Gamma Exposure (GEX) - A Data Driven Guide

Summary

Dieses Video bietet eine umfassende Diskussion über Gamma-Exposition in Optionshandel, einschließlich weniger bekannter und populärer Meinungen zur Nutzung von Kamera- und Spiel-Exposition. Der Sprecher erläutert, was Gamma ist, wie man Gamma-Exposition berechnet und warum sie wichtig ist, im Gegensatz zu Delta-Exposition. Es werden auch die Auswirkungen von Gamma auf Aktienpreise und Volatilität diskutiert, sowie die Bedeutung von Marktmakler-Positionierung und dynamischem Hedging. Der Schwerpunkt liegt auf der Analyse von Gamma-Exposition für den S&P 500 (SPY) und wie sie für Trading-Strategien genutzt werden kann, unter besonderer Berücksichtigung von 'illiquiden Zonen', die schnelle Preisbewegungen ermöglichen.

Takeaways

• 📈 Gamma ist die Veränderung der Delta eines Options-Kontrakts, wenn der Aktienkurs sich bewegt.
• 🔢 Gamma-Exposition misst die Gesamtgamma einer Aktie, indem man die Gammas der Kontrakte mit dem offenen Interesse multipliziert.
• 🤔 Delta-Exposition wird oft diskutiert, aber Delta wird sofort ausgeglichen, während Gamma sich im Laufe der Zeit ändert und ist daher wichtiger für Marktteilnehmer.
• 💡 Die Verwendung von Gamma-Exposition kann Einblicke in Marktbewegungen geben, insbesondere in Bezug auf sogenannte Gamma-Squeezes.
• 📊 Die Analyse von Gamma-Exposition unterscheidet sich je nach Aktie, da jeder Aktienmarkt seine eigenen Mustern und Reaktionen auf Gamma-Veränderungen hat.
• 📉 Ein negatives Gamma kann zu einem Momentaneffekt führen, während ein positives Gamma eine Stabilisierung oder Rückführung des Preises bewirken kann.
• 📈📉 Die Verwendung von Gamma-Exposition zur Vorhersage von Volatilität ist nützlicher als die Annahme, dass sie den Richtungsweg des Marktes vorhersagen kann.
• 📊 Die Darstellung von Gamma-Exposition in einem Diagramm ist sinnvoll, um zu visualisieren, wann der Markt aufgrund von Gamma-Effekten eine höhere Volatilität erwarten kann.
• 🤖 Die Erstellung automatisierter Handelsstrategien basierend auf Gamma-Niveaus kann erfolgreich sein, muss jedoch sorgfältig mit anderen Marktfaktoren abgewogen werden.
• 🕊️ 'Illiquid-Zonen', in denen die Gamma-Exposition gering ist, können als Bereiche interpretiert werden, in denen der Markt weniger von Marktmacher-Hedging beeinflusst wird und daher freier bewegt.
• 🌐 Die Verwendung von Gamma-Exposition als Handelswerkzeug erfordert eine gründliche Analyse und Verständnis der individuellen Charakteristika des jeweiligen Aktienmarktes.

Q & A

Was ist Gamma-Exposition und wie wird sie berechnet?

Gamma-Exposition ist eine Maßeinheit für die Veränderung der Delta-Werte eines Options-Kontraktes im Verlauf der Veränderung des zugrunde liegenden Aktienpreises. Sie wird berechnet, indem man die Gamma-Werte der einzelnen Verträge mit dem offenen Interesse multipliziert und diese Werte summiert.

Was versteht man unter Delta-Hedging und warum ist es wichtig?

Delta-Hedging ist die Praxis, eine Position zu neutralisieren, indem man die Delta-Werte von Optionen und die zugrunde liegenden Aktien in Einklang bringt. Es ist wichtig, um die Preisbewegungen zu begrenzen, die durch das Kaufen oder Verkaufen von Optionen entstehen können.

Was ist der Unterschied zwischen statischem und dynamischem Hedging?

Statisches Hedging bezieht sich auf die anfängliche Positionierung, um die Preisbewegungen zu neutralisieren. Dynamisches Hedging hingegen erfordert, dass die Positionen der Marktschaffner angepasst werden, wenn sich die Delta- und Gamma-Werte im Laufe der Zeit ändern.

Warum ist Gamma-Exposition für Händler wichtiger als Delta-Exposition?

Gamma-Exposition ist wichtiger, weil sie die dynamischen Veränderungen der Delta-Werte im Laufe der Zeit widerspiegelt, während Delta-Exposition nur die anfänglichen Verhältnisse abbildet. Marktschaffner müssen sich ständig an die Veränderungen der Gamma-Exposition anpassen, um ihre Positionen zu hedgen.

Was passiert, wenn die Gamma-Exposition für eine Aktie negativ ist?

Bei einer negativen Gamma-Exposition werden die Delta-Werte der Händler kleiner, wenn der Aktienkurs steigt. Dies kann dazu führen, dass die Händler mehr Aktien kaufen müssen, um ihre Positionen zu hedgen, was den Aktienkurs unterstützt.

Was versteht man unter 'Illiquid Zone' und warum sind sie wichtig?

Eine 'Illiquid Zone' ist ein Bereich, in dem es wenig Optionsaktivität und somit wenig Gamma-Exposition gibt. Diese Zonen können wichtig sein, weil sie schnelle Preisbewegungen ohne die Einmischung von Marktschaffnern zulassen.

Wie kann man Gamma-Expositions-Niveaus interpretieren?

Gamma-Expositions-Niveaus zeigen an, wo sich die Gamma-Exposition für bestimmte Kursstufen befindet. Ein hohes positive Niveau kann ein Anziehungseffekt haben, während ein hohes negatives Niveau einen Abstoßungseffekt auslösen kann.

Was sind die Vor- und Nachteile des Filters für Gamma-Exposition, die innerhalb von 7, 15 oder 30 Tagen ausfällt?

Der Filter kann helfen, sich auf kurzfristige Optionen zu konzentrieren, die stärker beeinflusst werden können. Allerdings ist der Hauptteil der Gamma-Aktivität bereits in kurzfristigen Optionen konzentriert, was den Wert dieses Filters möglicherweise reduziert.

Welche Rolle spielen Illiquid-Zonen in der Marktdynamik?

Illiquid-Zonen können schnelle Preisbewegungen ohne signifikante Einflussnahme durch Marktschaffner ermöglichen. Dies kann zu einer erhöhten Volatilität führen, da die Preisbewegungen weniger von der Hedging-Aktivität der Händler begrenzt sind.

Welche 'unpopuläre Meinung' zum Gamma-Expositions-Niveau gibt es und was bedeutet sie?

Die 'unpopuläre Meinung' ist, dass die Gamma-Expositions-Niveaus nicht immer die beabsichtigten Effekte wie Momentan- oder Mean-Reversion-Effekte auslösen. Dies hängt von der relativen Stärke der Gamma-Werte im Vergleich zum durchschnittlichen Gamma-Niveau des Marktes ab.

Outlines

00:00

📈 Einführung in Gamma-Exposition

Der erste Absatz stellt das Thema des Videos vor: Gamma-Exposition. Erklärt wird, was Gamma ist — die Veränderung der Delta eines Options-Kontrakts bei Veränderung des Aktienkurses — und wie man Gamma-Exposition berechnet, indem man Gamma mit dem offener Interesse multipliziert. Der Sprecher teilt seine Erkenntnisse und Meinungen zu dieser Thematik mit, die aus einer Datenanalyse resultieren und in der Hoffnung, dass es Einblicke für Anfänger und Experten enthält, die sie noch nicht kennt.

05:01

📉 Warum wir Gamma und nicht Delta betrachten

In diesem Absatz wird die Bedeutung von Gamma im Vergleich zu Delta erläutert. Delta repräsentiert die Rate der Änderung des Optionspreises in Relation zum zugrunde liegenden Aktienkurs, während Gamma die Veränderung der Deltas selbst beschreibt. Marktmacher delta-hedge ihre Positionen sofort, was bedeutet, dass Delta für sie keine Rolle spielt, sondern sie sich auf die Verwaltung von Gamma konzentrieren müssen. Des Weiteren wird erklärt, dass Delta vollständig gehedgt wird, während Gamma die Veränderungen verursacht, die Marktmacher zu dynamischen Hedges treiben.

10:02

🔢 Gamma-Exposition: Berechnung und Bedeutung

Der Absatz erklärt, wie man die Gamma-Exposition für einen Aktienmarkt berechnet, und warum dies wichtig ist. Es wird betont, dass die einfache Multiplikation von Gamma mit dem offener Interesse, um die Gamma-Exposition zu schätzen, nicht ausreicht. Stattdessen wird ein besserer Ansatz vorgestellt, bei dem die tatsächlichen Kauf- und Verkaufspositionen der Marktmacher berücksichtigt werden, um eine genauere Gamma-Exposition zu ermitteln.

15:02

📊 Analyse von Gamma-Exposition im Zeitverlauf

Dieser Absatz behandelt die Verwendung von Gamma-Expositions-Diagrammen, um den Marktverlauf vorherzusagen. Es wird erläutert, wie die Gamma-Exposition, dargestellt durch Balken, die Veränderung des zukünftigen Aktienpreises im Laufe der Zeit visualisiert. Der Sprecher teilt seine ungewöhnlichen Ansichten über die Auswirkungen von sehr negativer Gamma-Exposition auf den Markt, insbesondere im Hinblick auf liquide Indizes wie den S&P 500 (SNP).

20:03

📉 Verwendung von Gamma-Exposition für Vorhersagen

Der Fokus dieses Abschnitts liegt auf der Anwendung von Gamma-Exposition, um die zukünftige Volatilität des Marktes zu prognostizieren. Es wird erläutert, dass an Tagen mit nahezu null Gamma-Exposition größere Preisbewegungen erwartet werden können, was für Trader eine Gelegenheit darstellt, um größere Plays zu setzen. Der Sprecher betont, dass die Verwendung von Gamma-Exposition, um die Richtung des Marktverlaufs zu prognostizieren, nicht geeignet ist, sondern dass sie vielmehr für die Vorhersage der Volatilität verwendet werden sollte.

25:04

📈 Gamma-Exposition pro Kursschlag

In diesem Absatz wird die Analyse der Gamma-Exposition pro Kursschlag erörtert. Es wird erklärt, wie die Gamma-Exposition für verschiedene Kursschläge interpretiert werden kann, um zu verstehen, wann ein Kurs in Richtung eines bestimmten Kursschlages eine Schwerpunktbewegung oder eine Mean-Reversion-Wirkung erleben könnte. Der Sprecher teilt seine Einsichten, dass die Theorien über die Auswirkungen von positiver und negativer Gamma-Exposition nicht immer für alle Aktien gelten und dass es wichtig ist, die individuellen Profile der Gamma-Exposition für jeden Aktienmarkt zu betrachten.

30:04

🤔 Kritische Betrachtung der Gamma-Exposition

Der Sprecher teilt seine kritische Sichtweise auf die Gamma-Exposition. Er stellt fest, dass die meisten Handelsplattformen und -analysen, die er untersucht hat, keine aussagekräftigen Erkenntnisse liefern, wenn sie die Gamma-Exposition in absoluten Zahlen anstatt in relativen Werten darstellen. Er betont, dass die relative Stärke der Gamma-Exposition im Vergleich zum Durchschnittswert für den jeweiligen Aktienmarkt entscheidend ist, um die tatsächlichen Auswirkungen auf den Marktverlauf zu verstehen.

35:07

🧲 Magneteffekt großer Gamma-Levels

In diesem Absatz wird der sogenannte 'Magneteffekt' von großen negativen Gamma-Levels beschrieben. Der Sprecher erklärt, dass große negative Gamma-Levels dazu führen können, dass der Aktienkurs schnell zu diesen Level迁移动, aber dann Schwierigkeiten hat, sich von ihnen zu lösen, da der negative Gamma-Wert die Preisbewegungen verstärkt. Er betont, dass dies für liquide Indizes wie den S&P 500 (SNP) gilt, aber dass dies für individuelle Aktien anders sein kann.

40:07

🚫 Fehlende Wertigkeit von Gamma-Levels

Der Sprecher diskutiert, warum die Verwendung von Gamma-Levels ohne Kenntnis ihrer relativen Werte nicht sinnvoll ist. Er argumentiert, dass die meisten Handelsplattformen und -analysen, die er gesehen hat, zu irreführenden Schlussfolgerungen führen, wenn sie die Gamma-Exposition in absoluten Zahlen darstellen. Stattdessen sollte die relative Stärke der Gamma-Exposition im Vergleich zum Durchschnittswert für den jeweiligen Aktienmarkt berücksichtigt werden, um die tatsächlichen Auswirkungen auf den Marktverlauf zu verstehen.

45:07

🏁 Schlussfolgerungen und persönliche Überlegungen zum Gebrauch von Gamma-Levels

Der letzte Absatz fasst die wichtigsten Erkenntnisse des Videos zusammen und gibt einen Ausblick auf die persönlichen Überlegungen des Sprechers zum Gebrauch von Gamma-Levels. Er betont, dass die Verwendung von Gamma-Exposition für die Vorhersage von Marktbewegungen nur sinnvoll ist, wenn man die relativen Werte und die individuellen Profile der Gamma-Exposition für jeden Aktienmarkt berücksichtigt. Der Sprecher bedankt sich bei den Zuschauern für ihre Aufmerksamkeit und teilt seine Hoffnung, dass das Video hilfreich war.

Keywords

💡Gamma Exposure

Gamma Exposure bezieht sich auf die Veränderung des Deltas eines Options-Kontrakts, wenn der Preis des zugrunde liegenden Aktienpreises sich bewegt. Im Video wird erklärt, dass es ein wichtiger Faktor ist, um Marktbewegungen vorherzusagen oder verschiedene Szenarien zu anticipieren. Das Video diskutiert, wie Gamma Exposure berechnet wird und wie es für das Verständnis von Marktdynamiken genutzt werden kann.

💡Delta

Delta ist ein Maß für die Rate der Änderung des Wertes einer Optionsposition in Richtung des Aktienpreises. Im Kontext des Videos ist Delta relevant, da es die Grundlage für die Delta-Hedging-Strategien der Marktschaffenden ist, die im weiteren Verlauf durch Gamma beeinflusst wird.

💡Options-Kontrakt

Ein Options-Kontrakt ist ein Finanzinstrument, das den Käufer das Recht, aber nicht die Pflicht, einen Aktienbesitz innerhalb eines bestimmten Zeitraums zu einem vorab festgelegten Preis zu erwerben oder zu verkaufen, gibt. Im Video werden Options-Kontrakte als zentrale Elemente für die Verständigung von Gamma Exposure diskutiert.

💡Marktmakler

Marktmakler sind Finanzinstitute, die für die Liquidität von Finanzmärkten sorgen, indem sie Börsenaufträge von Investoren entgegennehmen und ausführen. Im Video wird erläutert, wie Marktmakler durch den Verkauf von Options-Kontrakten, die von Investoren gekauft werden, in eine positionelle Ausrichtung geraten und diese durch Delta-Hedging ausgleichen.

💡Delta-Hedging

Delta-Hedging ist eine Strategie, die von Marktschaffenden verwendet wird, um die Preisbewegungen von Optionen, die sie verkaufen, zu kompensieren, indem sie die zugrunde liegenden Aktien entsprechend kaufen oder verkaufen. Im Video wird Delta-Hedging als grundlegender Aspekt der Marktmaklerstrategie beschrieben.

💡Dynamisches Hedging

Dynamisches Hedging bezieht sich auf die Anpassung der Positionen von Marktschaffenden, um den Veränderungen des Deltas und Gammas Rechnung zu tragen. Im Video wird betont, dass dynamisches Hedging notwendig ist, um die sich ständig ändernden Marktbedingungen zu berücksichtigen.

💡Illiquiditätszone

Illiquiditätszonen sind Bereiche, in denen es weniger Options-Kontrakte gibt und somit weniger Aktivität der Marktschaffenden. Im Video wird argumentiert, dass Illiquiditätszonen die Preisbewegungen weniger beeinflussen als Bereiche mit hohem Gamma Exposure.

💡Momentum-Effekt

Ein Momentum-Effekt tritt auf, wenn der Aktienkurs in die Richtung einer hohen Konzentration von Gamma Exposure bewegt und dadurch die Deltas der Marktschaffenden sich schnell ändern. Im Video wird erläutert, dass negative Gamma Exposure einen solchen Effekt auslösen kann, was zu schnellen Preisbewegungen führen kann.

💡Mean-Reversion

Mean-Reversion ist ein Konzept, das besagt, dass ein Wert, der sich von seinem langfristigen Durchschnitt entfernt, tendenziell in Richtung dieses Durchschnitts zurückkehren wird. Im Video wird dies in Bezug auf positive Gamma Exposure diskutiert, was eine Annäherung des Aktienpreises an die entsprechenden Optionen impliziert.

💡Volatilität

Volatilität ist eine Maßzahl für die Preisschwankungen eines Finanzinstruments. Im Video wird betont, dass Tage mit hohem Gamma Exposure oft auch Tage mit hoher Volatilität sind, was für Trader wichtig ist, um ihre Risiken zu managen und potenzielle Gewinne zu erzielen.

💡Streikbasierte Gamma Exposure

Streikbasierte Gamma Exposure bezieht sich auf die Analyse von Gamma Exposure auf einzelnen Optionen-Strike-Preisen. Im Video wird erläutert, wie diese Analyse dazu verwendet werden kann, zu verstehen, wie sich der Preis eines Aktiens an bestimmten Strike-Preisen verhält, basierend auf der Konzentration von Gamma Exposure.

Highlights

Der Sprecher ist aufgeregt über das Thema Gamma-Exposition und hat sowohl populäre als auch unpopuläre Meinungen darüber, wie man sie effektiv nutzen kann.

Gamma ist definiert als die Veränderung der Delta eines Options-Kontrakts, wenn der Aktienkurs sich bewegt.

Gamma-Exposition misst, wie viel Einfluss die Gamma eines Vertrags auf den Aktienkurs hat, indem man die Gamma mit dem offener Interesse multipliziert.

Der Sprecher erklärt, warum man bei Optionshandel meist über Gamma und nicht über Delta spricht, da Delta vollständig gehedgt wird.

Es wird auf die Bedeutung von Marktmaklern und ihre Positionierung bei Call- und Put-Kauf eingegangen.

Die Vorstellung von dynamischem Hedging wird erläutert, um die Auswirkungen von Gamma-Veränderungen zu managen.

Der Sprecher diskutiert die Unterschiede zwischen der Berechnung von Gamma-Exposition bei verschiedenen Plattformen und Methoden.

Es wird betont, dass die Gamma-Exposition für verschiedene Aktien unterschiedliche Muster zeigt und individuell analysiert werden muss.

Der Einfluss von Gamma-Exposition auf die Volatilität und Preise von Aktienindex-Optionen wie dem S&P 500 wird diskutiert.

Es wird erklärt, dass eine nahezu Null-Gamma-Exposition zu einer erhöhten Volatilität führen kann.

Der Sprecher teilt seine ungewöhnlichen Ansichten über die Auswirkungen von sehr negativer Gamma-Exposition auf den Markt.

Es wird auf die Bedeutung der relativen Werte von Gamma-Exposition verwiesen, anstatt nur absolute Werte zu betrachten.

Der Begriff 'Illiquiditätszonen' wird eingeführt, um Bereiche zu beschreiben, in denen die Gamma-Exposition gering ist und der Markt schneller reagieren kann.

Es wird eine Diskussion über die Anwendung von Gamma-Exposition-Niveaus für den Handel mit Aktien wie dem S&P 500 (SPY) geführt.

Der Sprecher stellt seine Meinung dar, dass bestimmte Marktbewegungen nicht durch Gamma-Exposition verursacht wurden, sondern möglicherweise durch andere Faktoren.

Es werden Methoden zur Automatisierung von Handelsstrategien basierend auf Gamma-Exposition-Niveaus vorgestellt.

Der Sprecher warnt vor der Fehlinterpretation von Gamma-Exposition-Chart, die ohne relativen Bezug angegeben sind.

Es wird ein Fazit gezogen, und der Sprecher betont die Komplexität des Marktes und die Notwendigkeit, individuelle Analysen durchzuführen.

Transcripts

hey everyone today we are going to talk

about gamma exposure i'm very excited

for this video because i have some

unpopular and some popular opinions on

how to actually use camera and game

exposure to actually make plays earn

some money and profits do all kinds of

uh stuff with critics with our tools and

just sort of in general as well so let's

dive into all of this stuff right away

this video is sort of both for beginners

and for experts because there are some

insights that

i would hope you have not heard anywhere

else they're coming from all the data

analysis that we have done and our our

game exposure charts are slightly

different as well uh but without further

ado uh

let's start so

we are going to talk about what gamma is

so gamma is the

change in the delta of an options

contact as the underlying stock price

moves so let's assume delta is 0.5 of an

options contract and gamma is 0.1 if the

stock price goes from 400 to 401 delta

is going to increase from 0.5 to 0.6

because gamma was 0.1 now when delta

increases gamma increases as well and

let's say now gamma becomes 0.15

now if the price increases from 401 to

402 delta is going to go from 0.6 to

0.75 so it's a very abstract definition

a really good way that i think about

gamma is gamma is a speed

or momentum effect so as price is

increasing gamma since gamma keeps

increasing and it also keeps increasing

the delta ah this can cause a very sort

of momentum effect which is what we saw

with things like uh with things like

gamestop amc last year

and so this this causes these gamma

squeezes because it's it's it's it

causes exponential move since it's it's

increasing and then it it's also

increasing the delta as well so that's

what gamma is what is gamma exposure so

gamma exposure you just take in gamma

and for a contract you multiply it with

the open interest for that contract

which would be all the contacts that are

held by

customers right now and that gives you

the gamma and then you just sum that

gives you the gamma exposure for each

con for one contract then you just sum

that up for all contacts and that gives

you

the gamma exposure for the entire stock

that is what you are seeing right here

so gamma means scam exposure and these

each bar is a normalized value of the

gamma over the last year

so now we know about gamma and gamma

exposure

but why are we talking about gamma x per

year the the very first streak that

everyone knows when they start trading

options is delta exposure or delta why

don't we talk about delta exposure this

is a very important concept that not

many beginners know

so

now we need to talk about a dealer

positioning and delta hatching so

anytime you buy a call contract and i'll

just start with the call contact because

it's easy to explain anytime let's

assume you you buy a call contact

someone has to provide you liquidity and

someone has to sell you that call

contract

and that seller or that liquidity

provider here is a market maker

so you are buying a call the market

maker is going to sell you a call

selling a call is a bearish position and

market makers never want to have a

direction in the market they are there

to provide you liquidity and that's all

they are going to profit off of the bid

ask spread that's all that's their main

job so they don't really want to take a

direction but they just had to take one

because you were buying a call and they

had to sell you a call now in order to

hedge that

they are going to look at the delta of

your call let's say it's 0.5

and they are going to multiply it with

100 because each option is again and

gives you the ability to sort of trade

100 contracts uh 100 shares not

contracts they're going to take in the

delta of your contract and they're going

to multiply it with 100 that's 50. so

whatever position now that they had to

take because you wanted to buy a call

they're going to go against that

position so if they're selling you a

call and that means they're bearish

they're going to buy 50 shares of that

particular stock that you are trading in

options for so let's say for snp you buy

a 400 dollar call

and they're going to sell you that 400

call and then they're going to they're

going to buy 50 shares of snp now they

are delta hedged because the delta of

that contact is fully hedged so now if

the price moves up one dollar let's say

uh

the

if the price moves up one dollar and

delta goes from 0.5 to 0.6

there though the shares that they bought

are also going to go up but the call

that they sold is going to go down in

value so the shares that they have

bought and the call that they have sold

are going to offset profits and that's

what delta hedging is but hopefully you

will be able to realize by now that

delta hedging alone is not enough

because we have gamma we just talked

about it it is the change in delta so

delta is always changing it's not static

hedging as gamma and delta changes they

have to change the underlying shares

that they just bought they have to

either buy more shares if delta keeps

increasing and then gamma keeps

increasing as well if delta decreases

then they have to short those or sell

those or cover those uh

or sell those shares not cover those

here they have to sell the shares that

they just bought

so then that's what dynamic hedging is

and so anytime you buy a contract

dealers are so sophisticated these days

that they are

right away delta hedging that contract

so the delta part of it gets removed

immediately

and that is why we never talk about

delta gamma is the part that keeps

changing

and gamma is the part that they really

need to care about apart from banner and

charm flows which we'll talk about in

some other video

but delta isn't something that they're

they're worried about they're worried

about gamma and gamma exposure is

where this sort of this whole thing of

trying to understand what gamma exposure

is

and then trying to use it to predict

market moves or actually just sort of

anticipate different kinds of scenarios

so i just wanted to discuss why we don't

talk about delta because when i started

i did not know why people were just

talking about gamma and not delta delta

is always

fully hedged it's a gamma that causes

those dealers to then start to

dynamically hedge and that's where we

can get some alpha from

so

now that we know about

why delta does not matter let's talk

about gamma exposure again

so we talked about how to calculate

gamma expo here you take in the gamma

multiplied with the open interest then

sum sum sum of everything

that's

not really good that's one way of

calculating gamma square but it's not

good

so now that we know uh now that we are

saying it's not good let's talk about

why so now we are going to talk about

long

and short gammaxx for you what we are

seeing here

is negative gamma which means short

gamma and this is a chart for dealer

positioning so these are positions for

dealers so we are seeing here that for

snp dealers have been short gamma over

the last one here

now what does short versus long gamma

means anytime you are buying a contract

you are long gamma and anytime you are

selling a contract you are shortcut so

if dealers are short gamma since they

are taking the opposite trades of us

that means that customers have been

buying both calls and puts or just calls

or just puts but they have been buying

contracts because then they have a

positive camera and then dealers have

negative camera

what if dealers had positive camera what

if dealers have negative gamma how does

that affect the stock price or

volatility or things like that

so when dealers have positive gamma

let's talk about that example first

because there are obviously some days

where dealers had positive gamma

exposure when dealers have positive

gamma or positive gamma exposure

then as the price goes up

since gamma is the change in delta

as the price goes up one dollar

since gamma is positive dealer gamma is

positive the deltas of the dealers are

going to increase by the amount that gx

is giving us

and so when the deltas increase

remember they want to state delta has

and this is where dynamic hedging kicks

in they want to short in order to stay

delta hedged so when price goes up they

are actually required to short if they

are positive camera when price goes down

their deltas decrease

because gamma is positive

their deltas decrease they have to buy

back

their short positions and that causes

the price to go up so positive gamma can

cause a pinning effect or can cause a

stabilizing force in the market because

whatever the price is doing dealers have

to do the opposite of that and that can

have pin a price

what happens if they are negative gamma

as we are seeing in this screenshot here

if they are negative gamma then as price

goes up since we have negative gamma

price going up one dollar is going to

cause the deltas to decrease not

increase now because we are in a

negative gamma so dealers deltas are

going to actually decrease so as price

goes up

dealer deltas decrease dealers deltas

decrease and they are going to have to

buy more in order to stay hedged

and when that happens they are actually

supporting the price if price goes up

dealers are also buying

because their deltas are further

uh

decreasing

and if price goes down their deltas are

increasing so they're going to short so

then price is going down they're

shorting as well so that can cause a

momentum effect so these are some fairly

uh non-concepts that you might have read

somewhere else and i just wanted to

discuss them before we go into slightly

more involved topics so now i believe

you know about what a gamma is what

gamma exposure is how do we calculate it

uh what what's delta what's the role of

delta what's the static hedging then

what's dynamic hedging

now we are going to talk about the pros

and cons of how some people how some

products or how some platforms calculate

gammaxx per year versus how we calculate

it

so most of the time what people do is

they take in the gamma of a contract and

multiply it with the open interest

and then they assume that all calls are

sold and all puts are bought which means

uh deal for dealers the calls are going

to give them positive again my inputs

are going to give them negative gamma

because customers are selling calls so

customers are short gamma dealers long

gamers and customers are buying put so

the customer is a long game on the put

side delays are short gamma on the put

side

that's a very very

fairly

basic assumption and i hope you

recognize that

there is definitely not a case where

all calls are sold sold all puts are

bought and the reason this sort of

theory arrived was because most

institutions uh they are long snp shares

so in order to hedge that they can do

two two things in order to hatch that or

an extra yield they can do two things in

order to hatch that they can buy puts in

order to earn some extra yield they can

sell calls so that's where this theory

of like people are always selling calls

or institutions are always selling calls

buying puts i came from it's valued to

some extent but it's not

true especially for individual stocks

and even for

indices as well

so what we do

is we have something called a dealer

open interest where we look at each

position and we look at whether that

position was actually bought or sold

so let's say there are 500 the open

interest for a contract is 500 and then

we actually go ahead look at all the

individual trades that amounted to a 500

open interest remember open interest is

just the number of open contracts it

could be contracts that were bought to

open for that which sold that were sold

to open

so

we go into individual trade and then we

look at whether

whether trades were bought positions or

sold positions then we sum them up and

the net sort of value that we get is the

true dealer open interest or customer

open interest and then based on that we

calculate our gamma exposures urban

exposures and things like that

so that's a slightly better way we

believe of uh calculating mx power there

are more sophisticated ways of actually

using implied volatility surfaces that's

something that we're working on right

now but we don't have in the platform i

believe the way we look at the bid ask

and sort of whether the trade was a

board position or a sold position that

still works pretty well it's much better

than the very simple assumption of all

calls being sold all puts being bought

and so that's what we have but i think i

have talked enough

about

these

sort of concepts and i haven't really

talked about how do you actually use

gamma gammaxx per year from

our platform and i would hope most

people are here for that

so now let's actually go to

the jacks or the game explorer so we are

going to talk about the total checks

first and then we are going to talk

about the strike based so this is the

total jax

for s and p

and then on the on the x axis we have

the

on the x axis we have normalized x which

is the value of checks divided by the

max value of checks over the last one

year so this just gives us a range of

one to minus one and then we have on the

y axis

the future price change of one day two

day three day whatever parameter you

have set here so right now we are

looking at

what was the value of jax

and what happened the next day

you can see here that if checks is

extremely negative then price is

actually being pinned

and this is where

i have such an unpopular opinion

most of the papers or the blogs or the

videos that you see are going to tell

you that gamma exposure when it is very

negative and it makes logical sense that

when it is very negative it should cause

some momentum effects

but when you go and look at the data for

ascent p we are just talking about spy

for spx

all the things that we talk about that

we talked about actually hold true very

negative gamma does give you more

volatility but

snp or spy is an index as well it's a

very liquid index

so many people trade options in snp

but i have never read a paper or a i've

watched a video or read a blog post that

actually talks about the fact that gamma

exposure for different stocks has very

different profiles very different

volatility and movement profiles so for

snp

anytime we have very negative gamma we

are not really getting momentum place

what we are getting is a very pinning a

very good pinning effect in the market

anytime we have very low gamma gamma

close to zero gamma exposure close to

zero that's where we are getting the big

moves again each dot is a percentage

change the next day so it's a future

price change what happened the next day

objects today was 0 or minus 0.5 or

minus 1.0 and you can see how this is

like fanning out as we go towards zero

gamma or a very very slightly positive

gamma and this is causing more

volatility

and

i spent a lot of time just making sure

that this graph was valid and i forgot

making a mistake and i am not because

when you actually look at spx if you can

just go to spx i won't do that because

that'll take a lot of time but you you

can just go to spxa and look at the game

exposure their gamma exposure does as

fear in when we are in negative games

for your territories we have more

volatility but for snp this is what we

mostly trade we don't trade spx for snp

the profile is slightly different

and that's where this whole concept of

you need to look at the data for a for

each stock

before you begin to internalize or learn

patterns for that stock

there is no the markets are so complex

these days that there is no single piece

of information that you can learn and

just

extrapolate it to every single stock out

there that just does not work

and that's the first that's the first

unpopular opinion each stock has an

individual gammaxx for your profile has

an individual correlation to how price

moves with different gammaxx for your

levels

and this tells us that as a gamma

exposure becomes gamma experience for s

and p becomes

close to zero we get more volatility

that's a very very powerful concept

because more volatility gives us greater

reward and greater risk so

in the days when you have more

volatility you want to be ready you want

to be making big plays like you want to

be on top of your game and you want to

also contain your risk but in days where

volatility is like very low or the

change in the price is going to be very

low which is what we are calling

volatility here

you can probably just stay out of the

market and just expect some job in the

market i hope you can realize that as if

you can predict that if you can predict

how much price is going to move tomorrow

that is a very very powerful thing for

both options traders and for any other

kind of trader as well

so this chart we also have a bar chart

distribution based on this chart so the

higher the bars the more volatility we

are expecting the next day if you want

to look at the how does uh price changes

in five days uh

very similar correlations where as we

move towards zero gamma price starts to

change quite a lot the volatility

increases

and then we have this price distribution

we have discussed that in length in our

dealer positioning video but

we have talked about now a total gamma

exposure and how does it relate to price

movements

okay

let's actually look at spx

we just added data for spx uh a couple

of weeks ago so

the the dashboard is somewhat missing

which is why

i did not want to sort of go into the

details here but still let's talk about

it so let's go to gamma so here you can

see that

as we move towards positive gamma we are

squeezed a lot and if you zoom this

chart out you can't do that here but i

did it on my laptop you can see that

these bars are much higher than these

parts so in reality

what we are seeing is

volatility increases a lot as we do move

towards the negative gammaxx per year

for dealers level which makes sense

which we talked about

but i just want to emphasize that since

markets are so complex and we have no

idea what's the relationship

between spx options and spy options and

how are people

sort of trading these inter relatedly so

there could be a more logical

explanation but you have the data just

look at it

and know that there are certain

differences in and different stocks

different pairs of stickers different

indices and different things like that

so for spx most of what you read online

is true but for other stocks even for

spy it is not true so let's go back to

spy now

okay so it's a really nice chart because

it helps us predict volatility that spx

chart was a bit cluttered as you just

saw so i often use spy to predict how

volatile the next is going to be

now that we

have an anticipation of volatility i

want to mention that when you are

looking at total gx

do not use it do not use the total gamma

exposure to predict the direction of the

move

that is where a lot of people make sort

of try to use this they try to use this

price distribution chart

you cannot use the price distribution

chart when the correlation between the

next day's move and the gx is like 0.012

that's like 0 so that's telling you that

there is no predictive power in the

direction in the directional prediction

for jacks but there is a lot of

predictive power for volatility

prediction which is why you are seeing

this nice fanning out pattern as we go

to right the graph starts to expand

that's total gx

and that gives you a very good estimate

of future volatility that's again very

useful now let's talk about

a gamma exposure by each strike because

that's what that's like the hot thing

these days and a lot of people talk

about it i've spent the last four weeks

just dealing with gammaxx for your

levels now let's go to them

this at the game exposure level then

then the white line is simply a sum of

each level in a cumulative way so i'm

going to hide it by clicking here

this is what you are seeing

the game exposure levels are what you

are seeing right now the white the white

bars are where we are at right now the

green bars are where gamma exposure is

positive red bars is where gamma

exposure is negative and we have talked

about what happens when gamma exposure

is negative and what happens when gamma

exposure is positive negative causes

momentum positive causes

mean reversion

now

the very first thing that we saw with

snp was

our sort of logical explanation on what

happens with positive and negative gamma

did not hold true for spy it held true

for

spx

but

just for the sake of discussion here

because i think like this is so

important to discuss on like different

stocks having different profiles let's

still stick with this chart obviously i

think you might be wanting me to go to

spx chart we can probably do another

video for that just sort of analyzing

the game exposure levels for that but

but i want to stick with spy because

i've spent so much time with this

and

okay we have the positive levels we have

the negative level and these are just

based on uh you find the open interest

in a way that we calculate open interest

then just multiply uh it with gamma for

each strike and just sum it up across

all contracts for that strike and this

chart is what we're getting but this

chart is looking very very different

from the charts that you might see on

other platforms or online or somewhere

else because

this chart is all squished down to these

small bars why is there so much empty

space here

now let me go through some

very unpopular but data-driven insights

so most people say that when we have

negative gamma as price moves towards it

it causes these momentum effects so if

if there is very large negative gamma

let's assume at 392 then as price let's

say starts to move down from 40 400 to

399 to 398 it might quickly move towards

the 392 because again it's negative

gamma so as price is moving towards it

that gamma and the deltas are going to

increase or decrease based on what the

color is uh i are going to actually sort

of it's going to cause a momentum effect

because it's negative gamma and dealers

are going to support whatever move is

happening

and we have discussed that

and

uh one thing that i wanted to discuss

was like this is how gamma looks so as

we go close to those bars as we go close

to at the money or in the money these

gammas are going to like have start

going to a peak so this is a bell shaped

curve

which means once we reach at that bar

gamma is maximum but once we reach once

we reach like a head or

behind it like any time we are ahead or

behind that bar gamma is gamma starts to

decrease so at that bar is where gamma

is going to be maximum but as we are

let's let's assume this is a very big

bar red bar it's going down as we are

reaching towards that bar you can see

how gamma keeps increasing increasing

increasing and if you're in a negative

gamma regime then that negative gamma

keeps increasing increasing increasing

and that can cause that can cause those

deltas to change immensely or massively

and that can cause these momentum

effects but once we reach that

particular strike that's where

now the gamma is maximum so there is no

more momentum effect

so when i started learning about gamma

exposure levels i always thought that

once we reach these negative gamma

strikes that's where the momentum is

going to start that's not true at all

once we are reaching towards these

negative gamma strikes

is where uh

we are going to have some momentum

effects once we reach this green because

there is positive gamma on those strikes

then we are going to start to like

price is going to start to do the

opposite mm's are going market makers

are going to start to do the opposite of

what price is doing so it can quickly

repel the price or cause some pinning

effect

that's that's the theory behind trying

to choose a gammaxx for your levels and

anytime you see red you are expecting

the price to have some momentum when

it's going towards those red levels

anytime you see a positive level then

you are expecting the price

to start to at least stop or go towards

the opposite direction as it starts

reaching those green bars

we have a really good approximate we

have a really good variation of this

which we call

spot jets where

any time so all the negative gamma

levels above the current stock price are

converted to positive gamma levels or or

the positives are converted to negative

so we flip the gamma levels above the

current price

so that if there is a gamma level that

if there is a negative gamma level above

the current price it becomes green and

it looks like it can cause a momentum

effect or it can cause a bullish move

so these all of these green levels were

actually red as you can see but these

red levels if we moved towards them were

going to cause a momentum effect so we

just turned them like we just flipped

them and now they they have become green

because they were above the current

price anything that's below the current

stock price so we'll still keep acting

as it is if there is a red level below

the current price then again it's a

negative level it can cause momentum

effects but if a red level is above the

current stock price it can cause a

bullish momentum effect and that's what

we color green instead of red on the

normal gx chart and the green ones are

going to cause some resistance so we

turn them we flip them as well and that

can cause some resistance now so it just

makes reading gamma exposure very easy

okay

we have talked about the basic concepts

of how to analyze these bars and like

that's all you need to know but

i was thinking like if

this is that easy then why not build

some automated strategies

anytime we have let's say a red bar and

we start going towards it let's

uh just like create a momentum play or

create sort of a moving average or trend

uh strategy and then anytime you reach a

green bar let's stop let's exit and that

should work well that does work well but

there were so many caveats that i

learned over the last four weeks and we

are going to discuss those today so

one

the very first lesson that i learned was

all the charts that you see that you saw

online on tradition and that you still

see online on many other platforms and

i'm not really honestly trying to knock

down any other platform

i'm just trying to

convey what i learned and how it was so

important anytime you see a game

exposure chart like the one that you're

seeing right now let's go to the normal

game explorer

these charts are meaningless

if they are not drawn in a relative term

let me explain why or let me explain

what does what do i mean so let's assume

this red bar

was a gamma exposure of minus 200

million in notional value

let's assume that meant any time price

went up one dollars market makers had to

invest 200 million dollars in buying snp

shares

okay uh that's useful like we know that

marketing 200 million dollars is a lot

of money so market makers will support

us price will have a momentum effect

but how do you know 200

million dollars is a lot of money you

don't you like if you are a retail

trader then honestly you you don't

really know that

because for spx

even if there is like

20 billion dollar gamma level it will

still not be able to move the price more

than like 0.5 or even like a one percent

and these are just some sort of

statistics that i've seen in the data

like there is no logical explanation but

the point of telling you this is like

even if these gamma levels are huge

it is very hard to cause big moves that

happens with individual stocks but let's

just say for the sake of

snp it is very hard for game stop and

individual stocks sure it happens

sometimes and gamma can cause squeezes

in both ways up and down so that's a

topic for another time but let's just

talk about s p so now you don't really

know what 200 million dollars for snp

and 500 million dollars and 100 million

dollars in game exposure which is again

gamma multiplied by 100 multiplied by

the open interest just sum it up that's

the gamma exposure we multiply it with

sort of stock price and then

zero point

multiplied by stock price that

calculation is done in order to like uh

predict how much gamma is going to how

how much dealers are going to

short or go long

in dollar value if price moves up let's

say one person

those are just some some details that

you can you just ignore what i said in

the last one minute if you did not

understand it but the point is like it

is useless if you're looking at a gamma

exposure chart

and it is not in relative terms it's

just in plain terms like with hey here

is minus 100 million

dollars gamma exposure here is 500

million dollars gamma exposure in

positive negative whatever

that is not useful and

again i'm not trying to knock down

anything else i'm just trying to tell

you that i've done so many experiments

and looking at these absolute camera

levels looking at these levels in

absolute terms of what their value is

is not meaningful

okay why is that because any time

let's say 100 million

let's say there is a level that's for

blitz that has a value of 100 million in

gamma x per year

let's say the average value of

a level for the same stock let's say for

snp over the last two months

has been 600 million dollars now

if you are not looking at those values

every single day

you would have no idea that the average

value of each bar here

was 600 million dollars

and you were just you would just look at

that 100 million and if at that day that

100 million was the highest level

then you would just think that hey this

is the big level price will mean revert

from here because this is the big green

level

that's absolutely useless because that

is 100

versus the 600 average 600 million

average levels that we typically get so

that level is so small for that

particular stock for snp here that it is

not going to cause anything like that

level is completely meaningless and i

cannot emphasize this enough

as

when the relative value of these levels

is small

these levels are completely meaningless

it's when the relative value the

relative value being the value of this

the total value of

the jacks of this level or of this bar

for this particular strike

is greater than the main average value

of let's say the total checks that we

get for s and p or for these bars

if it's greater than the mean if it's

like let's say

like 50 percent greater like two times

greater or even just greater than the

main that's where like those are the

bars that we need to take care about

and so all of these bars that we're

seeing here are sitting at like 0.1 to

minus 0.1 which is like the value of the

bar divided by the total

average checks for snp

this is very very small

and now here is where like i see a lot

of people doing like going to misleading

conclusions so

now that we know that these these like

the chart that we are seeing is not that

meaningless and it is not that

meaningful sorry

now if we go to snp we can see that we

went to four zero two four zero one and

then we had a big move from four through

one all the way to 390.

and many people will look at this chart

if this was like a full chart and we did

not cap it we did not sort of uh

reduced the size of these bars just

because their relative value was small

people would uh look at it and they

would say that hey 400 401 were green

level so we there was some main

reversion from there and then these were

all red levels so there was some

momentum effect

then

maybe we

had to maybe we expected some resistance

at 394

which we did not really get

maybe we expected some support at 394

which we did not really like fully get

and then

there was a red level and then maybe we

expected some support at 392

and then we expected

the price to quickly

reach 392

and then we expected a strong support

and 390. now that's what this chart is

telling you and if you look at the price

that's somewhat what happened that day

we went to 390 we found support there

but but like the unpopular opinion here

is

that was not caused by gammaxx spoiler

and i know i'll get some flack for it

and i know

many people will not agree with me but

i am a data scientist and i have to say

things that i see with data

this move was not caused by cam exposure

it might have been caused by some other

exposures such as van exposure charm

some other kind of

some other thing in the market

but it was not caused by gamma expo yet

because gamma

was very very small

throughout the entire day so gamma x per

year was not strong enough to cause any

momentum

or any mean reversion moves it does look

like that but

i was talking about this with many of

our users

if you want to replace gamma levels

without knowing any gamma exposure

values just draw a line just draw a

support line at every round number so

400 390 380 370 and then even to like

five

as well 400 395 390 385 and you'll find

that those levels work pretty well those

are not like because of camera levels

that's just because most

of the options contracts

are traded at these round values so

there is just like a lot of dealers

sitting on those positions and that can

cause as price moves then we have

bananas for your charm expo here so

there are a lot of complex forces in the

market

that can cause those price at those

levels to become levels of interest

it is not just because of camera and it

is not due to gamma exposure alone

in this case i believe it was not

because of gamma exposure at all

and that's the hot take from this video

and i hope uh you'll think about it and

you'll do some do you'll do your own

analysis and you'll come up with

different conclusions now

if this level was a huge level let's say

if this was a huge red level

it was going towards minus 0.5 that's a

significant value

anything greater than 0.5 just

empirically i've seen that it's a

significant value now if these bars were

very very big

then if we had a move similar to what we

had then we might have been able to say

that just that move was probably caused

by gamma expo

not not here but

now when if these red bars were huge

then what would happen what would we

expect is as price

starts to let's say come down

we would expect these red and this is

important so please listen carefully we

would expect these red big red levels

to act as magnets

they'll act as magnets until price

reaches towards them

and then they will not cause a momentum

effect once the price reaches towards

them this is something that i did not

get when i started looking at gamma i

always thought that price will cruise

through these levels it doesn't these

red levels negative gamma especially for

snp

can cause even for other stocks and

again you can do your own analysis here

but this is what i have observed and

learned these big negative gamma

exposure levels can cause the

cause the stock to come towards them and

that happens because this is how the

gamma distribution looks

it peaks at these

at the exact value of these strikes

because we are coming towards them so

gamma keeps increasing but once we are

at i once we are at them gamma is not

going to increase anymore

okay so now what happens is

price can quickly come to these levels

but it can sometimes have a hard time

going away from these levels because

let's assume this was a big red level so

price came towards it quickly now it

starts to let's say there are some other

red levels so it starts to go towards

them but anytime it even makes a small

move back

this red level has still a lot of

negative gamma so any move is going to

get exaggerated so if we start moving

back then this red gamma since it's very

negative it's going to pull price

towards it again

so instead of causing a momentum effect

once we reach it it is going to cause a

magnet effect so it is actually going to

try to pin the price

on a big red level

people think that these big green levels

are going to cause this that's not

necessarily true

when we reach these big let's now assume

again these levels were big they were

high they were not really small when we

reach a high green level

now anytime price even starts to divert

from them

that price is going to divert a little

bit more especially if there are red

levels around these green levels so in

my analysis what i have observed is that

when we are moving towards that

bars that can cause a momentum effect

but once we are at big red bars that can

cause a pinning effect when we are

moving

when we are not moving when we are at

these green bars they are going to repel

the price because market makers are not

now going against what the price is

doing so that can cause actually a

repelling effect where once we reach

this we are going to even like this day

you can see that we ended the day on the

red bar not on the green bar

let's assume this was a big gamma day

and this was all because of game

exposure you can still see that like if

you don't agree with what i said earlier

on on the relative value even if this is

the chart that you were looking at you

can still see that we closed on a big

negative gamma level not on a big

positive gamma level

and

that's

basically it for the video and it

probably went a little bit much longer

than

what i had anticipated but i had so many

thoughts because i have been like knee

deep

into all the analysis on how to actually

choose scam expo here most people use

game exposure for snp for spy not for

spx but

i would love for other people to now go

ahead use some of these findings and

actually see how they work with spx i

would hope they work very similar

especially the one where we are talking

about the strikes and the relative value

of these strikes and the bars

and things like that and things but

that's it for the video the last two

things that i'll discuss is that we do

have filters uh to filter for gammaxx

per year that's expiring within seven

days within 15 days within 30 days many

people want to use these filters i'll be

very honest i don't think there is a lot

of value in using a dsl expiration

filter because

gamma is already very concentrated in

near-term expirations so there is no use

of using a digital expiration filter

when the thing that you're looking at is

already concentrated in shorter term

expirations so most people like there

are so many i believe misconceptions

about how to actually use gamma levels

and we have discussed some of them

but some people still want to use these

filters and sure and there is some gamma

obviously in slightly longer term

contacts as well so you might want to

skip that for shorter moves sure you can

do you can do that

but yeah i i don't think there is much

value in there so we have talked about

gamma gamma exposure why don't we

talk about delta exposure how do people

calculate gammax for your total gammaxx

per year and when to use it and then

strike based cam exposure and how to use

it

and we have talked about different

variations spot checks and checks and

then we have talked about talked about

some filters and i will i would like to

quickly go through one example here so

this is

the gamma exposure uh these are the

gammaxx period levels for iwm and these

were

bigger than snp so that's why i'm

discussing them you can see

one thing that we have recently

introduced or sort of discovered is that

anytime we have these like

low

gamma exposure bars

that region is an illiquid region so we

are assuming that market makers are not

sitting strongly

during those regions where we have low

cam exposure and let's also assume low

other exposures such as van and charmix

per year

that is what we call an illiquid zone

and illiquid zones are we as customers

or traders really want it's not the

large gamma zones or the large vana

zones that we want sure we'll do some

analysis we'll do more analysis we'll

talk about them but right now

where we are standing i believe we want

this illiquid zones because market

makers are not doing anything in those

zones

and we can probably get much faster

moves since we are passing through those

zones or once we are in those zones

and this is just an example so this zone

this gray zone is what we call an

illiquid zone because there was not much

gamma in there you can see price quickly

moved here and then this was obviously a

resistance level we had some resistance

we very made we very quickly made a down

move as well

so this was now since this has this had

slightly bigger gamma levels

you can see price quickly moved towards

this level and then

obviously we would expect some kind of

once price was starting to move up we

would expect some kind of resistance if

price moved

we would expect some kind of sort of a

pullback as the price moved just a

little bit down which we did not get

here

then the price uh

went down and you can see like both this

level and this level

this level was actually i believe the

highest level both of these levels

quickly pulled the price towards them

but then anytime price did anything else

and it just came back a little bit this

level would uh quickly pull it towards

uh towards itself as well and that

happened like here here here here so you

can see like price quickly reaches these

levels but

once it starts going

below above these levels then these

levels at least try to pull the price

towards them and then anytime we are in

these illiquid zones

that's where the price can

slightly move freely so let's actually

look at spire because i do think we had

an illiquid zone here

so i'll just draw the gamma exposure

levels

okay so this is the zone that we i am

talking about so we had some let's say

gamma at 392

then at 396 398 and 400

sure let's just skip those gamma levels

because they were very low i believe now

i'm just wrapping up the entire video i

believe

some of this move was probably caused by

some factors sure include game exposure

as well if you want to but i think the

move from

about 400 all the way to about 392

was actually caused because of ill

liquid regions not because of cam

exposure

because there was let's say there were

no dealers sitting on big positions here

so they no hedging was required price

could do whatever it wants to do without

dealers being involved and that's always

a good thing we don't want them to be

involved all the time because they are

doing all kinds of hedging and there are

not just camera catching there is like

banner hedging and charm hedging so that

can cause like weird effects and since

that's such a complex topic

it it's much easier for us when they are

not there at all and that's where these

ill liquid regions come in i do believe

like from here onwards to here

till till this level we had a very

illiquid region and that caused the

price to quickly go down i don't think

it was the negative gamma strikes or it

was the negative gamma that we had i

think it was the illiquid zone

and with that i'll stop this video

because it has already gone very very

long and thank you so much if you have

made it this far like that that was so

much information and sometimes i i

believe i went on a rant because like i

had so many things on my mind and i hope

this was still useful for you and this

gave you some perspective on

how to actually use gamma levels if you

do want to use them but then how to

actually navigate through the pros and

cons of gamma and gamma exposure and

gamma levels and again i just hope this

is useful for everyone i hope you have

some idea on how to actually use our

gamer levels and yeah just you i hope

you learned a couple of things from this

video thank you so much for watching

this i will see you guys around