your Microsoft trades.

So tell me why. stock itself is trading around 404, but you're going all the way up to the 625. So that's like a really long ways up there. But it is going out to January, so you get a lot of time. So just so everybody understands a little bit more about the options, one of the factors of going into price an option is what we call theta, which theta stands for time. So that's how much time does it have because is this a two-day trade or is this like it actually is a nine-month trade because you're going all the way to January of 2027. So that does because that there's that much time, that puts a lot more premium into the options that you're going to trade. Well, remember in the tariff

situation, there was a one-day options trade that seems suspicious. Yes. I think it was suspicious. Was it insidery? Well, it sure feels that way. And, you know, John, always tells the story. It's not a pleasant story, but it's a real story, which was we saw an incredible amount of unusual options in the airline companies, American being one of them, right ahead of 9-11. So it just shows you that, you know, there's good and bad things that can happen in the market. And unfortunately, that was something where that was used in a bad way because they were buying puts expecting the stocks to go down like they did. Wow.

Yeah, there's insider trade because they were doing terrible things. So there's so many different factors that go into these things. Who's making the trades? I mean, you've probably seen all these notes about all these politicians that are suddenly worth millions and millions of dollars. It's like, well, how did you do that as a senator? How are you now worth $40 or $50 million? That seems a little bit ridiculous because you didn't have that money when you started. And there are all these apps.

that you can follow the trades, although there's a delay where they report and then it, you know, it shows up much later than they actually put the trade in. And so it probably already happened. How do they not get in trouble? Like if you're looking at this crazy options activity, you know, the 9-11 breaks my heart even thinking about it, but, you know, or, you know, a more innocuous situation of the tariffs. Like, how is somebody who's doing a one-day option, which is not, can you explain that that's not a normal? It's not normal, although it's becoming getting closer to being normal. But it wasn't normal, especially, you know, if you go back to Liberation Day a year ago,

it was not normal. And now all of a sudden it's becoming that way because the options world is getting that much more interesting and people are getting more educated and they're getting now more involved. And the one nice thing for some of these people, I think if they're doing a one or a two-day trade and it's not dirty, they are doing it because it costs less. They think the stock's going to hop up because of the fact of, whatever the fact is, and it's not something illegal, but they're just saying, hey,

earnings are tomorrow. I think they're going to be great. I think the socks are going to go up. So they buy a one-day option for tomorrow. I mean, the volume is increased and also the access, the access, not excess, well, both. Excess is increasing because of access that didn't exist when you and I were just running the halls of the seabot. Okay, wait, so are we putting in a trade or what? I'm so intimidated to do that. I don't really. want to do this. And you're like, this is a hot potato. Get it out of my face.

I just don't like the responsibility. I appreciate it. Well, if you give people a sense, though, of what could happen to the upside, what's an example of like the biggest return that you've seen from an option trade? Yeah. The craziest ones probably, some of the crazier ones that we've seen of late have been in, and I mentioned those medals earlier, but if you look at silver, I mean, silver itself, just silver was up like 170% last year, right?

I mean, so in a year. So pretty amazing. Now, it's pulled back significantly from that when it made that huge run. But I think following along and seeing that, that was amazing. And I think a lot of people for a long time didn't understand that it wasn't being bought for the same reason you buy gold. Because you buy gold because you're looking for an assets that, that that's something more, I guess you'd almost call it reliable or whatever word you want to use.

Whereas silver, yeah, it's a precious metal, but that's really not why people buy it. They buy it because it goes in everything. It goes in your phones. It goes in your computers. It goes into EV cars. It goes into, I mean, take your pick where it goes. It's everywhere. So there's a lot of use for that.

And you look at all of these various, I mean, when we say that it's in the semiconductors with the chips and all that, just give that a little thought of what are the stocks that we talked the most about over the last two years chip stocks amd and invidia and all these things and all these other companies are all making their own chips now even and stuff like that so the demand is there for silver and it's just absolutely been an incredible run now i think it needs to take pauses now and again and pullbacks now and again but i don't see a slowdown yet anyway because i i everybody was saying well it's the biggest bubble ever and this, that, and the other. And then all of a sudden it kind of runs back up again, right? And then it pulls back a little bit and then it runs back up against. I think that there's

a lot of reasons to be interested in a lot of different parts of the market, whether that means the software stuff that everybody talks about and everything going on with data centers, with AI and those kinds of things. But it's also energy. I mean, look at what just happened in the last few days based upon what's been going on with some of the military things that have been happening, right? I mean, all of a sudden you see crude oil, which can't get out of its own way, finally starts to springboard back up again in a big way. And I notice it out here with your cost of your gas, by the way. They must have jumped it up right away as soon as the oil prices jump because you guys are paying about $5.50, I think, a gallon. Well, I have a Tesla out here,

but so I don't know what the prices are. When I was riding over here, I did see a lot of $5.50s and five and a quarter and in Minnesota it's three and a quarter. So I just sit there going, that's pretty interesting, but it's pretty quick. And we were 275 just a couple days ago. So do you think we missed, if we didn't jump into buying gold or silver or copper or any of these metals, is it too late? I can tell you that on a very consistent basis, we still keep seeing what we call unusual option activity.

We still continue to see buyers of options. that are indicating to me that they think they're still more upside. Yeah. I'll give you a crazy example of one yesterday, just a couple of days ago last Friday. Netflix. They finally made the decisions that they weren't going to make this move, right? Or Warner Brothers. Yeah, on Warner Brothers.

And so I'm sitting there looking and all of a sudden I see some huge unusual options being bought, right? 50,000 of these, 30,000 of these, 30,000. thousand at the, I mean, just very, very rapidly bang, bang, bang, bang. And I was looking at that trade and I'm thinking, stocks actually down right now. So why are they buying that? And as I'm thinking about why they're buying it,

I got a little bit smarter for myself and I said, you know, they're buying it because they think that the way it's going to unfold, it actually is much more, it's a better deal for Netflix. So somebody made that sort of decision. It doesn't mean they're right, but that's what they did. and the stock's getting hit so it doesn't look like that's right. Well, the one thing that I was, as I was sitting there, I was thinking back to my days on the trading floor because I was thinking, wow, when a trade like that comes in, I have to hedge it somehow, right? I'm on the bad side.

As a market maker, you sell and you buy based upon whatever the numbers are. So somebody now is extremely short. Well, that's who the professionals are, guys supposedly like me. how am I going to hedge it? I can't get enough stock to hedge it. So I just started looking and I said, well, they're going to have to buy options themselves to kind of get out of this mess that they're in. And lo and behold, all of a sudden,

these things were moving all over the place because they needed to hedge this because their bosses at the end of the day on a Friday, especially, are not going to be happy if they're short Netflix out the wazoo because they sold all these calls and couldn't find a way to hedge it. Can't be naked on a Friday night.

Yeah, you do not want to go home naked, naked like that. Yeah, that's for sure. That would be bad. But it's really been interesting to watch that one because it was all happening all at once. And I'm just sitting there going, they can't possibly hedge this. They got to either buy the world out of stock,

which they don't want to do, or buy other options to kind of cover what they needed to cover. So it was an interesting great Friday afternoon of trading that was going on because, you know, you had the people who were happy to be sellers, but you also had the people who were kind of frowning to be buying to try to hedge what they've, what they've sold. They would sneak it in on Friday. They do. And also bad news and stuff.

What do you think? We're on to you. They do that, right? I mean, they really do. It's Fridays is when they do it. Or it's over the weekend. Who do you think should be trading options? or who shouldn't be?

Oh, that's a really good question. I would say this. The people that are curious and interested should definitely dig into it. But I would also say the people who shouldn't are the ones that aren't willing to get a full understanding of how the options work.

Because the worst thing that can happen to somebody is they didn't understand that, oh, if I sell the call, then that means that if this thing gets taken, out? What if the stock gets, what if it's a biotech stock and they just willy-nilly sell an option, sell a call option? And the stock gets bought out at 50 bucks, but it was trading at 20 bucks. And they've cured cancer in blah, blah, blah. And so people are pretty excited about this biotech stock. And now you all of a sudden wake up and you're like, well, wait a minute,

I sold those for a dollar and now they're trading at $30. And I sold 10 of them. So, you know, I've just lost a lot of money, right? So it's, you know, you really have to do diligent work to understand it. And if you don't do that, I would say don't trade options. Do you think it's true when people say it's gambling? Yes. That's an easy one for me. It is a gambling.

So it attracts dopamine chasers. It does, to some degree, for sure. You know, it's funny because they hate when you say that. No one ever would, would ever want to hear me say that. But it's true. There's a lot of truth to it because, you know, you can stack it up however you want, and it's never going to be perfect. But you can stack it up, stack it up, stack it up,

and then say, all right, how much am I willing to lose, you know, on this trade? I hear guys say stuff like that. And, you know, those, that tells me that it's a bit of a gambling thing. And it is. I mean, it's a gamble to decide because there's a time frame, obviously, for options that you don't have with stock. With stock, the stock's generally going to be there unless something crazy happens or whatever, whatever, like they get bought or they go bankrupt or whatever. But, you know, if it's options, well, they expire this coming Friday or they expire the

following Friday or, you know, however, but there's a time frame for the options to end. So it's, yeah, I mean, there's a lot of reasons why I do think that it, there is a bit of a gambling feel for it. And long ago, I thought that we should put in a place in Las Vegas where people could walk in there and they could buy a call on Microsoft or something like that. I mean, I would go to that table all day long. Honestly, I do have a hot take when it comes to this gambling idea because people say trading is like gambling as if it's financial blasphemy. The odds are right on the wall. Show me a blackjack table where the odds are right there on the wall and I will be sitting there day a night. It is just not the same. Right. Yeah. As going to Vegas.

Yeah. It could be considered gambling, but it's very educated gambling in terms of what are the risks. You have all the information. There is risk and people have to know that. But I think quite frankly, isn't buying a stock risky too, right? I mean, selling a stock is risky. Buying a stock is risky. There's no promise it's going to go up. Walking outside your door is risky. Right. Yes. So I know I answered that very quickly and I surprised you with that. But I do think that there is something to be said for it's educated gambling. And it just is whether somebody likes to agree with it or not or whatever.

It is. There is something to it. Do you have rules that people should put in place to protect themselves like, you know, don't put X percent of your portfolio into one trade? That's one. That would definitely be number one. I'll give you this one that John and I have talked about for a long, long time. When I pay a dollar for an option, okay, if that option goes to two sometime between, you know, a very short time frame or whatever, but whatever time frame it is, suddenly it's trading at $2.

I take off half. Let's say I bought 20 of them. I'll take 10 off. I'll sell it, 10 of them. Now I have, it's, I got no risk, right? But I still have some sitting there. So it's like if you bought a stock and it goes up, you're selling what the spread is and you're keeping your cost basis.

You're not like, you're taking money off the table. I'm taking money off the table and now I still, I still have something on the table, but it's basically free money now. Yeah, it's house money. I like that. On the negative side, because you always have to have the negative side too, you started off and you bought something for $2, and now all of a sudden it's a dollar, I tend to think that that's time to say, I'm wrong on this trade.

I'm going to get out, and I'll just try it another time. It's not a good feeling. This is something I have to learn, you know, because I'm always like, you can do it. It's going to come back. Well, you know, and you never know. I'm not saying it's perfect. There's no way that I don't think there is a perfect answer. But I think that if you do that strategy, you know, it gives you a really good opportunity.

to have some success, I think. So it's easy for you to cut, cut bait. It's not easy. But you do it. I'm like you or anybody else. I mean, honestly, I paid $3 for an option and now it's trading for a little over a dollar. I got to make a decision about what went wrong and just have to kind of bite your lip a little bit and say, all right, I was just wrong on this one.

The worst thing that happens is you do that and then the stock goes back. I know, I know. Which is a terrible feeling. But, you know, every decision has some sort of outcome, right? And, you know, it's not always perfect. Well, there's a sunk-cost fallacy, right? You're like, how do you talk yourself out of that? What goes on in your brain?

Tell me, Pete. I know it's a scary place. I think the greatest thing that football taught me was that somebody's going to lose, right? At the end of the game, somebody loses. It's just the way it is. And you're hopeful that you're fortunate enough to win a lot more of those than lose them. I think I learned in a lot of the discipline that I have in trading really did come from my sports background. I got to come back another day for that one or whatever, you know,

whatever it might be. You just have to be disciplined and understand, all right, I turned out to have been wrong on this trade. I got to clean it up and I got to move on and not think about it again. I personally won't even look at the stock again until there's a reason for me to look at it to make another trade in that stock. I won't look at it. And I see people who will stare at it all day long. I have a law. I love him to death. But when he has a bad trade, he will look at it all. He did everything right. He got out of the trade. And now all of a sudden it went back up. And I'm like, well, how did you know that? Don't look at it. Take it off your screen. It's like your ex. Delete their photos. Absolutely. I mean, as an options trader, do you feel like it's more offense or

my, my sports analogy is going to be limited? It was fine. It was good. It wasn't good. But do you think you're more in like an offensive, or a defensive posture when you're trading? I think more offensive. I mean, you know, I see what I see, you know, at our market rebellion stuff that's unusual option activity. I see it. I'll stare at it and think about it and then think, what is a catalyst?

What could happen? Does this make sense? And if everything sort of lines up and I do the trade, I'm okay with it. And I think that's more offensive. I think defense is what you play when you were wrong about it. Right. and you've got to have that strong defense that says, let's just get out of here and we're done with this one.

And then move on to the next one. Okay, last analogy. Who is your investing MVP? You know what? This will sound sappy. It's probably my brother. I knew you were going to say that. Well, he's my older brother.

You know, and he literally, when I got to the trading floor in Chicago, he started in 81 after he was with the Bears. And when I got there, he was considered by a heck of a lot of people. on the floor as a big, tough, mean, smart guy who was king of the IBM pit. And so watching him as a guy whose background was in graphic arts have success on the trading floor is absolutely amazing to me, right? Both of you guys. Yeah, and I was, I was pre-med, so I did have a lot more financial type things going on, like, you know, biology and chemistry. There's a lot of, you know, numbers that really do come into play in a lot of that stuff. But it's just interesting that he was so far away

from it, you know, being graphic arts guy. I mean, he literally was a guy painting things and stuff. I love that, though. Yeah, I do too. But for him to have the kind of success that he had and has or whatever, but that he had when he stood on the trading floor, he literally just left the trading floor when I got there in 1992. He kind of went upstairs and sort of looked over everything. And And I became the guy on the floor who kind of was like the risk manager for the whole firm. But yeah, a lot of fun. A lot of fun. It's fun to work with my brother.

Can I be adopted? You can be a younger sister. Thank you so much. So we have a new game that I'd love to play with you. Speaking of games, I'll never play football. But this is a game that I hopefully can play called Secure the Bag. Okay. So I have this bag of money questions for you and answer them.

I'll answer with you. you if you want. Oh. Have you ever hidden a purchase from a partner? You can pass on one question. I don't need to pass on this. No, I haven't. I have to expand on it.

That could be too dangerous there. All right. So I'm grabbing another one. Have you ever cried over money? Oh. I haven't seen these. I've never cried over money. I've gotten angry over money that I've never cried over.

I think I've cried over money, but not in an investing sense. Sure. Like in a more personal sense or what the money represented. Like, you know, my house was foreclosed on when I was a kid. That type of stuff I think is money related. That would cause me to cry. I always knew there was another day. So I didn't, you know, I try to be and my wife always has been amazed by my even keel

side of me or whatever because if I have a great day, it's a great day, but it's, it's the end of the day. So, so what, right? What about happy tears? No, I try, I try not to go too high and too low. I really don't, I don't really go low ever. And I go a little warm, but not too high. I remember on the floor one day, a guy was so upset, you know, again, this was like 25 years ago, took a bunch of cash and just like threw it out.

And it was kind of a weird vibe because I was, you know, 18 at the time. And so I was like, can I grab this? I was going to grab it. But also it was kind of taboo. Like, don't pick it up. He's really upset. Is he going to come back and get it? But also, that's $100.

So hook a sister up. I don't know. That's classic. But that's like, that was what that era was. Yeah. A lot of big emotions, but more on the anger side than the tear side. What's your biggest money fear? Wow.

That one's hard for me just because I'm not really sure I even understand. You don't understand fear, Pete? I don't mean that in a cocky way or whatever. I just don't. Oh, give me some of whatever you're taking. It is funny. I got so used to, you know, my background of like where I went to school for junior high and high school definitely turned who I was into who I am.

And I never even thought about it. So I didn't ever really think about fear. and that kind of thing and whatever. Well, I don't know if you want to share any of this. Of course, feel free to pass, but you lost your home in Florida. That made me cry. No, I didn't cry, but it sure made me angry. Yeah, I had a hurt.

We had two hurricanes back to back, came through, took our house that we had just finished. It was the last touches of the house in April and then in October. Custom. custom everything. We're 20 feet from the Gulf of Mexico. I mean, you know, how do you be? It was our dream home. My wife and I.

And she was the general contractor. She did it all. She made sure the guys were there because she didn't like the way it was getting run, the way it was. Girl after my heart. Oh, my goodness. I mean, she had to go and go like, hey, let's get going, guys. But, yeah, that was a tough one. That was brutal.

It's still brutal because this is going on. And I think I told you. August of 2027, I think, is when we're supposed to go to court with the insurance people. This happened two years ago. You know, it's kind of like, what in the world? How long can you stretch it out? But yeah, that one's pretty, that one's, that one bugged me pretty good. Yeah.

But more angry than, you know, not, I'm not a big sad guy. I mean, every other answer is like a bunch of laughing, which I love. Sorry about that. amazing infectious cackle, which I love. So thank you. No, it's an experience. So you're not fearful of rebuilding or maybe, you know, your wife would have a different answer. No, I think she's in the same boat with me. I mean, we basically, we made a decision is we're going to, you know, get this thing taking care of one way or the other, hopefully our way. I mean, that is what insurance is supposed to do. But we, we want to Airbnb. I mean, like, for instance, I'll tell you, I'm, I grew up

in life in the Bay Area, California. I still love it up there. I love it down here. I have friends of Manhattan Beach. I'm going to be with them tonight, actually. So I love it there, and I really love Manhattan Beach. So, you know, between those places and Tahoe and different parts of Utah and Arizona and stuff, I would much rather Wyoming and Montana, I literally would love to just do an Airbnb

for two months or three months and then go back to Minnesota where we kind of want to always stay with our house that we've got there. But we love it. We really do love it up in Minnesota. It's a great spot. It's not for everybody because the winters are long. Right. But it's a great city.

I mean, you know, the Twin Cities are really pretty fun. We've got all the major sports and all that kind of stuff. So it's pretty killer. Yeah, we like it. And to be clear, because one of the most searched questions about you, you're not twins. You and your brother are not twins. What? And I don't know which one that's, you know, good or bad for, right?

because he's six years older and I'm six years younger, obviously. But it's like, well, either that's a compliment to him or a slap to me. I don't know. I don't know how to take it. I think it's that you guys just are, you know, so sympathico. Yeah. You know, we've never had a fight, never had an argument in our lives. It's incredible.

He was kind of a mean guy when he was a kid. But, you know, past, past like 16, he's been pretty good. I'm so happy that I'm part of the family now. Yeah, you're part of it. Great. You could be a part of it. When you were a kid, did you think you would be rich when you grew up? I never cared.

I really, I don't know that I, even to this day, like, I'll give you an example, like, if you said, well, what do you mean? I don't care. I drive a 2013 F-150 pickup truck with 290,000 miles on it. I really don't care. My wife and other people try to get me to buy a new car or whatever, and I'm like, why? this thing's great. So the money part is... You and Warren.

It's just not who I am, I guess. Rolling around in your old jalopies. How about you? You didn't answer this one. I definitely didn't think I would be rich when I was young. No way. Absolutely not. What's your biggest money regret?

What's your biggest money regret? I don't know. No regrets? Like not even a... Because you move on so quickly from a trade. You have such a... You're such a healthy mindset. Again, you guys need to bottle this.

The only money regrets that I probably over time probably have ever thought about was certain houses that when we were looking, we should have maybe bought this one versus that one or whatever. But my wife does a very good job of making a house a home type thing. So it's pretty easy. We could live almost anywhere, really. Again, woman after my own heart. Oh my gosh. The show is not long enough for all my money regrets. But the biggest one is, you know, I just, I wish I started earlier.

I wish I started investing earlier. I don't think anyone, we had like a billboard campaign for a minute that said, I'm glad I didn't invest earlier, said no one ever, right? Yeah. And what is next for you? There's a lot of pressure to be in politics. Minnesota, famous sports turned politico. A lot of people in Minnesota would love for me to explore the whole governor thing.

So there's groups of very well. people who have reached out to me who asked me to potentially think it over at least if nothing else. And I've thought about it a little bit. And I've heard from, and I'll say Jesse Ventura, because he's a neighbor and a friend. And I've known him since he got back from Vietnam and all that type of thing. So he's been a friend forever. And he really would love the idea if I would do that. I don't know enough about, I don't think I'm a political guy. It's not really my deal. Would you be a Republican? Yes. Yeah, I would, I would, he was an independent when he won. And so he would prefer that I did

something like that. But I, I'm not sure I'm going to take his advice on that. No, you're out. That's a no for you, dog. Yeah, I don't think I'm, but yeah, that and the football stuff is, is interesting to me. There's, there's, there's a couple of different things going on that are really, really intriguing to me. And I've got some friends, you know, the financial friends who have bought different franchises and stuff over the years and are always kind of asking me about what would I do? Would I ever consider it? And I definitely have interest in considering it. So we'll see. Buy a team? Be part of a syndicate? I mean, there's so many finance guys that were such nerds growing up that they're buying a team and they're bringing in. Right. Yeah,

they need somebody in there. There's more on the football side. And if you look around the NFL, you can see which ones have more success than the others is the owners that actually do bring around the right types of people. We end all over episodes by asking our guests for a final tip that listeners can take straight to the bank. Find the area in the market that you like best, that you think you know the best, and increase that knowledge and take a shot. I mean, I think a lot of people just willy-nilly sort of, you know, sometimes we'll put money into something.

It's like, give it a lot of thought. Give something that you know about it. Like I'll give you a crazy one real quick for me. Walmart. Everybody goes, how did you know to buy Walmart? And I'm like, well. You love shopping there? I go there more than anybody.

I mean, I go there and I see what's going on and I see, you know, especially during the pandemic where there was a big change and it's sticking. And the big change was people trading down. They're still there and they're still at TJMX. So those two places, TJX and Walmart are, I feel like I know them really, really well. And so I feel like I have a pretty good comfort. But everybody's going to have something different, right? So find that. If you can find what you think you know and you do know, you probably have a good chance of having success with it.