World’s Greatest Trader: How To Win In Chaos | Tom Sosnoff

Ving firar 70 år av resor, och det gör vi med massor av erbjudanden som är omöjliga att motstå. Bästa jubileumserbjudanden på ving.se. De bästa resorna försvinner först. Why should we belong crypto? It's going down. And I'm like, that's the dumbest reason because it's going down. Like the reason you should be long crypto is cause it trades at three to four times the volatility of the SPs.

So when it turns around, you're gonna make four times as much. And the basis is lower right now. That's why everybody should have crypto in their portfolio. Just it doesn't matter how much, a couple of percent, whatever. What's going on guys? Today we got a great episode with Tom Sosnov. He's one of the greatest traders in the world. He is the founder of Lost Dog.

He also sold two other companies for a billion dollars, and then he'll tell you he scalped two exchanges for 350 million bucks. Great story in this episode. Uh in this conversation, we talk about what's going on with retail traders, how to think about volatility in the market, how to change your portfolio based on what volatility is doing.

And it gives you some alpha, some of his trading strategies and how he thinks about investing on a day-to-day basis. Tom's amazing. He's given away a million bucks at the end of the episode. Literally, he's gonna give away a million dollars and he's gonna tell you how you can go and get it. So make sure you listen to the end. That's it. Here's Tom Sosnoff.

All right, Tom a great place to start the conversation is uh you've done this a couple of times now. You've started multiple companies, you're one of the greatest traders in the world. I we literally have a YouTube thumbnail that says greatest trader. It did super viral video. Well people want to know what's the greatest trader in the world, I have to say. Um you're starting a new company. So everyone immediately opens their ears, right? And says, Hey, what is going on here? Um but

I think that you have some very unique thoughts and and very passionate about this idea that there's a lot of people who are kind of being left behind by the US economy and this new company is going to try to attack this in kind of a unique way. So explain, you know, what you think the problem is with uh with with so many people being left behind in a K-shaped economy. Yeah, I don't know. I don't know that it's as much of being left behind as it's just there's this crazy imbalance.

You know, like CEOs make a shit ton of money. A lot of money. And the average worker, in some cases, the ratio might be 400 to one or 800 to one, but the average worker over their lifetime is underpaid. And when I say worker, I mean anybody between, let's say, 50,000 and 300,000. And you could be underpaid by a million dollars of your lifetime, you could be underpaid by five million just because you don't know really what you're worth.

And so part of the technology that we're building is a really cool AI platform that essentially helps you, helps to tell you what you're worth. That's it. I mean, it's very straightforward. It's not, it's not there's not that much complexity to it. And and that's that. We're also on the same platform. We're also helping individuals to optimize their investment portfolio. So like for example, you know

improve your basis, show you where your outlier risk is. And one of the coolest things we're building is like this agentic AI for portfolio creation, but not like the traditional one like stocks or something like that. Like we're doing it so you can do it with crypto. So you can do it like imagine imagine you just Type in, build me a ten thousand dollar crypto portfolio. I want four liquid underlying

And in one second, you get back like, you know, four underlyings, the most liquid in a in a vol adjusted notional breakdown. So you have like$4,000 of Bitcoin,$3,000 of ETH,$2,000 Solana, whatever it is. And you push one button, you're filled. Like that's the next generation. That's what we're building. I call uh everyone's talking about agentic commerce. Yeah.

It's a gentic investing, but there's I think to me three steps. There is let me use these tools to learn and then I go and I make my own decisions. Then there is what you're talking about, which is let me have it actually create a portfolio and then me as the human I get final press. And then the final step, which was probably a couple of years away, is just like let me give it to the machine.

And the machine basically will go and figure all this out and there's no human in the loop because I gave it some parameters at the top. I don't think that we're there yet. I don't think people trust that we're not there, but I think there's a step in between those last two.

And this step in between creating the portfolio and then just not having a hands off it is there is The one piece that everybody, the one of the things that holds people back, which is, you know, I want this AI tool to monitor this stuff 24-7. So I don't care what happens, you know, like I know there's nothing I can do if some, you know, if something blows up on a Saturday night or something like that, or something goes crazy on a Sunday night or Friday night, but I'd like to at least know.

And I'd like to at least know where my boundaries are, where where the unquantifiable risk is. That is for sure coming and it's coming like tomorrow. Mm-hmm. And so when you do that risk analysis, how much of this is uh specific to the market versus specific to your portfolio? Right. Cause it's one thing to say It should be a hundred percent specific to your portfolio. Okay, explain more.

Because I don't like, like if you told me, you know, listen, you can obviously program for, I wouldn't say you can program for opportunity. So like if you're like a noise freak, I'm a noise freak. Like so I don't care. Like if you said to me, What are you gonna trade tomorrow? My answer is gonna be whatever is in play. Like right?'Cause'cause like I don't care what I trade.

So like if you said you're trading NVIDIA tomorrow or you're trading, you know, or you're trading soybeans or I'm trading crude oil, uh uh great, whatever it is, whatever's in play, like whatever's whatever has the most noise, the most fun.

So I think you can you can train something to say, hey, wake me up when when you know or or ping me when something interesting is happening. But I also think like just having a peace of mind knowing that somebody's watching. It's kind of cool. Or knowing that your technology is watching. Mm-hmm. That that makes sense. And then what about uh I I call this uh group of people an independent investor, right? So they uh they get all of their information online.

Uh they want to control their portfolio. They don't want a financial advisor or anybody kind of meddling in what they're doing. They want to live and die with their decisions, but they're also chasing a degree of financial independence, which they've been convinced the W two is not going to get them whatever uh they want. And so

What do you see them doing that maybe the institutions or other investors, you know, aren't doing as much of? Well, there's no question. And and I think I think the thing that the reason people like to think of themselves as independent investors when they should, I I like to use the term active, but independent, whatever, um, is because risk-free rates, let's say they're 4%, right? I mean, if you're happy with that, go for it. That's fine. Cool.

But most people are thinking to themselves, well, what's the risk reward of being, you know, doing something different? And the risk reward is some multiple 4%. And so if you're thinking like, you know, three times, four times, five times that, then, then yeah, of course, that that's the excitement of it. That's the interesting piece.

And so I think that that's what the, you know, that's the objective is some multiple adverse free rates. Mm-hmm. Mm-hmm. If you were that person and let's say that you've made a little bit of money. You you've kind of you you've done okay to well, but you don't have enough money to stop working, etc. What would you do right now? Like you know all the tools out there, you know how markets work, you know all this stuff. W put yourself in their shoes. What what do you start to do? So So I'm...

I'm like a junkie. I know. So it's hard. You know, that's a tough question for me because because I don't really it's hard for me to distinguish. Like, you know, to really understand risk is Be rational. Um I'd be a little bit of everything. Okay. Which means what? I I'm you know, I believe everybody should have part in active, part passive, part active. and part in almost every asset class that you can, you know, that that's that's liquid enough. I I don't think if you have just

Like a little bit of money you can afford illiquid assets. Let's say you've got um somewhere between ten and a hundred grand. Right. So somewhere in that range where you're not worried about, hey, I I might not have money for uh you know rent next month, but also you're not like, hey, I I I don't check the bill, you know, when it comes type uh type mentality.

I mean, I you're talking to somebody that believes that in in order for you to get if you have between ten and a hundred, in order to for you to get to the number that you ultimately want, in order for you to build wealth, okay.

There's a lot more to it than what are you gonna do? Like I could easily sit here and say, you know what, you should be about twenty five or thirty percent in passive, you should be twenty-five or thirty percent in active, and you should be, you know, keep some cash on the sideline. that's not that that to me that's a kind of a stupid answer. I think that you should Find a way to do it.

to get involved in the financial market so you can learn as much as you can in as short a period of time as you can so that you can grow your hundred thousand into a million or five million or whatever it is. And the only way you can do that is by learning how to take kind of measured risk. Quantified risk and probabilistic risk. And you cannot do that by just getting some portfolio breakdown. I don't think it's possible.

And what happens if you had a million to five million dollars? Does it change at all or same same same thing regardless of the amount of money you have? Yeah. Sure. Why would it change? Well, I don't know. You tell me. Um, let's talk about trading. Obviously, you spent a a very large portion of your career trading very successfully. Um what are the areas that maybe are the risky?

Today. Like, you know, let's talk about oil maybe as an example. Oil has been incredibly volatile over the last couple of weeks. And so on one hand, a bunch of traders are like, hey, I like volatility. Let me go trade that.

On the other hand, if you're a bad trader uh and you run into the oil market and you know it's a seventy seven goes to one twenty back to seventy seven within a seventy-two hour period, uh that's pretty hard to navigate. And so it does feel like there's, you know, a blessing and a curse to volatility.

You're talking to somebody that's had a very hard time navigating that move myself, like everybody else has. I I mean, right now I'm just short a ton of premium in there. So I think because I think that is the play. Um Explain. I'm just short a ton of options. Yeah. Puts and calls. And uh there's so much call skew in oil that the calls trade for double or triple the puts.

So I think that, you know, you can sell, for example, a call that's fifty dollars out of the money, fifty, fifty dollars, and you can s up and you can sell an equivalent put that's twenty dollars out of the money and you get the same exact price.

Um, for two and a half times the distance. But that premium is so rich, it's the richest premium in in all the markets right now. So for me, that that's what I've been doing. But um I think that the the this market, this as long as you don't get tied down because you remember, we've already been this twenty twenty six has been crazy because the meme stock of twenty twenty six has not been a stock. It's been basically silver, gold.

And crude oil. Yes. It's been three commodities. And if and so if you if you're not used to like touching all the bases and trading everything, you just missed out on some incredible moves. I mean the silver move that makes oil look like a like a kid. You know, like the silver move was in insane. Does that make an argument that um you know, I used to say that uh uh we went from sixty forty

To them, we were gonna have the crazy uncle portfolio was gonna do really well. And it was land, guns, gold, and bitcoin. Right. Yeah. Now, are you saying maybe it's like a buffet trade where you actually wanna have a little you wanna have a little bit of everything, even if, you know, hey

oil's gonna go sideways for two years, but when it moves,'cause we're in the volatility generation, it's gonna fly. Yeah. Like volatile. People always say to me, they're like they're like, Why should we belong crypto? It's going down. And I'm like

Cause you don't know what's going to happen. Like this that that's the dumbest reason because it's going down. Like the reason you should be long crypto is because it trades at three to four times the volatility of the SPs. So when it turns around, you're going to make four times as much. And it's And the basis is lower right now.

That's why everybody should have crypto in their portfolio. Just it doesn't matter how much, a couple of percent, whatever. So so maybe then it's like go look for the most volatile assets, wait for a big drawdown and buy them because the volatility will Not the worst strategy, but not not exactly my approach, but not the worst strategy. I mean, we call that price extreme. And I don't really have an issue with price extreme, but remember price

by definition is not mean reverting. Whereas volatility is. Mm-hmm. So I've always been a volatility trader because volatility is mean reverting. Explain the difference between price extreme and then the volatility. So stock goes up. It doesn't mean it has to come down. Correct. Okay. Volatility goes up, it has to come down. Okay. Volatility is a math equation. Yep. Price is not. Okay. So give me an example right now of what you're looking at from a volatility standpoint. So crude oil.

Um the very volatile. Very volatile. The implied volatility rank in crude all, which means implied volatility measured against itself. It's just a way to rank implied volatility. You know, it went from like twenty to a hundred and thirty. Is that a lot? A hundred and thirty. It it's fenced in at a hundred. In other words, so 130's over the charts. It's off the charts. It's off the charts.

So that's gonna go lower. And it's dropped into the nineties already and hopefully it'll go in the seventies and sixties. So ha so if you think that volatility is gonna drop, which it probably will, uh what do you do? Do you short oil? Do you short volatility? What you short volatility, you sell you sell options. Got it. There's only one way to sell volatility, and that's to sell options. Um you can you can also think

that based on sometimes where where volatility is trading, you can you can think that, oh my God, this underlying has capitulated. Like the night, the Sunday night that oil went to like 119 or whatever it was, you know, volatility peaked At that same exact moment. But sometimes If you go back to 2009 when we bottomed.

Volatility peaked in December of two thousand eight and the market didn't bottom until March of two thousand nine. That was really costly to volatility traders like me. That cost us some money. Why? Because we started to get long in December of two thousand eight when volatility peaked and and the market didn't actually bottom for three more months.

Mm-hmm. So when you let's say you go into the oil market and you're gonna go and you're gonna sell these options, yeah. How do you think about what options to sell? Um, I try to go far enough out of the money where I go to where where it takes at minimum of a full one standard deviation move. So I I just use I just use the the math. And so for me, I start at one standard deviation.

Two standard deviations is too cheap, the options, but one standard deviation for me is where I like to be. Got it. So for oil, uh I'm assuming you put a trade on. So what's spike to one thirty No, well well actually I I can tell you right now my oil position, my oil position is I'm short a lot of Premium, my my average strangle. So strangles you still puts in calls. I'm short the um 140 call and the 65 put.

And oil's trading this today right let's say around ninety four or ninety five. Mm-hmm. I haven't looked at it since I got in your office, but round ninety four ish. Yeah. So you're doing pretty well. Today. I I'm not mu I'm not up money on the oil position, but I'm gonna be. Okay. Um and then when do you know, okay, the oil you know, trade is over, the oil game is when the volatility goes down. Got it. And then you basically just look for And you just cover.

But what is the level? Is it sixty, fifty, twenty? Is there a math equation? Is it gut feel? No, it's no no. It's just it's just based on volatility. I I couldn't care less about the price. No, no, I'm saying volatility. From a volatility. L let's just say thirty and fifty in that range.

Got it. So basically you go from whatever twenty spikes to one thirty. Yeah. You're looking for it to break down below fifty and then you're like, okay, mo most of the juice here is gone. Most of the juice is gone. Got it. Okay. So then let's say you And that's when everybody else gets in and they start thinking, Oh, well now it's calmed down. Yeah. See fear

As a trader, fear is like your buddy. Fear is fear is like that's the only friend you got.'Cause fear is what messes everybody else up but it creates all the opportunity for you. So Let's say you're a genius, which you are, and you end up uh closing out the trade, you made a bunch of money in oil. Yeah. Then you say, Okay, now I got cash. Yeah. How uh walk me through the process. How do you find the next thing? You just look for whatever the most volatile spike's been?

Oh my God. I mean we're talking about like, you know, it's like a bus. I mean, they'cause it's d I mean, after the silver move this year, I never thought that I never thought that gold was going to give you this kind of crazy move, you know, a month later. Mm-hmm. You know, I mean, it doesn't ever stop.

That's the great thing about these markets. Like, you know, um, and as we get like why uh as as we get more and more products and and everything, I mean, nothing ever stops. And so when you're going through this, um, is it always shorting the volatility? Always. I'm I never buy volatility. So volatility is a weird instruction. So yeah, but when volatility spikes and you just like whack it down. Yeah. Yeah. Okay. So

So volatility is is a weird animal. It it goes up about twenty percent of the time. Okay. It goes down It it goes down. I'm sorry, I take that back. It goes up about ten percent of the time. It goes down about twenty percent of the time. It stays in what they call a lull state, just that does nothing seventy percent of the time. So you have to take advantage of your opportunity. When you get it. Okay. So uh how do you know when it is near peaking? You know.

Got it. So like if if oil spikes, volatility spikes, all of a sudden it goes from twenty to fifty, if you start shorting and it goes to one thirty, that's not a good day. Well sure. That's that so so I'll give you the perfect example. When oil started to run on this whole, you know, conflict in Iran. It went, you know, the first time it traded eighty, I'm thinking, Okay. You know, I think we're here. But I backed off a little bit, waited till it got to eighty five.

The next day, next night, you know, next day it was up ten dollars, close and it was like eighty, one eighty two or something like that. Next day it closed at ninety-one. And that was that before it opened that night at, you know, ten dollars higher went to one nineteen. So I was off by thirty-five dollars. Thinking that I pick the top. But you don't get closed out or anything because you've got some time

I got some time and I have some money. You know, money gives you money buys you time. The one thing about the world of finance is if you have a little bit of money, it gives you a little bit of you you don't get scared. If you st the only time genius fails. Is when you get too big. So if you keep your position size relative to the capital you have, you'll never get forced out of a position.

If you let your brain start, you know, thinking that you know something, you're freaking dead. Mm-hmm. Doesn't matter who you are, a Nobel Prize winner, whatever, you're dead. Today's episode is brought to you by ArchPublic. I absolutely love these guys. ArchPublic is an agentic trading the buying and selling of your preferred crypto strategies. Using sophisticated algorithms like the Arbitrage and Oracle Protocol. Is your aim to accumulate Bitcoin during market dips?

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Mistakes investors make it. And they also explain Simple mining. That's simple Go check it out today and see if you should be able to do it. Right now the market is very confused, I think. Oh sure. Uh there's a deflationary macro environment. We've got deportation tariffs, AI, robotics, et cetera. At the same time, we've got this massive inflationary pressure from oil spiking gases up, trueflation's measurement.

It has gone from point eight to one point five. Bonds broke one fourteen this morning. Bon I mean, just chaos in the market. Yeah. What do you do to make sure that you don't get sucked into the fear, the chaos, the the the kind of uh emotional decision making? I don't have a so I don't actually have a macro view and I don't have I I So one of the sicknesses of being like a full time trader is that you can't see past lunch. So so I only know like I don't have like

Lots of people out there worrying about all this stuff. Yesterday I was doing a podcast and somebody asked me about stagflation. And I go, stagflation? Like, you know, I'm looking at what's gonna happen tomorrow in the opening. You know, where are we opening tomorrow? Um I don't have that view. I I I can't think that way because then it will mess you up. Like you'll start thinking I can't do this trade because what happens if this happens?

I mean, like, you know, the bond market's a perfect example. I've been nibbling from the long side because, you know, we're down under 114. I kind of like getting along here. So I've been selling, you know, kind of a shitload of puts at, you know, around the 114, 113 level, buying some bonds here. Cause I'm thinking to myself, I don't know how much lower bonds can go here,'cause I can't imagine we're gonna raise rates, but if they go any lower, you you're sure not lowering rates.

Um, but you know, that's the way I think. So I've I have a very kind of very narrow focus. I I try to keep I try not to think I try to pay attention to what the tape's saying, not what the macro story is.

It's fascinating because as a trader you're trying to think, you know, what's gonna happen before lunch. As an entrepreneur, you gotta think what's gonna happen over the next four or five years, right? Yeah, I'm able to separate the two because as an entrepreneur, I'm all in on whatever I'm doing. Like I don't even I couldn't care less than a little bit.

I mean I care what happens to the world, of course, but but I don't think about things like, you know, a year out or two years out to think about, you know, what about the next generation that's gonna take over this company, you know, all this other stuff. as a trader, I think about, you know, 15 minutes from now, you know, an hour, two hours lunchtime to close today.

Yeah. And as you're building this company, you've now built what two billion dollar companies, three billion dollar company. Two billion dollar companies. And I've also scalped two exchanges for three hundred and fifty million. Yeah, you scalped them. I I'll tell you a story. I don't think I told you this last time. So I built this exchange. Did I tell everything this? No. So I built this exchange called the Small Exchange because I thought we needed a micro futures product.

And we did. And I was bugging the CME for years to create one and they never did. So it forced me to build an exchange. Then as soon as I built a small exchange, they copied me and launched the micro futures, which are now huge. So they we we couldn't compete with them. So we happen to have owned another exchange from a previous deal, and I sold both those exchanges to crypto.com for a quarter billion dollars.

This is years ago. They didn't need the small exchange, as it turned out, so they sold it back to me for 10 million. That's a good deal. That's a good deal. Well, and then I built then I started to build this new exchange with the liquidity pool. Liquidity pool design. I designed it a little after um like Uniswap type thing, you know, but it was for but it was for US futures instead of instead of crypto. Um

And it was a really neat concept. I couldn't find anybody to clear it. So we turned around and sold the exchange to Kraken for a hundred. So um So we scalped them nicely. So so those are good trades. But um What was the question again? So when you think about when you think about building this company, what are you gonna do differently? Oh, I don't know. Like you don't know yet? No. I mean it's No, I don't know. I mean

I mean, I'm not, you know, I'm I'm I think I'm waiting to find out who we're gonna ultimately like kind of partner with, you know, and I know it's gonna be somebody really good. And uh, because we're we're in talks right now with two really good firms. And so I

I know it's gonna be a fun like venture going forward. Um, and I don't know what it's gonna become. Like, you know, we're we're really in our infancy. When you start building When you start building technology, especially today, you know what's the funniest thing about building like AI technology is that I have a AI team and I have a r software team like traditional and they hate each other.

They the the software team has zero interest in the AI team. And the AI team can't stand the software team because the a the software team's like, the last thing we want to do is check AI's work. Like we need to get hired to check their code. And the AI team's like, oh man, the software team sucks. They're too slow. They can't do anything. And it's like

the dynamics, everybody thinks, oh, you don't need software developers anymore because we got AI. Yes, you do. Of course. And and not only do you need'em, they somebody's got to check all the work that AI does and nobody wants to do it. And it's like, um, I'm learning all this stuff. Um And I'm learning, you know, like we talked about agentic AI, I'm actually also really fascinated by um uh by quantum proof.

By quantum proof encrypt encryption because I'm thinking, you know, like what's the one thing that freaks everybody out. It's like security now, you know? And I'm thinking like that's a whole different level of encryption that we could really build into our middleware. Mm-hmm. And I'm trying to like find a team or an investment or like

I'm really working hard at like I haven't I haven't solved I haven't put together the people I need to. I've just got one person and I I want more. Mm-hmm. But um 'Cause I kind of feel like that's gonna be a big thing. I know there's quantum proof crypto, but I haven't traded any of it yet. I don't know if you have. Um, but it's interesting to me.

Let's put it that way. Yeah. Um, when you think about these individual investors, uh, you're an options trader for the most part. Um well, I'm an everything trader now. I don't like to say just options, but how many of them are trading options versus not? Like is it pretty pervasive in the retail space? Yeah. Yeah. I mean, like if you talk about like The retail firms, Robinhood, um Tasty, IB, Thinkorswim, you know, Schwab, 70% of their business, 65% of their business is optional.

Wow. Options and futures are now like 85% of the industry. Nobody trades stocks anymore because stocks are really expensive. Yeah. You know, I mean, ha somebody can buy, you know, what are you gonna buy? A hundred shares of stock costs you fifty thousand dollars. The average account size fifty thousand. Mm-hmm. You can trade options for a couple hundred. Mm-hmm. Um, yeah. What what about um zero day options? Those obviously have become very popular. Yeah.

I mean wh why do you think that that is happening just because that's what people want it the most explicitness? Everything has the time frame for everything is is compressed. And the world's become like this. Speculative playground. People love it. I mean, like l for so many years, we shut down speculation because we're like, it's not good for you. You know, this like nobody realized all that the

unintended unintended consequences of speculation, which is really positive for wealth creation, for the economy, all this kind of stuff. And everybody was always Like speculation's bad. Well, it turns out and a lot of this is the meme stock twenty twenty one stuff, but it turns out speculation is actually really good and everybody likes it. And the zero days, perfect example. You know, all this crazy

participation in options and futures, event based trading, everything else, crypto. Um, people like speculation. What's wrong with that? Nothing. Nothing. I mean, listen, Robinhood built a nice business around it. What about prediction markets? Um

I'm mixed. Yeah, me too. Um I'm mixed for a couple of reasons. First I think there's a day of reckoning coming with the sports side of it because I the states there's gonna be a battle. Um there's gonna be an exchange battle, there's gonna be a states battle. But my real issue with prediction markets, it's it's it's kind of multifold, but besides the fact that they're binary, so they're not they're not strategic, right? And I like strategic finance.

is that they're expensive. So if you trade um$100,000 of stocks, like let's say you Apple's$250, you do 400 shares of Apple, that's$100,000. Your give up to theoretical with commissions, everything there's no commission. So your give up theoretical is$4,$8, less than$10. You trade$100,000 worth of a future, less than$10. Everything's less than$10. Stocks, options, futures. You trade$100,000 worth of event based stuff, prediction markets,$2,000.

Mm-hmm. And what, you think it'll just come down over time as price pressure or what? I mean it should, but I don't know. I mean there's really what, two major players, maybe a third that kind of competes in there as well. Yeah, I mean you'll have You know, in a short period of time, I mean you'll have DraftKings in there, they'll get they're already getting an exchange. You know, you'll have the C CBOEs launching theirs, the Mercs launching theirs.

Um then has to come down. You've got Kraken gonna launch theirs and and crypto dot com launching theirs, you know. I mean and then you've got obviously polymarkets and calci and you know, but There's going to be 10 of these ex 20 of these exchanges. Why not? You know, and then and then and then the brokerage firms, and my other issue with it is.

If you own a brokerage firm, the last thing you're going to do is give your customers to Calchi or give your customers to Polymarket. You work too hard for those customers. I don't like the fact that these exchanges take customers direct so they effectively compete. with the brokerage firms. Like a brokerage firm would never if a if an exchange, the CME took customers direct, we wouldn't route them business.

If Citadel took customers direct, we wouldn't give them any business. You know, everybody has their kind of lane. I don't like the fact that these guys are conflicted.

But do you think that changes over time? I think it does. Which way does it resolve? Well, I think they become exchanges. Yeah. So they basically they they say, hey, we're going to compete head on. Yeah. I mean they're going to say, listen, we're going to f we're a facilitator. Yeah. They have they have no they have no reason to take customers. Interesting.

See what happens. I the reason I don't like it as much as uh I don't know if we want people betting on like how long the press conference is gonna be or you know, what color someone's tie is gonna be or whatever, right? Or or if you're an investor in it and you you know and you're betting on yourself like Giannis or whatever, that kind of stuff. Well, I also think they're all they're all small time crooks. Like it's a small time crook business. Really? Yeah.

Like in what way? It's like the whole sports gambling market's tiny. relative to, you know, what they trade in in an hour on one of the listed exchanges, what they trade in a year on the sports exchanges. You know, they're all kind of just small. Yeah, they're just small. Do you think it gets big over time or no?

Maybe they're not strategic though. So I mean people everybody's just gonna lose all their money over time. You know, it's a it's a negative edge. It's not as bad as a casino or it's not as bad as uh a straight, you know, sports betting is right now, but it's going, you know, it's all gonna come it's all gonna contract. What about these people using the AI agents to go in oh, they're doing a lot on the prediction markets, but you think they'll do it in stocks too?

No. I don't I don't I don't I I think it's really hard. I mean, I've never seen it work. Yeah. I mean it's basically, you know, if you think of high frequency trading hedge funds, they're very good at it, but like they're pretty smart. They've got a lot of technology. They got a lot of you know, all that kind of stuff. But the average person

you know, on one hand you could make an argument, Oh, superhuman intelligence is gonna be better than smarter than all the hedge funds put together, blah, blah, whatever. On the other hand though, It's hard, right? Like if if it was so easy, people would arrest it. I I am friends with people that run some of the best high frequency firms in the world. I mean they're they're just you know, they're amazing.

And they're not using AI for that reason for that purpose at all. That's why I know it's not. They're they're using AI as as a monitoring monitoring tool and they're using it for a lot of other things and but they're not using it for for trading. I think The thing people are missing the most with AI is I think the industry that's gonna have the biggest impact in finance is the RIA space. Oh, explain that. Because so right now you've got this.

like massive RIA space. You know, like like we talk about like the active trading market. What is it? Maybe. Probably less. You talk about the money managed space. What is it? 50 trillion? Some probably it's it's thirty trillion with just like five firms. So what are you going to need an advisor for? Right now your advisor is a one-trick pony. They know what their firm tells them. That's all the research they have. That's what they do. Now they're going to have access to everything.

That's gonna create contraction and fees. What an advisor is gonna become is your is your empathetic buddy. Like your advice can become your hand holder. Like you wanna Go out to dinner, he'll take you out to dinner, or she'll take you out to dinner. You want somebody to call up to make sure that everything's cool? You can call them. They're gonna hold your hand. They're gonna, you know, they're they're gonna be there as your friend.

But you're going to pay them instead of 65 basis points, you're going to pay them 20 basis points. They're going to be smarter. They're going to have access to way more information. So the fees are going to come crashing down. Your advisor is actually going to be significantly better. And they're just going to be like this.

You know, this friend. Um, and I think it's going to upend that business a lot. It's gonna make the business better. Mm-hmm. But it's also gonna push a lot more people to understanding that the self directed side's also kind of cool.

I agree. I I think that the self directed thing um is additive. It is not uh extractive from the other. Could not agree more. Could not agree more. It's like these people weren't going to go work with financial advisors anyways, they're just now Expanding the pie. Could not agree more. Yeah. Interesting. All right. Uh you're giving away a million bucks.

Yeah, you want it? Uh sure. Yeah, I'll take it. Um I I don't know if I can get it, but uh explain that what people have to do. You can get some of it. You can get a little tiny piece. Lostdog dot com to sign up. Lostdog.com and then how do you think that's the thing? L O S S D O G Yeah. How do you determine who gets the money? Um it is based on a um whoever signs up first.

gets more money. So it gets all spread out over all the people that sign up. Every person gets something. Every person gets something. Okay. Oh for the first million people? No, the first fifty thousand. Fifty thousand. Okay. Every person gets something and the more referrals you make, You get more. Or you get moved up in the line.

Got it. So like you get like a ticket number for the number that you signed up. So if you're the thirty one thousand one hundred and seventy second person, you're that's your slot. That's your slot. But if you make referrals and you can jump people. You can jump people.

Interesting. Yeah, we're using a third party software for that, which is kinda cool. I mean, it's not the first time it's been done that way, but it's it's a nice way to incent people to give referrals. And yeah, I mean we're giving away a million dollars and it's in it's um you get You get Bitcoin, um, ether.

Solana and Stellar. You get a pick or you get all four? Um we were gonna let you pick, but then it got to be too confusing. So we just you get to equal amount of each of all four. Okay. And then uh how much does the number one person get? I think the top is like fifty it goes fifty, forty, thirty, twenty, ten. And so you get to a million. And then you just go from there. That's right.

Fifty thousand dollars? That's serious. Fifty dollars. Oh fifty dollars. Oh, because you had to go all the way down. I could go all the way down. Yeah. But a million bucks. That's a million dollars. It's real. Yeah. Well, it's a good way to think about it. Like if I went to go out and and market for this company, you know, I'd probably spend a million dollars marketing, right? So to seed it.

And so this way I'm like, okay, I'll do it. Just give it to people. I'll just give it to people. Yeah. It's like uh you're you're like the uh Mr. Beast of Finance. Speaking of him, I just read that he's going into finance. Did you read this? He bought step. Yeah. Yeah. Yeah. What do you think about that? I you know, like I missed that.

Like I don't n I've never really followed him. Yeah. May I'm just too aware. I don't watch the content, but very highly of him. Oh, I don't I don't do you know him? Uh yeah. Okay. Yeah. I don't know him. So I mean like I have nothing to say. I always tell everyone one story about him. He called me he called me one time and uh randomly. Yeah. Afternoon, mid middle of the week. And uh he goes, uh, yo pomp, teach me something.

Five minutes. Okay. We just uh we started talking, whatever. We navigated a bunch of weird topics. He was like, All right, I gotta go. Thanks, bye. Smart guy. Very, very smart. What's his real name? Uh Jimmy. Jimmy Donaldson. Yeah. Um he uh

The reason why step is interesting. I talked to uh I think CJ is the uh is the founder of that. Yeah. And um it's focused on helping like kind of teens start to build first bank account, first you know, build credit, all that kind of stuff. So it makes sense for uh you know, Jimmy's audience.

Yeah. I mean listen, I'm I'm sure he'll be successful. I I just don't know enough about it. Yeah, different business. You know. All right. Lostdog dot com. Yeah. L O S S S D O G dot com giving away a million bucks. Yeah. I mean, uh that's better than anyone. Could be worse. Yeah, it could be worse. A lot of a lot of people you gotta sign up for something and pay them money, right? Oh plus they give away the subs the the platform's free.

Oh, okay. So free free platform plus you get some money. Yeah. Yeah. The platform's totally free. Hey, don't say I didn't do anything for you guys on this podcast. You know, free money. Lostalk.com. Thank you for coming again. Do it again in the future. Thanks so much, man.