Fast 35% win while the world panics (+ a $1.8T problem nobody's watching)

I paid 80 cents on a Starbucks In/Out spread. This morning I sold it for $1.08. Done.

35% profit in one day. 

Meanwhile, oil is ripping, and the tape is whipping in every direction. None of it mattered. I knew the expected move. I knew the range. I traded it, took the money, and moved on.

That is how you survive a market like this. Fast. Defined risk. 

You do not need to be right about Iran. 

You need to know what the options are pricing in and trade within that range. The expected move tells you exactly what the market thinks is possible today. Use it.

Now here is what I was watching while that Starbucks trade was on. A story that broke this morning and has nothing to do with oil. And unlike Iran, this one does not resolve on a headline.

Blue Owl Capital just disclosed the numbers on their private credit funds. Private credit is money lent directly to companies by investment firms, not banks. 

It became one of the hottest asset classes of the last decade. A $1.8 trillion market built on the promise of better yields and patient capital.

The patience is running out.

Investors in Blue Owl's flagship $36 billion fund asked for 22% of their money back in the first quarter. 

That is up from 5.2% the prior quarter. Their $6 billion tech-focused fund saw investors ask for 41% back. Blue Owl capped both funds at 5%. The rest is locked. Investors who wanted out are not getting out.

Not just Blue Owl. Ares saw 11.6% redemption requests. Apollo saw 11.2%. BlackRock-owned HPS saw 9.3%. One executive inside the industry said we are in peak redemption mode. Peak.

Now look at who is sitting near lows today while everyone is talking about Iran. Blackstone. BlackRock. KKR. None of them are oil companies. This is a different problem entirely.

The tech fund is the part that gets me. It is getting hit not because of the Strait of Hormuz. 

Investors are nervous about AI disrupting software companies that borrowed heavily from these funds. That concern does not go away when there is a ceasefire. It exists completely independent of anything happening in the Middle East.

So yes, maybe Iran gets resolved. Maybe the Strait opens, oil comes off, the S&P catches a bid. Fine. Great.

You still have $1.8 trillion in private credit being tested for the first time. 

Investors locked out of funds they thought were liquid. Redemption requests rising every quarter for three straight months. That does not get fixed on a Sunday night tweet.

My approach in a market like this: stay nimble. Use the expected move to define your range. 

Know what options are pricing in for the day and the week. Do not overhold. Take the trade, book the gain, move on. Defined risk, fast exits, no heroics.

The Iran trade is the obvious one. The private credit story is the one worth watching after Iran is over.

To your success,

Don Kaufman 

P.S. I’ve been racking up wins trading 0dte options for the last several weeks using the expected move. Each week, I lay out 3 0dte trades to my members. If you want to start receiving them, click here.