Stock Market Options Trading What is a Call Wall? w/ Brent Kochuba from SpotGamma.com
6 snips
Aug 12, 2022 
Brent Kochuba, a key figure at SpotGamma.com, joins the discussion to unravel the intricacies of call and put walls in the options market. He highlights how call walls serve as crucial indicators of market sentiment and their rarity in breaching contributes to volatility. The conversation also sheds light on gamma exposure and its implications for at-the-money options as expiration nears. Additionally, Brent emphasizes the importance of understanding market cycles and the emotional challenges traders face amidst evolving market narratives.
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Understanding the Call Wall
- A call wall represents the strike price with the largest call option gamma exposure above or near the current market price.
- This level indicates significant potential hedging activity and reflects market sentiment about upward movement.
Gamma Trumps Open Interest
- Open interest alone can be misleading; gamma weighting reveals the importance of strikes near the money and closer to expiration.
- This makes gamma the key metric to identify impactful options positions versus just raw open interest.
Options Market Cycles and Positioning
- The options market operates in cycles, mostly 30-day tied to expirations, with shorter-term cycles nested inside.
- These cycles frame positioning shifts, volatility regimes, and support/resistance defined by option strike clusters.