Fragile Rally. Big Vol Spike. Credit Risks Rising | What the Options Market Says About What's Next

In this episode, Brent Kochuba of SpotGamma joins Jack Forehand to break down the October options expiration and the surge in volatility that hit markets. They discuss record-breaking options volumes, the impact of zero-DTE trading, Trump’s market-moving tweet, and why the options market is increasingly driving short-term price action. Brent explains how positioning, gamma dynamics, and liquidity flows combine to create instability — and what that might mean for volatility into year-end.

Topics covered:
• Record 110 million options contracts traded and what it means for market structure
• Why volatility spiked even though the S&P 500 barely fell
• The role of dealer positioning and negative gamma in amplifying market swings
• How the AI trade and single-stock call buying distorted implied volatility
• The growing dominance of zero-DTE options and their destabilizing effects
• What OPEX and VIX expirations tell us about volatility mean reversion
• ETF leverage, financialization, and systemic risk
• The relationship between correlation, dispersion trades, and crowding in AI names
• Why volatility events now resemble “spasms” instead of slow corrections
• How these options dynamics could influence the year-end “Santa Claus rally”

Timestamps:
00:00 Record options volume and volatility spike
04:00 The AI call-buying frenzy and how it unwound
10:00 Understanding dealer gamma and hedging flows
12:00 OPEX, VIX expiration, and mean reversion in vol
16:00 Event calendar and upcoming catalysts
18:00 October OPEX setup and neutral call/put balance
21:00 Seasonal trends and the “Santa Claus rally”
27:00 Revisiting September’s predictions and what played out
33:00 Market concentration and AI narrative
40:00 Dispersion trades, correlation, and crowding
44:00 Zero-DTE dynamics and their systemic impact
50:00 Volatility spikes, leverage, and what comes next