The OPEX Effect

Brent Kochuba, co-founder of SpotGamma and an expert in options market analysis, joins the discussion to unveil the intricate dance of options flows and equity markets. He explores the explosive growth of zero DTE options and their profound impact on market behavior. Brent shares cautionary insights from the Captain Condor collapse, showcasing the risks of selling volatility. The conversation highlights how dealer hedging shapes stock movements, the significance of options expiration, and crucial volatility dynamics that even long-term investors should heed.

In this episode of The Opex Effect, Jack Forehand and Brent Kochuba break down what could be the largest options expiration ever and explain why December options flows, seasonality, and volatility dynamics matter so much for markets right now. The conversation explores how AI enthusiasm, equity rotation, and record options volume are colliding into year end, and what the options market is signaling about near term risk, upside, and potential turning points. From zero DTE trading and volatility suppression to the Santa Claus rally, JP Morgan’s collar trade, and the implications for stocks, small caps, and value, this episode offers a detailed look at how derivatives are shaping market behavior beneath the surface.Topics covered:Why December options expiration may be the biggest ever and why that mattersHow options market flows influence stock prices and volatilityThe role of zero DTE options in suppressing or amplifying market movesAI, capital cycles, and whether infrastructure builders will benefitSeasonality, the Santa Claus rally, and year end market dynamicsEquity rotation versus true risk off environmentsSmall caps, value stocks, and shifts away from mega cap techVolatility compression, hedging flows, and what happens after expirationThe JP Morgan collar trade and its impact on S&P 500 levelsKey upside and downside levels to watch into year end and JanuaryTimestamps:00:00 Introduction and why this could be the biggest options expiration ever02:15 AI enthusiasm, bubbles, and capital cycle risks05:00 Why price and time both matter in trading decisions06:45 Record options volume and the rise of zero DTE trading09:00 How options hedging flows move the underlying market11:20 Why December expiration can be a market turning point13:00 Volatility trends around options expiration14:30 Seasonality, holidays, and the Santa Claus rally17:00 Call heavy versus put heavy expirations19:30 Why extreme positioning can lead to reversals21:30 Size of December expiration compared to other months24:00 Lessons from November options expiration27:00 Nvidia, AI leaders, and options driven price behavior31:30 Equity rotation into small caps and value stocks34:00 Correlation, risk off signals, and market stability36:00 Key S&P 500 levels including 6800 and 700039:00 Fed uncertainty, rate cuts, and volatility outlook41:00 JP Morgan collar trade mechanics and market pinning44:00 Cheap upside calls and volatility suppression48:30 Options based ETFs and income strategies50:00 Oracle earnings, credit risk, and surprising options signals

In this month’s OPEX Effect, Brent Kochuba and Jack Forehand break down the forces driving markets into November expiration. They cover the surge in volatility, Nvidia’s critical earnings event, the clustering of major catalysts, the behind-the-scenes hedging flows that shape price action, and why this expiration looks fundamentally different from the recent call-heavy cycles. The conversation blends macro uncertainty, options positioning, single-stock fragility, and the psychology of navigating markets that feel worse than they look.Topics Covered:• Why mega-cap AI names now dominate market behavior• Why volatility feels “back,” even with markets near all-time highs• The role of retail and institutional options activity in driving hedging flows• How delta, gamma, implied volatility, and time interact in maintaining hedges• Why November’s cluster of Nvidia earnings, VIX expiration, and OPEX is so important• How volatility can mean revert after options positions roll off• The October 10 volatility spasm and what it revealed• Resetting from call-heavy markets to put-skewed positioning• Macro uncertainty, rate-cut probabilities, and political risk• Credit default swap spikes and the broader AI narrative• The difficulty of timing bubbles and speculative extremes• Value investing pain points during high-volatility periods• Why fundamental sellers may finally be stepping in• What the options market implies heading into December’s massive expirationTimestamps:00:00 Mega-cap AI exposure and volatility setup01:00 Why markets feel worse than they look01:16 How hedging flows amplify market moves16:14 Nvidia’s earnings, VIX expiration, and the volatility cluster18:14 Why options volumes keep growing20:58 How small orders snowball into large market-maker hedges22:49 How OPEX resets positioning each month25:00 Negative gamma, volatility spikes, and event catalysts25:45 October’s volatility spasms explained27:34 Why November is the most put-skewed expiration in months32:00 Correlation breakdown and signs of fundamental selling33:44 Macro uncertainties, shutdown risk, rate cuts, and CDS spikes39:15 Market uncertainty, CPI gaps, and political anxiety41:00 AI cracks, CoreWeave trouble, and credit risk05:46 Bubble parallels and speculative excess07:00 The pain of value investing in runaway markets01:07:53 Wrap-up and closing comments

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 spike04:00 The AI call-buying frenzy and how it unwound10:00 Understanding dealer gamma and hedging flows12:00 OPEX, VIX expiration, and mean reversion in vol16:00 Event calendar and upcoming catalysts18:00 October OPEX setup and neutral call/put balance21:00 Seasonal trends and the “Santa Claus rally”27:00 Revisiting September’s predictions and what played out33:00 Market concentration and AI narrative40:00 Dispersion trades, correlation, and crowding44:00 Zero-DTE dynamics and their systemic impact50:00 Volatility spikes, leverage, and what comes next

The hosts dive into the historic September options expiration, framing it as a potential game-changer for the markets. They discuss the rise of zero-day options, how market makers navigate this chaotic landscape, and the implications of extreme call skew despite low prices. With volatility at historic lows, the conversation turns to the risks of an upcoming volatility spike. Fun pop culture analogies, including zombies and K-pop, add humor to the serious analysis of market dynamics and the influence of macroeconomic factors on trading patterns.

Dive into the fascinating world of market dynamics as the hosts explore the intriguing 'Honey Badger' and 'Zombie' markets. They unpack record-high options trading volumes and discuss the potential for a volatility spike against the backdrop of low realized volatility. With tech call options at their cheapest in a year, they decode the implications for investors. Tune in for insights on the impacts of shifting tariff policies and the role of market maker hedging in creating unexpected price movements!

Markets are sitting at all-time highs, but under the surface, the options market is flashing signs of extreme positioning. In this episode, Brent Kochuba of SpotGamma returns to break down the latest options expiration cycle and what it could mean for stocks going forward.We discuss why record call buying, minimal hedging, and low implied volatility are creating a potentially fragile setup — and why upcoming events like CPI, VIX expiration, and tariffs could act as catalysts. Whether you're a long-term investor or a short-term trader, this conversation offers a deeper look at how positioning, dealer flows, and volatility pricing impact market behavior.Topics covered include:Why extreme call skew signals crowdingThe importance of gamma, vanna, and charmHow options flows can drive short-term market movesThe "window of weakness" around OPEX and VIX expirationThe role of tariffs, CPI, and macro catalysts in this setupTactical implications for investors and traders

In the latest episode of the OPEX Effect, Jack Forehand and Brent Kochuba dive deep into the dynamics shaping the current market regime, with a particular focus on the upcoming June OPEX, dealer positioning, volatility trends, and the surprising resilience of the S&P 500 amid geopolitical stress. They break down how options flows continue to dominate equity price action, why the market remains pinned despite negative news, and what might finally break the calm. With some of the largest options expirations in history on deck, this is a must-watch for anyone following volatility, hedging flows, and macro signals.💡 Topics Covered:Why volatility often contracts before OPEX and expands afterThe significance of the June 2025 OPEX as potentially the largest everDealer gamma, hedging flows, and what they signal about near-term volatilityWhy implied vol is so low despite major geopolitical risk (e.g. Israel-Iran conflict)The JP Morgan collar trade and its influence on the 5,900 level in the S&PHow zero-DTE options impact market stability and risk signalingA potential regime shift: AI stocks, “taco trades,” and declining liquidityWhat vol metrics like VIX, VVIX, and correlation are really sayingThe hidden risk of overconfidence when markets ignore bad newsBreakdown of sector-specific volatility expectations (tech, energy, gold, Bitcoin)

Market forces are at play as the May options expiration approaches. The alarming lack of downside hedging amid a strong rally suggests a fragile market. Zero DTE options are creating an illusion of stability while masking volatility. The discussion touches on market sentiment shifts and the relationship between retail and institutional trading. Listeners learn about the potentially dangerous call exposures and the implications of liquidity challenges, alongside an intriguing 'Saul Goodman' reference that hints at market signals.

In this episode of The OPEX Effect, Jack and Brent dive deep into the market turmoil following "Liberation Day" and the implementation of new tariffs. With volatility spiking to levels not seen since the 2020 COVID crash, the hosts analyze how options markets are reacting, why liquidity has evaporated, and what investors should expect in this new higher-volatility regime. The conversation covers everything from VIX behavior to options positioning, and provides critical insights for navigating these turbulent markets.Key Topics Covered:The recent market volatility spike and why this represents a fundamental "regime change"How options market makers are reacting to the tariff announcements and subsequent 90-day pauseWhy liquidity has disappeared from markets and its impact on price movementsThe significance of this month's options expiration and VIX expirationWhy zero-DTE options are NOT the cause of recent volatilityTechnical support and resistance levels based on options positioningGold's recent surge and signs it may be ready for consolidationThe impact of increased correlation across asset classesExpectations for upcoming earnings season and its importance in this environment