In this month’s OPEX Effect, Brent and Jack break down the September OPEX, which may be the largest ever. With volatility deeply suppressed, a record call skew, and the Fed meeting coinciding with VIX expiration, markets are set up for potential fireworks. The conversation explores how derivatives flows shape equities, why this expiration could be a turning point, and what investors should watch around key levels like 6,500.
Topics Covered
Record zero DTE volumes and their market impact
Why September OPEX may be the largest expiration ever
The “vol pop zombie hunter” theme and what it signals
How option dealer hedging drives equity flows
The correlation between gamma positioning and volatility
Macro dynamics: rate cuts, liquidity, and potential bubble parallels
Why call skew is extreme but call prices remain low
How suppressed implied vol sets up risk of a volatility spike
The VIX futures curve, ETF flows, and market dislocations
Key levels to watch: 6,500 and beyond for downside risk
Timestamps
00:00 – Zero DTE dominance and setup into September OPEX
02:00 – “Vol Pop Zombie Hunter” theme explained
06:00 – How options flows translate into equity moves
11:00 – Options expiration cycles and turning points
16:00 – Largest expirations and potential market reversals
20:00 – Extreme call skew and positioning risks
28:00 – Sector positioning and the lack of call demand
33:00 – Correlation lows and implications for market breadth
37:00 – Realized and implied volatility at historic lows
43:00 – VIX futures curve, ETFs, and contango dynamics
50:00 – Risks below 6,500 and the role of JP Morgan’s collar
53:00 – The destabilizing effect of disappearing zero DTE flows
