YouSaid · the spoken record

Charlie McElligott

lines on the record: 35
first: 2026-02-06
most recent: 2026-02-06
sittings or episodes: 1
sources: podcast

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“But I can't just be long equities, but I need some yield and I'm a boomer. I'm old. I need some enhancement. But I want equities upside. And we've talked about this so many times. And it's true because the assets keep growing. All these yield enhancement vehicles, all these income vehicles, they're selling equity optionality. So your long underlying equities, you cap that upside to a certain extent, but you're generating yield by selling options. That's the new fixed income. And those flows matter because those flows that when the kind of the coast is clear, they just come in and it's just Vegas supply and it just smashes all back down.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“It's more about these flows kind of stopping the bleeding, but this is the other thing, too. Like the vol flows are so important with regards to the hedge unwinds and creating the turn in the market, the inflection, especially with conditioning by the dip cell, the vault rip, that like fixed income has been Trash for five years since the tightening cycle, since poor inflation still running too hot, right? So people said, look, this thing doesn't work for me. It's not helping my portfolio. My 60-40 is awful, right?”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“And Vall Startharts rolling over, and guess what? Then the systematic, the Vall supply people come out of the woodwork and they feel comfortable to come back in, lean into this. And that's de facto by the dip, right? So this is the cycle in the world that we live in. There's too many asses. This is a final point that may be tangential here. But with regards to how these dynamics end, it's not necessarily about like back in the day, it's like Warren Buffett steps in, you know, provides some financing line or, you know, Toma Bravo stepping in, doing some deal.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you're getting certainly some relief here. Don't really have to do anymore. You don't have to reach for hedges, which get dealers short gamma, right? Because the first step people then have to monetize their hedges. That's the way all of these reversals happen. You take off your hedges or you take off your directional stuff, whether you're shorting futures against the moves or you're buying downside puts, you're buying VIX calls. You start to unwind that. And guess what? Like now the dealer has got to take off their stuff and you got Delta to buy. And then some people say, oh, everybody's taking their hedges off around the street and market's starting to rally off these lows. I'm going to buy some zero DTE calls. And, you know, then you create more Delta to buy.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“For academic history studying these things because of like greed and fear and things like that. And moves can extend longer than you think just because a trade is crowded doesn't mean it's the wrong trade. But when you start to layer in, as I said, the positioning data, the overall leverage data, the kind of the conversational qualitative how many people are buying into this, but then you see some like divots here and there and like the stories, that doesn't actually make sense. And actually this thing is starting to stall. And now I got people taking money out of this thing and I got trends this loaded into it. This is going to unwind hard. And I sent that note Thursday, started unwinding hard Friday doors got blown off and guess what it waterfalls so other crowded trades go Cosby everybody was like you know no brainer into that Japanese bank longs right which are a short JGB proxy macro tourism like people start coming out of these trades because they're non-core but they were high sharp”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“The world is not built the vast majority of the time for me in reversion anymore. Value is mean reversion. Like something is rich, something is cheap. It's this counter kind of like a gamma type of a flow, a long gamma type flow. We feed moves now because of the risk management dynamics and especially too, just like market structure, how much trend there is built into the market, leveraged DTFs, options, things like that, particularly the way that people tend to use them, which is kind of to feed into prevailing moves. So, all of this kind of changes the behavior and the expected outcomes where momentum has been this remarkable factor.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“It's crowding plus the trend plus the optionality plus the leverage DTF. The optionality is leverage in and of itself. And it's Hi Beta, you know, as is to regular, you know, Big Brother Gold. So these moves are wild, but we know that in the era of the speculative era, people seek the movement. That's the opportunity. You are not going to retire. 4% in cash. You know, that's just the way this world works right now. Now, you know, do you necessarily need to be like shorting vol or things like that? That's not the way to do this. But people yellow. It's that financial nihilism that we've spoken about many, many times. You seek out the movement. You want the stuff that's moving. And generally speaking, and this is where it's so interesting, like you try to press moves by and large, certainly like the retail cohort.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, for sure. And I mean, you got to have titanium stomach. I've been talking to a buddy all week at a multi, you know, this absolute. Madman, and there's many others like him. You know, he's been shorting silver the last two weeks. I'm like, how have you been sleeping, dude? I was like a little better now, but there's”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“An exposure target, you know, a leverage target. And if the volatility is five and your volt target is 10, you got to lever that two times or 12. And that is, ironically, the lower vol goes, the more you need to add leverage onto that position To match your target. And that's why that's the problem. We create crashes because all of modern, anybody who's like on a var model is actually a momentum trader. Right, you have to deleverage when Vall goes higher by and large. Now, of course, if you have a high conviction bet and Vol goes higher, that's actually going to be part of your potential return profile. That's great. God knows people have learned to like, you know, sell rich vol and buy, you know, buy dips. It's become conditioned, these time horizons are like hours at this point. But like.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we're talking about wide swaths of strategies and active systematic versus feel directional trading. Tight stops are typically that down 2%, kind of down one and a half percent, maybe even in some cases. But that's why it is managed so microscopically and you're extracting these basis points of alpha in your longs and shorts. And then using leverage. Like a market neutral is probably 200, 300% gross by and large. Like long short was always kind of like 50 net, 150 gross something to that extent, but they're just not as big of a player anymore. But, you know, that's the trick here. Like when I start seeing, I always love the systematic stuff because it's so tied in. It kind of looks a lot like the options market. And market structure by and large feeds momentum now, right? You're not scaling out of positions the more they trend. You're loading into them. So like whether it's target volatility or CTA or you assign a”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“The Titan market neutral stopouts, you know, with all that leverage, with all that AUM, to get their factors right. Because at the end of the day, those guys are not trying to make factor bets. There's scenarios where you maybe run even a little net if there's like a big economic reacceleration trade or something like that. But generally speaking, the idea is like we don't want beta to the S&P. That's the point. That's why people pay us. Stop comparing us to S&P returns. So all these things are part of this like backdrop plus the narrative overshoots to me.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Hard and fast, unemotionally. But guess what? It's retail. It's all the story stocks. It's all these themes. That's why I pointed out for the last two years of the boom in leveraged ETFs. Like 82% of the assets in leveraged ETFs, which act like synthetic negative gamma, right? The higher you go, the more you have to buy at the end of the day, the lower you go, the more you have to sell, massive pool of AUM now because of like retail, you know, tilted speculative leverage behavior are tied into that concentric circle of AI, megacap tech, semis, you know, disruptor crypto. So we're super overweighted, super overindexed to that stuff, which amplifies when you have”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“In the absence of a hot economic cycle, you know, but also too, when you started seeing defensives join in that rotation, like it was this massive value overgrowth trade. And that's the three, four, five, z-score types moves that you're talking about where people didn't have that stuff on and your lungs go against you and your shorts go against you and that is also amplifying these kind of moves because look it's not just the market neutrals like they're not boogeyman here they're unbelievable they barely lose money ever on a monthly basis they just have very disciplined tight stops to get out of these liens and tilts”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“The reversal that we saw when people said, Look, I'm too much exposure in secular growth, Megacapt, AI, which gives you a lot of momentum exposure, unintended kind of exposures that when people said, I need more economic sensitivity, I'm taking up my cyclicality, right? The three best performing sectors kind of year to date for most of the year have been like energy, materials, industrials, stuff that people have kind of been underweighted for the longest.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Due to this kind of where the dollar flows have been, the market neutrality, the fact that there's always this offset against it, you're not getting core shocks. And when you don't get core shocks necessarily, at least initially, because Vall did not really react until just like two days ago. And yesterday Volvol got a little tricky too. But, you know, point being, you need correlation as an input to higher vault to like sustain. And you're just not getting that. You still have low core. Now, the trick is, to your point, Tracy, it's very interesting. You mentioned the defensives.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, very much the opposite of what last year was, which was this crazy concentration of like top decile, bottom decile, just spread 99th percentile like a 10-year basis, which feeds into why people are loaded into momentum, right? The higher stuff keeps going higher. It's human nature. This is like famine French. This is factor alpha, you know, commoditized alpha. So these things, I think.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“The tilts go wrong, that you have the offsetting short on the other end, right? It's not just you stop out of your net longs or your crowded longs, right? It's that you're also, you know, theoretically an equal dollar amount on the short side being covered. And what ends up happening on like the two big down days this week, it was like 250 stocks were up, 250 stocks were down. So you're getting this like reverse dispersion.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't take this drug if you're allergic to this drug. So the point here being that, you know, you would see kind of like a risk on risk-off type of core one phenomenon, you know, in past era. Part of what is happening now in my mind with these little bit of fragmented bullet points triangulating here is the fact that the dollars and the leverage controlled by the market neutral multi-strat equity space are so overwhelming in the sense that when you get when you are forced to de-risk or degross”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Point I'm making here, and multistrats are unbelievable with regards to their low volatility, with regards to the consistency of their returns, with regards to the disciplined risk management, the tight stops model, the non-correlated returns, which is the whole story why people keep allocating into them. They've proven to be such an absolutely undeniable force, hence all this dollar flow. But think about it like this. We don't see the core ones anymore. And this is like. Core ones meaning like when things shock everything trades up together or down together, right? And that was kind of the old state of the world. But now what we tend to see, and this is exactly what we saw earlier this week when you had, you know, of course, financial market returns are not on a normal distribution. But for, you know,”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly being sticky. And I think it comes down to where the money has flowed with regards to the hedge fund space is that, you know, maybe 10, 15 years ago, the long short universe, you know, running net exposure was, I don't want to say, you know, necessarily dollar for dollar like axed or necessarily larger than, you know, the multi-strats at the time, but like they ran net and they would lever up positions or they would hedge their longs and they were, you know, generally speaking, there was buyers volatility with those guys to a certain extent. You know, if you look back kind of on the sort of, let's say, five out of ten years of dollar flows into the hedge fund space with regards to all new flows, multistrats are conservatively 80 cents of every dollar in. And then if you actually include outflows from other strategies, you're legitimately through $1.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this is absolutely topical, and it's something that we continue to get questions on over the last few years, that generic, like, why is Val so low? And low vol or high vol is incredibly subjective. It's about the vault surface. It's about skew. It's about where the starting point was, where you've moved from, how quickly it's art plus science. Part of the problem with vault in general.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Did the end around with regards to where we thought it was going to come, but we can handle a couple things at once. You know, all of a sudden you get a little bit of a surprise with regards to the Fed chair, dollar stabilizes. You already had people in all these short dollar trades. People start taking money out of, you know, gold upside, silver upside. They start taking off some EM upside. And at that point, like last Thursday, I'm looking at grosses. I'm looking at our CTA trend net exposures and commodities and metals, 98th percentile and looking at our net short dollar exposure, zero percentile. Look at our net equities exposure, 97th percentile. I'm saying. These are the qualitative things I need to see where profit taking and monetization turns into a risk management exercise”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Now it's also become a backdoor credit story where it's not simply the spread widening from the hyperscalers, it's people worrying now about private credit exposure. The BDC guys, which are sitting on a lot of this stuff with really tricky valuations and not a lot of like buffer room with gross covenants and things like that. So it's become a huge macro story. They kind of”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“It's kind of like straight up overlap. And, you know, in the sense, you can't sell, you're kind of being haircut 10%. It feels like every week right now with regards to do I have a job? What are the prospects? Where is this industry going? And what do you have to sell? You know, and I think that's why it is trading tick for tick year to date with SaaS software. And it's quite remarkable. And that to me, as I step back to this large conversation, It's not really about the basement. This is a digital phenomenon. This is a liquidity crunch.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“No, it's not, it doesn't make you feel really good. But here's the thing. As anthropic has done their thing. And I mean, bang, you guys are in it right now with regards to Claude and the implications of vibe coding and a whole reset with regards to certain industries and taking out even if it's just the basic level of like legal compliance documentation and we've seen it start to hit bottom lines with regards to earnings mentions and things like that. That is happening so fast that software is going through this existential crisis. And here's the deal those dudes are stuffed on restricted shares. They're stuffed on RSUs. And the concentric circles of VC boys and tech boys and Sasbros and Bitcoin bros has a lot of overlap.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“We were all kind of watching this potential for the credit markets to become a headwind, not in a shock, not in a freeze, you know, not in anything close to a systemic dynamic, just too much supply with spreads too tight. You're not being compensated for it. So like there was kind of this general shortened credit because guess what? The whole world is watching one in like baby footsteps can oracle get their funding done. That was the one day we had a sigh of relief this week, by the way. They got 25 billion of investment grade done plus converts. With like $129 billion of demand. The market huge exhale. But guess what? Open AI is still in the background somewhere. We're like kind of sort of in the next two months they got to come up with like anywhere from 100 to 200 billion bucks. And that is still a major point of skepticism.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Many years ago in an interview, he's like, actually, when you start to see the cash turn into CapEx spend, there's usually kind of a point of agitation. It's not always in the right direction for equities, let's say, right? And in this case, I think we're starting, obviously, we're starting to get that, but the credit point is critical because the pace of the CapEx kind of prisoner dilemma that we're still seeing right now like yesterday's earnings releases, the magnitude of that supply in the investment grade market. Is simply going to widen spreads. Tech is a big part of that. Now, this is the punchline, bringing it back to software, bringing it back to Bitcoin.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, 100%. I mean, ironically, that's probably a separate podcast, but remember, we used to kick and scream like, oh, QE, this is crazy. Like this malinvestment, like they're bringing debt for buybacks and they're not doing R&D and they're not spending CapEx. They're not building plants. Well, here you go. Drux said something like this.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Two, you're burning through your cash and you're no longer buying back stock as this wall shock absorber and passive binner to the market from kind of sort of a quarter to a third of the overall S&P's buyback that you're then too having to take on this new debt. You take on new loans to a certain extent you're trying to lever the balance sheet. But more importantly, what does that mean for credit? Credit has been this perpetual kind of vault bleed. Because spreads are so tight. Credit just doesn't. People have issues.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, that's the trick, right? So, like, you aggregate kind of like the MAG 7 or like, you know, maybe the 12 biggest kind of like AI contingent types of players, you're talking like 20 to 30% of the overall S&P 500 buyback. So that's a huge point for me because I've made this before buybacks are like seven to eight X, the largest source of demand for equities over the past 15 years. Wow. And it's a vault suppressor Right? I mean, you are a bit a massive bid under the market on a VWP order, or more importantly, when there is a drawdown, that's when they get most active. So it's like Long Gamma. It's like synthetic long gamma in the market. So one, you're burning through your cash and you're no longer doing that.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Bitcoin is trading like software. It's trading like SaaS, which is going through an existential crisis right now for really justified reasons, especially with regards to valuation, right? And the funny thing is, when we were talking about how AI was actually going to, I was making the point kind of Q4, start of Q4 last year, there's two major tailwinds for equities that become potential headwinds in 2026. They're very well socialized, but they still ring true. Ironically, we kind of got a backdoor on it. One was that the CapEx spending with regard to AI was burning your cash. And you were moving through the cash so fast, right? And the cash that made these companies so preferred, so screening is quality and profitability and all these great things. They're liquid. They're big. You can move in and out of them. They only go higher.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“And upside trades in SLV and GLD, the options volumes are massive. It became a speculative macro tourist retail type of a trade on top of all this. But Bitcoin kept going lower. And I started seeing one, if people were grabbing, people clearly have this preference for real assets, you know, physical assets right now in this world of debasement, of fiat, of fiscal deficit spend, perpetual issuance, all those things.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“If debasement was actually what people are saying it was, right? This idea that in de-dollarization, you know, moving away from fiat, you know, U.S. policy volatility, U.S. fiscal deficit, which by the way, okay, like same with Europe, same with Japan now, you know, with their little trust moment, you know, Europe has taken the austerity break off. That's a global phenomenon with fiat currency. So like, okay, I can get with that to a certain extent. But like, why didn't Bitcoin participate if that's what people kind of claim is, you know, Bitcoin's a shapeshifter, as is gold. But, you know, my story and my skepticism with regards to that debasement or that de-dollarization was the way that Bitcoin absolutely did not participate when it was gold and silver. And look, you know, I sit in options business. I see just outrageous call skews and demand for upside and people, you know, keep putting on and keep reloading into these, you know, the call spreads.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Gross exposure is not purely a function of trailing realized volatility, right? Different strategies deploy different leverage, different strategies will try to amplify a market neutral versus a net lean or a directional lean. But by and large, the grosses were too damn big. It's like the guy that used to run for mayor. And when you see grosses being that big and you see prices bending off the curve and you see the thesis behind it, and this is where I'm pumped to tie in like the Bitcoin read, right? Yeah.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source
“Different weightings based on different economic scenarios, like very kind of generic risk parity. We're seeing on a, let's say, a five-year look back, 99 spot seven percentile gross exposure. It just so happens, right? You know, Goldman Sachs prime brokerage data with regards to equity hedge fund grosses as of last Friday, 100% on a five-year look back. So like these are synonymous.”
2026-02-06 · Odd Lots · Lots More With Charlie McElligott on This Week's SaaSpocalypse · IDENTIFIED FROM THE TRANSCRIPT · source