Somebody Is Obligated To Buy When You Panic
Somebody posts a total gamma exposure reading every morning. Gamma is the rate at which an options position’s risk changes as the underlying moves, and the crowd reading those posts has the whole thing backwards. I sat on the other side of that order flow for 15 years. Retail buys options. That’s the whole thing. […]
Nothing The Treasury Is Doing Right Now Is New
Nothing the Treasury is doing right now is new. We’ve seen this exact playbook before. It was called Operation Twist, and understanding why it worked the first time tells you a lot about why this time is different. Go back to 2011. The financial crisis had hit hard, markets bottomed in March of 2009, and […]
Indices are Quiet, But Equities are Rockin’
https://youtu.be/jioJYaBZ1_M Micron trades at $970. The calls sitting 330 points out of the money cost $10. The puts sitting 270 points out of the money cost $4. The market is pricing double the risk of a melt up over a crash. I call that trading stupid. That inversion gets wider the further out in time […]
Earnings Flips: A Defined-Risk Options Strategy for Trading Earnings Season
How to Trade the Most Volatile Event on the Calendar Earnings season. Twice a year, every stock on your watchlist becomes a live grenade. The stock gaps up 10%. It gaps down 15%. Traders are guessing direction, buying naked options, praying they got it right — and more often than not, walking away with a […]
The Oil Trade No One is Watching
Hey trader, Something fishy is going on in the oil markets. And it’s creating an interesting opportunity that you probably didn’t notice. Oil futures contracts point to near-term volatility as do the option prices on the USO, the ETF that tracks oil. Both signals are pointing in the same direction at the same time.