If our goal is to end up 22 contracts for Arryn by the bottom of the correction and our initial entry was 30% at the $586 level then shouldn’t the number we should’ve purchased 22*0.3 = 6 contracts instead of the 9 contracts we purchased? Purchasing 9 contracts put us at 40% of our desired contract count. Am I missing something?
So this math was very back of the napkin math. We didn’t consider the change in value in the leaps.
As the QQQ drops in value, the leaps will also drop in value which means we will end up with more than 22 contracts. It’s hard to tell right now, but we will probably be closer to 25 contracts.
So what we did didn’t bake into the math is the fact that we have an additional 40,000 in cash that’s sitting inputs right now.
Closing the March and June put would give us 20,000 and when we close out a portion of the September put, we will get another 20,000 Assuming an average exit of around 25
That puts us at around 215,000 in cash and about 70,000 of that is what we bought today
The math is a little different for each portfolio. Relative to the portfolio it was about a 28% 29% position. Relative to the size of the position we ultimately taking it’s probably around a 33% position.
What do you think of some names like CRWV, BULL, CRCL, and MSTR? These names are a few major ones that have gone down SIGNIFICANTLY in the past month (I believe related to crypto holdings as well). But, do any of these look like they may be prospective to you to add to the long term portfolios?
So we’ve slowly shifted to simply just buying the QQQ and being long tech essentially. Like with the QQQ, we have very clear-cut visibility and stability. We know the market constantly moves higher and we complete hedge out company risk by going in that direction.
there’s no thing wrong with adding individual names like that and there’s a good chance they’ll outperform. PLTR for example, after a beating, will probably outperform.
I don’t know enough about any of those stocks to be confident enough to invest in them long-term.
So I’m now in my 28th year as investor. As I’ve gotten older, I’ve moved further and further away from individual stocks and more toward simply buying the QQQ ETF and capitalizing on its predictability.
With individual stocks, you can pick one that goes nowhere or that fails. If one fails in the QQQ, it doesn’t matter becuase there are 99 other stocks pulling the sled.
Even this past year, I’ve found it difficult to justify getting long Nvidia unless it has taken a true beating.
As we showed, there was a pint for a very long stretch where our QQQ leaps outperform our Nvidia leaps. That’s even with Nvidia rallying from $86 to $200.
When we bought the Nvidia $100 leaps at $40 they moved up to $120-$130 I think.
The QQQ January 2027 $400 calls that I bought in my portfolio back in April went from $70 to $230 recently. I didn’t even check them at $637. I’m sure they were sitting at like $250.
So why buy the Nvidia leaps at all? The QQQ leaps just went up 250%. Same as the Nvidia leaps.
The Nvidia leaps had very high expectations built in at cost. At $100 for Nvidia and they’re trading at $40 means the option market expects Nvidia to climb at least 40%.
The $400 QQQ leaps trading at $70 meant the market expected the QQQ to only rise by 17.5%. That’s how they’re able to out-perform in the same rally.
So when consider the cost of leaps and their performance relative to individual stocks, I often find it difficult to find a strong reason to buy individual stocks unless I’m very confident in my understand of the situation.
And in most cases, waiting for oversold conditions is probably the right place to buy.
Joey
November 21, 2025 6:02 am
Are you still planning on calling the bottom as you usually do, using the big three indicators: NYMO, VIX, and Daily RSI? I know you’re going all in at ~10% mark, but personally, if we get there, I’ll be 50% long and was planning on waiting on you to call the bottom (as you’ve done so well in the past) to buy the other 50%.
So as a reminder, there’s no guarantee that the market will get that oversold. So the key thing to understand with respect to bottoms is we can identify them when they happen. When a major event occurs, we can almost always identify it as the bottom in the market as capitulation. What we can’t often identify — and this is why we buy in layers — is those times the market decides to prematurely bottom without ever reaching extreme.
Example:
February 2023 = no extremes, premature bottom (-10%)
July 2023 = no extremes, premature bottom (-11.5%)
March 2024 = no extremes, premature bottom (though 30-RSI & 8% drop)
July 2024 = capitulation bottom
April 2024 = capitulation bottom
In February 2023, July 2023 and March 2024, we never saw extremes. What we saw was a correction that had extended to its typical average sell-off AND in some cases, the RSI dropped to 30.
We’ll buy in parts as the QQQ comes in and if we ever get to capitulation, then that’s where we’d go 100% long.
We’d need the QQQ deeply oversold on the daily chart for that to happen.
I think you mentioned it before but what exactly makes a drop capitulation vs. a regular drop? Is it just a huge gap down greater than a certain percentage? Does RSI also play a part or are they independent?
So here’s how you can judge capitulation by the numbers:
Daily RSI Reaches 18-22
The $NYMO reaches -100
The $VIX Reaches an 80-90-RSI on the daily
I’d say those are the three main components to capitulation from a numbers perspective. So yeah, it’s very heavily dependent on RSi.
Capitulation is also an emotional state that you can sort of get a feel for. It typically happens on a Monday to start the week or on a Friday afternoon as we head into a weekend. Mondays are more likely.
Festering negativity over the weekend after a bad prior week. You then end up with a ridiculous gap-down.
IN April, the QQQ gapped down some monster numbers right. In the pre-market it was trading at $389. It did recover a lot before going into the open of trade, but it was still pretty brutally down and quickly recovered.
Could you remind me the parameters the “usual” samwise strategy is to buy the hedge? Is it a 3% or 6% bounce? Obtained from selling a few calls that were bought at the bottom, right?
So in cases where we get a capitulation bottom and we go 100% long, we usually wait for about a 10% bounce before buying a hedge. Last time – in April — we waited for a 15% bounce from $400 to the $460’s.
Could you elaborate on why 9.2% is an important enough % for us to dollar cost average into the position? 9.2% vs. 10% are so close together that I’d imagine our cost basis won’t decreased by very much.
It’s a mix of correction drop and RSI. We’re looking at both as guidance. Ideally, we want to be fully invested at a 30-RSI and fully hedged. IF the QQQ then decides to roll over, well then that’s when we scale out of the hedge and into more leaps.
The initial position was about mitigating the risk of a smaller than expected correction. Once we’re in that position we’re no longer worried but that. That “what if it’s smaller than 8%” idea is no longer in our thinking at all. Because we’ve already addressed it with a relatively big position.
So now we use RSI + percentage loss as a guide for our final entires. So realistically, it might be entry at $579 and final entry at $570. So really it’s 9.2% and 10.5%. Those would be the next entires.
The QQQ is not going to stop at number like $574 or $573. It wi’ll get down to $570.70 at the bottom or $569.43 or something along those lines. It will test the next 10’s level before bottoming.
Could you go over the rationale behind having a smaller scale-in allocation for the 9.2% vs. 8%? Wouldn’t you want to scale-in MORE as the % goes higher rather than the other way around? Looks like we do increase our allocation % to 50 once we get to 10% so it seems like the allocation “ladder” is more heavily skewed at 8% and 10%.
Correct me if I’m mistaken here, but looks like there is a potential typo in your Arryn portfolio breakdown:
First, we’d need to close out the Nvidia June 90 puts and March 2026 $400 puts and add $786 + $4,880 to our cash position. IN total, we’d now have $205,165 in cash right? Position breakdown would be:
Gemini 3 has just been released, and Google is running it on its own TPUs. For me, this is one of the reasons for the Nasdaq’s fall.
The first benchmarks place Gemini ahead of OpenAI models on Nvidia GPUs.
I’m currently testing Gemini 3 Pro against gpt-5.1-pro on very complex problems, and I have to admit I’m blown away.
The market has already priced in over $500 billion in capital expenditures and tens of billions in commitments to a few players overexposed to GPUs, fueled by favorable accounting practices highlighted by Burry (extended amortization periods of 4 to 7 years) and cross-deals that artificially inflate results.
In a single day, Google has shown that the GPU narrative can crumble very quickly. Grok has also released its new version, which is incredible.
On the plus side, it’s a heavy user of NVIDIA GPUs. I’m simply noting that Peter Thiel and SoftBank sold off Nvidia while Warren Buffett was buying Google. You rightly pointed out a few weeks ago that certain news items, like Deepseek at the time, would break and trigger a market downturn and panic.
I completely agree with you, and I think we’re only at the beginning.
If we trim our hedge position from 30 to 22 contracts and use the rest of cash to allocate to the leaps we’ll end up with 9 contracts (current allocation) + 17 contracts ($141,805 / ($80.0 * 100)), ending up with a total of 26 long leap contracts to our trimmed down 22 hedge contracts. Does the mismatch in contracts size between calls and puts matter much in this case or are they “close enough”?
So what we probably will do is buy a new hedge down that line that will be 1-to-1 ratio.
If the QQQ bottoms when we are fully long, then it doesn’t matter because the QQQ will be rallying.
If the QQQ doesn’t bottom and goes lower, well then our puts will go up in value generate more capital to be used long. We’ll end up 100% long hopefully near the lows.
Then on the rebound, we’d reduce our long call positions and use the capital to buy a new put position.
Let’s discuss Targaryen and Baratheon. Here’s my view on their future configuration.
You’ve mentioned the idea of eventually merging both into the regular portfolio. While I agree with your rationale for Baratheon, it definitely makes sense,
I’m not convinced the same logic applies to Targaryen. Personally, I’d prefer keeping Targaryen separate.
Here’s why:
1. Targaryen is meant to be a challenge, and it’s allowed to fail. That’s part of its nature and part of the fun.
2. The size constraint matters. As long as someone holds no more than 1× Targaryen, the risk is controlled. But if we merge it into something like Stark, where people may hold multiple units, it would end up with a much larger allocation than what makes sense for a “challenge-style” position.
Also, even if the next Targaryen trade fails, I don’t think it should be “killed.” I’d be perfectly fine with a reset, respawning it with a fresh 5K and calling it Challenge Attempt #2.
Agreed. I was looking forward to watching the challenge play out. It’s unfortunate that it got a rough start, but I would also support a second attempt, if needed.
By
/ November 20, 2025 
Hi Sam,
If our goal is to end up 22 contracts for Arryn by the bottom of the correction and our initial entry was 30% at the $586 level then shouldn’t the number we should’ve purchased 22*0.3 = 6 contracts instead of the 9 contracts we purchased? Purchasing 9 contracts put us at 40% of our desired contract count. Am I missing something?
Thanks!
So this math was very back of the napkin math. We didn’t consider the change in value in the leaps.
As the QQQ drops in value, the leaps will also drop in value which means we will end up with more than 22 contracts. It’s hard to tell right now, but we will probably be closer to 25 contracts.
So what we did didn’t bake into the math is the fact that we have an additional 40,000 in cash that’s sitting inputs right now.
Closing the March and June put would give us 20,000 and when we close out a portion of the September put, we will get another 20,000 Assuming an average exit of around 25
That puts us at around 215,000 in cash and about 70,000 of that is what we bought today
The math is a little different for each portfolio. Relative to the portfolio it was about a 28% 29% position. Relative to the size of the position we ultimately taking it’s probably around a 33% position.
Sam,
What do you think of some names like CRWV, BULL, CRCL, and MSTR? These names are a few major ones that have gone down SIGNIFICANTLY in the past month (I believe related to crypto holdings as well). But, do any of these look like they may be prospective to you to add to the long term portfolios?
Thanks!
So we’ve slowly shifted to simply just buying the QQQ and being long tech essentially. Like with the QQQ, we have very clear-cut visibility and stability. We know the market constantly moves higher and we complete hedge out company risk by going in that direction.
We cover this here:
https://sam-weiss.com/samwise/samwise-strategies/high-pro/
there’s no thing wrong with adding individual names like that and there’s a good chance they’ll outperform. PLTR for example, after a beating, will probably outperform.
I don’t know enough about any of those stocks to be confident enough to invest in them long-term.
So I’m now in my 28th year as investor. As I’ve gotten older, I’ve moved further and further away from individual stocks and more toward simply buying the QQQ ETF and capitalizing on its predictability.
With individual stocks, you can pick one that goes nowhere or that fails. If one fails in the QQQ, it doesn’t matter becuase there are 99 other stocks pulling the sled.
Even this past year, I’ve found it difficult to justify getting long Nvidia unless it has taken a true beating.
As we showed, there was a pint for a very long stretch where our QQQ leaps outperform our Nvidia leaps. That’s even with Nvidia rallying from $86 to $200.
When we bought the Nvidia $100 leaps at $40 they moved up to $120-$130 I think.
The QQQ January 2027 $400 calls that I bought in my portfolio back in April went from $70 to $230 recently. I didn’t even check them at $637. I’m sure they were sitting at like $250.
So why buy the Nvidia leaps at all? The QQQ leaps just went up 250%. Same as the Nvidia leaps.
The Nvidia leaps had very high expectations built in at cost. At $100 for Nvidia and they’re trading at $40 means the option market expects Nvidia to climb at least 40%.
The $400 QQQ leaps trading at $70 meant the market expected the QQQ to only rise by 17.5%. That’s how they’re able to out-perform in the same rally.
So when consider the cost of leaps and their performance relative to individual stocks, I often find it difficult to find a strong reason to buy individual stocks unless I’m very confident in my understand of the situation.
And in most cases, waiting for oversold conditions is probably the right place to buy.
Are you still planning on calling the bottom as you usually do, using the big three indicators: NYMO, VIX, and Daily RSI? I know you’re going all in at ~10% mark, but personally, if we get there, I’ll be 50% long and was planning on waiting on you to call the bottom (as you’ve done so well in the past) to buy the other 50%.
So as a reminder, there’s no guarantee that the market will get that oversold. So the key thing to understand with respect to bottoms is we can identify them when they happen. When a major event occurs, we can almost always identify it as the bottom in the market as capitulation. What we can’t often identify — and this is why we buy in layers — is those times the market decides to prematurely bottom without ever reaching extreme.
Example:
February 2023 = no extremes, premature bottom (-10%)
July 2023 = no extremes, premature bottom (-11.5%)
March 2024 = no extremes, premature bottom (though 30-RSI & 8% drop)
July 2024 = capitulation bottom
April 2024 = capitulation bottom
In February 2023, July 2023 and March 2024, we never saw extremes. What we saw was a correction that had extended to its typical average sell-off AND in some cases, the RSI dropped to 30.
We’ll buy in parts as the QQQ comes in and if we ever get to capitulation, then that’s where we’d go 100% long.
We’d need the QQQ deeply oversold on the daily chart for that to happen.
I think you mentioned it before but what exactly makes a drop capitulation vs. a regular drop? Is it just a huge gap down greater than a certain percentage? Does RSI also play a part or are they independent?
So here’s how you can judge capitulation by the numbers:
I’d say those are the three main components to capitulation from a numbers perspective. So yeah, it’s very heavily dependent on RSi.
Capitulation is also an emotional state that you can sort of get a feel for. It typically happens on a Monday to start the week or on a Friday afternoon as we head into a weekend. Mondays are more likely.
Festering negativity over the weekend after a bad prior week. You then end up with a ridiculous gap-down.
IN April, the QQQ gapped down some monster numbers right. In the pre-market it was trading at $389. It did recover a lot before going into the open of trade, but it was still pretty brutally down and quickly recovered.
Ahh gotcha, so it’s the combination of the big three indicators
Could you remind me the parameters the “usual” samwise strategy is to buy the hedge? Is it a 3% or 6% bounce? Obtained from selling a few calls that were bought at the bottom, right?
So in cases where we get a capitulation bottom and we go 100% long, we usually wait for about a 10% bounce before buying a hedge. Last time – in April — we waited for a 15% bounce from $400 to the $460’s.
Hi Sam,
Could you elaborate on why 9.2% is an important enough % for us to dollar cost average into the position? 9.2% vs. 10% are so close together that I’d imagine our cost basis won’t decreased by very much.
Thanks!
It’s a mix of correction drop and RSI. We’re looking at both as guidance. Ideally, we want to be fully invested at a 30-RSI and fully hedged. IF the QQQ then decides to roll over, well then that’s when we scale out of the hedge and into more leaps.
The initial position was about mitigating the risk of a smaller than expected correction. Once we’re in that position we’re no longer worried but that. That “what if it’s smaller than 8%” idea is no longer in our thinking at all. Because we’ve already addressed it with a relatively big position.
So now we use RSI + percentage loss as a guide for our final entires. So realistically, it might be entry at $579 and final entry at $570. So really it’s 9.2% and 10.5%. Those would be the next entires.
The QQQ is not going to stop at number like $574 or $573. It wi’ll get down to $570.70 at the bottom or $569.43 or something along those lines. It will test the next 10’s level before bottoming.
Hi Sam,
Could you go over the rationale behind having a smaller scale-in allocation for the 9.2% vs. 8%? Wouldn’t you want to scale-in MORE as the % goes higher rather than the other way around? Looks like we do increase our allocation % to 50 once we get to 10% so it seems like the allocation “ladder” is more heavily skewed at 8% and 10%.
Thanks!
Hi Sam,
Correct me if I’m mistaken here, but looks like there is a potential typo in your Arryn portfolio breakdown:
Looks like it should be $125,165 in cash instead.
The three paragraphs were all rewritten for clarity including that typo there.
Sam
Gemini 3 has just been released, and Google is running it on its own TPUs. For me, this is one of the reasons for the Nasdaq’s fall.
The first benchmarks place Gemini ahead of OpenAI models on Nvidia GPUs.
I’m currently testing Gemini 3 Pro against gpt-5.1-pro on very complex problems, and I have to admit I’m blown away.
The market has already priced in over $500 billion in capital expenditures and tens of billions in commitments to a few players overexposed to GPUs, fueled by favorable accounting practices highlighted by Burry (extended amortization periods of 4 to 7 years) and cross-deals that artificially inflate results.
In a single day, Google has shown that the GPU narrative can crumble very quickly. Grok has also released its new version, which is incredible.
On the plus side, it’s a heavy user of NVIDIA GPUs. I’m simply noting that Peter Thiel and SoftBank sold off Nvidia while Warren Buffett was buying Google. You rightly pointed out a few weeks ago that certain news items, like Deepseek at the time, would break and trigger a market downturn and panic.
I completely agree with you, and I think we’re only at the beginning.
If the panic starts, it could escalate quickly.
Hi Sam,
Question about the Arryn allocation strategy.
If we trim our hedge position from 30 to 22 contracts and use the rest of cash to allocate to the leaps we’ll end up with 9 contracts (current allocation) + 17 contracts ($141,805 / ($80.0 * 100)), ending up with a total of 26 long leap contracts to our trimmed down 22 hedge contracts. Does the mismatch in contracts size between calls and puts matter much in this case or are they “close enough”?
Thanks!
So what we probably will do is buy a new hedge down that line that will be 1-to-1 ratio.
If the QQQ bottoms when we are fully long, then it doesn’t matter because the QQQ will be rallying.
If the QQQ doesn’t bottom and goes lower, well then our puts will go up in value generate more capital to be used long. We’ll end up 100% long hopefully near the lows.
Then on the rebound, we’d reduce our long call positions and use the capital to buy a new put position.
At the moment, it does’t matter all that much.
Let’s discuss Targaryen and Baratheon. Here’s my view on their future configuration.
You’ve mentioned the idea of eventually merging both into the regular portfolio. While I agree with your rationale for Baratheon, it definitely makes sense,
I’m not convinced the same logic applies to Targaryen. Personally, I’d prefer keeping Targaryen separate.
Here’s why:
1. Targaryen is meant to be a challenge, and it’s allowed to fail. That’s part of its nature and part of the fun.
2. The size constraint matters. As long as someone holds no more than 1× Targaryen, the risk is controlled. But if we merge it into something like Stark, where people may hold multiple units, it would end up with a much larger allocation than what makes sense for a “challenge-style” position.
Also, even if the next Targaryen trade fails, I don’t think it should be “killed.” I’d be perfectly fine with a reset, respawning it with a fresh 5K and calling it Challenge Attempt #2.
Agreed. I was looking forward to watching the challenge play out. It’s unfortunate that it got a rough start, but I would also support a second attempt, if needed.