The OPEX Effect

In this episode of the OpEx Effect, we discuss the current state of the market as we approach the May options expiration. We analyze the low levels of volatility and put demand, suggesting market participants are not too concerned about potential downside risks. We also examine the impact of key upcoming events, particularly the CPI report and NVIDIA earnings, and how they could influence market direction. Additionally, we explore the relationship between options activity and market sentiment and the importance of understanding these dynamics even for long-term investors. DOWNLOAD THE SLIDE DECK ⁠⁠⁠https://excessreturnspod.com/opexeffectmay2024.pd⁠f⁠⁠ MORE INFORMATION ABOUT SPOTGAMMA ⁠⁠⁠⁠⁠⁠⁠https://www.spotgamma.com⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW BRENT ON TWITTER ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://twitter.com/spotgamma⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW JACK ON TWITTER ⁠⁠⁠⁠⁠⁠⁠⁠https://twitter.com/practicalquant⁠⁠

In this episode of the OPEX Effect podcast, Brent Kochuba and Jack Forehand discuss the current market turmoil and its potential impact on options flows. They analyze how the geopolitical conflict in the Middle East, coupled with rate volatility and the upcoming U.S. elections, is causing a shift in the market environment from a period of volatility suppression to one of increased volatility. The hosts examine various indicators, such as correlation, dispersion, and the VIX, to highlight the unwinding of previous market flows and the potential for a new volatility regime. They also discuss the implications of the VIX expiration occurring before the equity options expiration and how this could impact the market in the coming week. DOWNLOAD THE SLIDE DECK ⁠⁠https://excessreturnspod.com/opexeffectapril2024.pd⁠f⁠ MORE INFORMATION ABOUT SPOTGAMMA ⁠⁠⁠⁠⁠⁠https://www.spotgamma.com⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW BRENT ON TWITTER ⁠⁠⁠⁠⁠⁠⁠⁠https://twitter.com/spotgamma⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW JACK ON TWITTER ⁠⁠⁠⁠⁠⁠⁠https://twitter.com/practicalquant⁠

The OPEX Effect looks at the impact of options flows on the market from the perspective of longer-term investors. In each episode, we break down what is going on behind the scenes in the options market and how the resulting flows are moving markets. In this episode, we take a deep dive into the March 2024 options expiration and its potential implications for the market. We discuss dealer positioning into the expiration, whether the call buying in the chip sector is showing signs of exhaustion, the relationship between gold and Bitcoin and forward stock returns, options positioning headed into Nvidia's upcoming major announcement and a lot more. DOWNLOAD THE SLIDE DECK ⁠https://excessreturnspod.com/opexeffectmarch2024.pdf⁠ MORE INFORMATION ABOUT SPOTGAMMA ⁠⁠⁠⁠⁠https://www.spotgamma.com⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW BRENT ON TWITTER ⁠⁠⁠⁠⁠⁠⁠https://twitter.com/spotgamma⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW JACK ON TWITTER ⁠⁠⁠⁠⁠⁠https://twitter.com/practicalquant⁠

The OPEX Effect looks at the impact of options flows on the market from the perspective of longer-term investors. In each episode, we break down what is going on behind the scenes in the options market and how the resulting flows are moving markets. In this episode, we take a deep dive into the February 2024 options expiration and its potential implications for the market. We discuss the extreme level of call buying occurring in the tech space and what it might mean going forward. We also cover volatility, skew, the price of downside protection, tech domination of the S&P 500 and a lot more. DOWNLOAD THE SLIDE DECK https://www.validea.com/documents/opexeffectfebruary2024.pdf MORE INFORMATION ABOUT SPOTGAMMA ⁠⁠⁠⁠https://www.spotgamma.com⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW BRENT ON TWITTER ⁠⁠⁠⁠⁠⁠https://twitter.com/spotgamma⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW JACK ON TWITTER ⁠⁠⁠⁠⁠https://twitter.com/practicalquant⁠

The OPEX Effect looks at the impact of options flows on the market from the perspective of longer-term investors. In each episode, we break down what is going on behind the scenes in the options market and how the resulting flows are moving markets. In this episode, we take a deep dive into the January 2024 options expiration and its potential implications for the market. We discuss why this expiration could be a significent market event, what the behind the scenes details of the expiration look like and why the story is even more interesting in single stocks than it is for the S&P 500. We also get an update on the MAG 7 stocks, look at why volatility has been muted and dicsuss the implications of the rise of 0DTE options. DOWNLOAD THE SLIDE DECK https://www.validea.com/documents/opexeffectjanuary2024.pdf MORE INFORMATION ABOUT SPOTGAMMA ⁠⁠⁠https://www.spotgamma.com⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW BRENT ON TWITTER ⁠⁠⁠⁠⁠https://twitter.com/spotgamma⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠FOLLOW JACK ON TWITTER ⁠⁠⁠⁠https://twitter.com/practicalquant⁠

THE OPEX Effect looks at the impact of options flows on the market from the perspective of longer-term investors. In each episode, we break down what is going on behind the scenes in the options market and how the resulting flows are moving markets. In this episode, we look at where things stand coming into the December 2023 options expiration. We look at dealer positioning in the S&P 500 headed into the expiration and what that might mean going forward. We discuss the setup in small-cap stocks, whether we are seeing excessive call buying in single stocks, the JP Morgan Collar trade and a lot more. DOWNLOAD THE SLIDE DECK https://www.validea.com/documents/opexeffectdecember2023.pdf MORE INFORMATION ABOUT SPOTGAMMA ⁠⁠https://www.spotgamma.com⁠⁠ ⁠⁠⁠⁠⁠⁠⁠FOLLOW BRENT ON TWITTER ⁠⁠⁠⁠https://twitter.com/spotgamma⁠⁠ ⁠⁠⁠⁠⁠⁠FOLLOW JACK ON TWITTER ⁠⁠⁠https://twitter.com/practicalquant⁠

In our latest episode of the OPEX Effect, we discuss the upcoming November options expiration and what Brent is seeing in options markets leading into it. We also talk about the impact of 0DTE options on the market, the relationship between options expirations and VIX expirations, positioning in the Mag 7 stocks and a lot more. DOWNLOAD THE SLIDE DECK https://www.validea.com/documents/opexeffectnovember2023.pdf MORE INFORMATION ABOUT SPOTGAMMA ⁠https://www.spotgamma.com⁠ ⁠⁠⁠⁠⁠FOLLOW BRENT ON TWITTER ⁠⁠⁠https://twitter.com/spotgamma⁠ ⁠⁠⁠⁠FOLLOW JACK ON TWITTER ⁠⁠https://twitter.com/practicalquant⁠ FOLLOW JUSTIN ON TWITTER ⁠https://twitter.com/jjcarbonneau⁠

In our inaugural episode of the OPEX effect, Brent Kochuba, Jack Forehand and Justn Carbonneau look at the options market as we approach the October expiration and the big takeaways investors can take from it. We discuss the role options flows play in the market, look at current positioning in the S&P 500 market and also cover bonds, the MAG 7, the Ozempic trade and a lot more. DOWNLOAD THE SLIDE DECK https://www.validea.com/documents/opexeffectoctober2023.pdf MORE INFORMATION ABOUT SPOTGAMMA https://www.spotgamma.com ⁠⁠⁠FOLLOW BRENT ON TWITTER ⁠⁠https://twitter.com/spotgamma ⁠⁠FOLLOW JACK ON TWITTER ⁠https://twitter.com/practicalquant FOLLOW JUSTIN ON TWITTER https://twitter.com/jjcarbonneau⁠