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Gammaflip

[GEX] 12/16 Weekly SPX AnalysisNow, let’s take a look at the expected SPX trading range for the week based on the auto GEX levels for TradingView: It’s clear that we’re currently in positive gamma territory , primarily due to the December 20 expiration. However, the mid-week expirations leading up to that date remain in negative gamma territory, a direct result of last week’s bearish moves—though this can change within a single day. Looking ahead to Friday, we expect a range-bound, more predictable trading environment, likely holding above 6045 and below 6100 based on current levels. IVR and IVx remain low, and we don’t anticipate any increase before Christmas unless the market reaches the “total deny zone” between 6025 and 6040. The greatest IV backwardation is present between December 20 and December 23, as average IV ticked up slightly following last week’s bearish action. This makes that particular expiration combination potentially appealing for time spread strategies. Stay alert! The deny zone is near, and a quick move through the HVL could suddenly disrupt what currently appears to be a relatively predictable trading range. Conversely, a breakout above 6100 could spark a permabull end-of-year rally to the upside.
SPREADEX:SPX
by TanukiTrade
[GEX] levels for QQQFirst, let’s examine what we see on our chart using options indicators: Summarizing the GEX levels through December 26, we have a strong call wall at around 540. If price can break above and hold that level, it could easily pave the way toward 550. However, if we’re expecting a Christmas selloff after Friday’s close, this bearish assumption might prove worthwhile. This brings up a point that often comes up: “How do I interpret whether the optoins indicator is bullish or bearish?” There’s no such definitive signal! The levels and options metrics show certain conditions, but no one can tell you exactly what will happen next. This is where you need to have a directional hypothesis. Once you have it, the indicators can help you fine-tune your positioning, identify realistic targets, and select viable legs—but they won’t decide your directional stance for you. For example, while everything may look bullish, let’s say you have a contrarian bearish view. Then you can see where it makes sense to position yourself. Test Case Chosen: 8x QQQ Dec 24th – Dec 26th 525 Calendar Put Spread Max Loss: $216 Max Profit: $1,685 PoP: 45% Why not?
NASDAQ:QQQ
by TanukiTrade
GME vs GEXYou may have heard about this greek called Gamma. If you haven’t, I’m not going to talk about it much except to tell you that it's important. I told you I would do something special for my 1yr GME anniversary, so I took to coding up a Gamma exposure tool (GEX) that I will be giving out for free once I get it tested next week. The tool is simple enough but will provide GME traders with some important levels. The levels are based on Gamma exposure from options and identifying where gamma flips from negative to positive. It's nothing new, but access to an entire Options Chain and being able to calculate the gamma exposure is something most alpha providers hide behind a paywall as some secret sauce to get you to pay for a subscription. That's not me. I think all information regarding a stock should be accessible to everyone, particularly the less wealthy traders like us gamers. Why is GEX important? Gamma exposure is important because it acts as a driving force for underlying assets. That is to say, when a market maker's exposure to an asset is overly positive, the dealers will sell into a rally and buy into dips, inversely, when the mm is negative gamma, they will buy into a rally and sell into a dip. It’s safe to assume once the mm exposure to that asset is negative like it is with GME below 140 gamma flip, you’re likely to get more volatility. Usually this gamma zero acts as a type of support for an asset, but if you have been living under a rock, you may not have heard the shifting sentiment in the marketplace moving to a more risk-off appetite. It's why you see shares of VIAC rising and our beloved GME breaking the gamma zero support and turning much more negative. The bad news is, there is a rather large negative exposure to GME at 100, something to the tune of -1.6million that seems to be the likely drawdown. I still need to verify my gamma exposure numbers and make sure I’m not missing anything. Something tells me the ETFs that include GME may offer some more gamma exposure I’m not seeing. Either way, next week I will open-source the code and publish the tool/data to be verified. I will then attempt to make sense out of ETFs affecting this recent drawdown. As always, not financial advice. I’m a meat popsicle and…
NYSE:GMELong
by SPYvsGME
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