Hi everybody, welcome back to the Bear Trap podcast. My name is John Kirby. This is going to be another solo video. Actually it's an introduction to Gexbot.
So I actually recently did an interview with Jasper, the creator of Gexbot. And this is another part of that series. This is sort of more of an educational introduction to the tool.
And as part of that I'm going to be talking about gamma exposure in general for those of you who are avid listeners of the podcast, of which I know there aren't too many, but those of you will already be familiar with a lot of this gamma exposure stuff, but you might still learn something new. What I'm trying to do here is to provide an introduction which dives into the why of gamma exposure, why all this stuff works. With the interview with Jasper, we sort of ran through a little bit more of the how, right? How to read it, sort of more how to trade it, that sort of thing.
And so this is really sort of that fundamental, important understanding of what the tool is saying, what it means when it's saying that. And I think that that's really important. I don't think it's worth skipping over and just jumping to using it because whenever something goes wrong, right, if you don't know.
what the basis is, then you're not going to be able to understand what happened, and you're not going to be able to correct for your mistakes, etc. So I think that really understanding this part of options is very important. The other thing to say is there is a lot, a lot of gamma exposure content out there, so this is by no means going to be the most exhaustive or the best. There's a lot of resources like SpotGamma, Gamma Edge, any array of gamma names, articles online.
what not, the Bear Trap Discord itself is a great resource as well. But what I'm trying to do is just provide something relatively short so that you'll be able to get a deep dive quickly and know more or less what's going on. So you'll see on my screen, I have Gexbot up already.
It's running live. And this is just kind of where we're going to start. So for most of those of you who have traded options before. You know that options are distributed across strikes, you can buy a call or you can buy calls or puts, you can sell calls or puts.
And so there's those essentially those four possibilities, right? Four really, really basic possibilities. Then in order for those transactions to happen, you also know that, well, somebody has to be on the other side of them, right? Like if you're going to buy a call, somebody has to sell it to you, right? Because these are fundamentally contracts between people.
or institutions or whatever and it's an arrangement that we make if I buy a You know a 4090 SPX call from you expiring today, then you know I make I make a hundred dollars per point for every point at expiry above 4090 so a lot of times That was me drinking coffee, by the way A lot of times when people talk about GABA exposure, they talk about the market makers. And what they mean by market makers are whoever's on the other side of that transaction. And the implicit assumption there is, hey, most of the people or most of the entities on the other side of that transaction are larger entities, which are performing the function of giving immediacy to market participants.
Right. So, for instance, if I wanted to buy a very specific option. and there was nobody out there to sell it to me, it might take me a really long time to make that transaction happen. Whereas if there is an intermediary, and that intermediary is buying and selling options all the way along the chain all the time, then they could sell me the option that I want and compensate with two of the different options. So essentially bringing buyers and sellers together.
What ends up happening, though, and the reason that people talk about market makers when it comes to gamma exposure is that they're... is often a sort of a buildup of inventory. And then that's what we call exposure. It essentially means, well, so many people have transacted so much of this thing that if the market were to go in a particular direction, say in this case above 4090, if we've all bought 4090 calls, well, whoever's on the other side of that is going to be in trouble, leading to the enigmatic gamma squeeze. Of course, it's important to remember that, hey, actually, Market makers are on different sides of many transactions all at the same time.
So it isn't as simple as saying, oh, this is not the simple characterization of market maker inventory. Not at all. Rather, what we're doing, and I'm going to get into this in a bit, is just sort of monitoring the overall traffic.
And the intuition behind that is market maker or not, it doesn't really matter. The point is that if you sell an option, you're taking on more risk than if you buy an option. Because if you buy an option, you know exactly how much money you had to put down. Whereas if you sell an option, it could go against you.
And if it could go against you, depending on which option you sold. you could be in for way more than you originally sold it for. And so the idea is that there's an asymmetry there, right? Sellers of options in general have greater obligations, or in theory, they ought to be more cognizant of their obligations and hedge them better than option buyers.
So that's how I jump over the whole market maker, non-market maker debate. And I think that's a much simpler way to think about this. Okay, so granted, we want to monitor overall inventory. Why is it, you know, in the first place that we're doing any of this monitoring?
Like, why is it this is relevant? Because of course, like five years ago, nobody cared about this stuff. It just so happens to be the case, and I'm sure that most of you guys have heard about this, that there's some crazy statistics like 44 to 50 percent of overall notional value dominated by, like overall notional value.
traded on the index itself, whether it's SPY, SPX, whatever, is concentrated in zero DTE options. In other words, the point is, an easier way of saying this is, it used to be the case that large share transactions, transactions of the underlying in addition to other factors, mostly controlled the price of the indices. Now it just so happens to be the case that There is so much volume of options and there's so much leverage in that world and the options are operative on such a short time frame that it is the paradigmatic tail wagging the dog. The options are moving price.
And so as far as all those volumes are concerned, you know, you don't have to take my word for it. I don't have it up now, but you can take a look at CBOE. They have great statistics on this stuff.
As far as gamma exposure. or rather sorry options being the tail that wags the dog the easiest way to see that is gamma exposure and you kind of have to spend a little bit of time with the markets themselves in order to see it so you know that's not something i'm going to do for you obviously nobody's going to do that for you if you spend time with a tool you'll see whether it makes sense to you or not i'm just here to sort of explain to you give you an introduction as to what it's looking at and how to understand it in any case Let me actually jump over for a second to an option table because that's what we need to do in order to start to understand what's going on with this chart. So here's just like a you know an option table from the CBOE and right we have like all of our familiar bits and pieces.
It doesn't really matter what strikes we're looking at or anything like that it's just the important thing is just that we're looking at a table. So we have bid ask for calls, bid ask for puts, and then we also have volume, which is right here. So it's how many contracts have been transacted so far today. And then we have INT or open interest. Usually we refer to that as OI.
And open interest tells us how many contracts of this particular option were open as of left open as of the close yesterday. And then you also have your options Greeks, right? A lot of you are familiar with Delta, Gamma. Of course, we're going to be focusing on gamma a little bit here.
But let's think a little bit about delta first, right? So options are weird, right? Because an option, at least a standard option, it's not for one share. It's for 100 shares of the underlying. But the weird aspect is that we don't know if it's going to expire in the money or not.
And so the whole idea behind delta is that it's a fancy. equation, Black-Scholes and Merton equation, there's a lot of different, there's like binomial models, there are different models that you can use to calculate these things. But essentially, what it's trying to do is it's going to tell you, if your option were shares, right, then how many shares would it be?
And the reason that that's important is because if, let's say that, you know, you have a 49D call, and SPY is, or SPX in this case, is trading at 4090, you can see that, you know, it's kind of where it was and so you have 0.48 delta. That means that this option is simulating 50 shares, meaning that if the price of the index were to move up by one it would be as if you had 50 shares in terms of how your option is going to appreciate. But because of the binary nature of options, in other words expiry in the money or not, and if it doesn't expire in the money then it's worthless, there's this interesting phenomenon where as you go further in the money deltas increase towards being 100, right? Towards one, like 100 shares.
And as you go out of the money, they decrease. And so whenever, like, let's say you buy in at the money option, it's going to be approximately simulating 50 shares. As that option goes in the money, it's going to progressively simulate 55 shares, 60 shares, 65, 70, right?
So not only is the option going to get more valuable. But the rate at which its value is increasing is also going to increase. That's why derivatives, right? The rate of change is relevant and the rate of change of the rate of change is relevant. So delta essentially is going to tell you how many shares your option is going to simulate.
And gamma is going to tell you the rate of change of your delta with respect to price. In other words, if you want an option that is going to, whose delta is going to increase the most for a move in the underlying, then you want an option with maximum gamma. So I'm actually going to hop over to some curves so that we can understand that. Sorry, very intense white screen, but okay, so gamma versus call delta. Again, we're going to stick with calls just for simplicity's sake.
One second, I'm going to drink some coffee. All right, so your gamma curve is going to look like this bell curve over here, right? And the center of it, it doesn't say here, but the stock price in this particular example is around 25. And so your maximum gamma, and this should kind of make sense intuitively, is actually going to be the at the money call or the at the money put.
And the reason for that is because those options are on the inflection point of either being worth a lot or being completely worthless. so that's the maximum gamma that is the point at which the delta will inflect and start to either increase rapidly or diminish rapidly. If you look at this delta curve and again this is a delta curve for a call specifically you can tell that and i think that this is gamma value in any case right here this is going to be around 0.5 delta because it's at the money and then as it goes in the money it's going to ramp all the way up to one. So oh yeah, so they have this axis actually does the Delta properly.
Yeah, and so there is this inflection point right here of the Delta curve Which is the share simulation Aspect of the option and that inflection point is very very well captured or it's precisely what gamma captures It tells you at what point is this option going to either be worth a lot or be worthless at what point is it? capable of It's not quite, but we can think about it like exponential movement, right? And the reason this is important is, hey, what if you're an option seller, right?
What if you have the obligation, you're on the other side of that, and you have the obligation to deal with whatever happens to that option? Well, then the maximum gamma is the point at which you have maximum risk because the call option, in this case, the call option could go from being worth the little bit that you sold it to all of a sudden being worth a ton, or it could become worthless. But this is your point of maximum risk and that's why we're interested in gamma. Okay, now we're gonna make the transition from gamma to gamma exposure.
So all of you will remember hopefully that when we were looking at this option chain, right? I was talking about open interests right here and open interest designates specifically the number of contracts that are left open from the previous day of trading. So typical gamma exposure, all it does is it grabs this open interest, it multiplies it by the gamma, right? Because we want to see, OK, not only do we want to see what's the point of maximum exposure, but we want to adjust that point of maximum exposure for how many contracts are there actually there.
And then we'll also multiply it by a factor that will tell us what the hedging obligations would be if price were to move. So and this is like pretty much common knowledge. If you look at here, like this is a, you know, one place to find the calculation.
It's just options gamma. This is the total gamma contribution for each option. And then we'll move down to the next part.
So options gamma times contract size times open interest. So contract size for SPX is just 100 all the time. For most options, it's just 100. Open interest, which is what we just talked about, times spot price.
And this is just a matter of convention, but usually we use positive 1 if calls and negative 1 if puts. And if you look over, I'm going to hop over to Gexbot for a second. So you can see gamma exposure over here, it's in billions because we haven't done the final adjustment, but negative over here so these are puts and positive over here and right like this is our histogram all of our strikes, calls over here, puts over here.
The other thing that we're actually missing here is what we want to do, we know that the gammas of puts and calls actually cancel each other out because the curves look the same. So what's really nice that we can do is we can literally take this open interest, right, this open interest, do the gamma multiplication offset them from each other to figure out how much exposure there is at that particular strike and that's actually how we get to gamma exposure with this final little bit of multiplying here so i'm not really going to get into the very specific dimensions of how how the math is done but and this is actually quite useful i think He puts it here in plain English option dealers need to sell and by dealers He's saying people on the other side of the people who own those options need to sell 19 billion worth of SPX index for each 1% move down and by 19 billion for each 1% move up according to those open interest numbers multiplied by the gamma exposure Right. This is if they want to stay a delta hedge essentially So, um, yeah, that was a really quick intense introduction. Hopefully these resources are all relatively clear. So the point is, and I'm going to go back to Gexbot now, and I'll be clear as well, the open interest that we're talking about right now, because we haven't moved on to Gex by volume, is the red.
So open interest is what we see at the beginning of the day. So let me scroll all the way back to the beginning of the day. And you can see how at the beginning of the day, we only have open interest numbers because no volume has...
entered the picture. Right, and so if we were to look here we have multiple things that are happening right just to remind you we have call open interest put open interest being multiplied by their respective gammas then being multiplied as well by i'm pretty sure it's a spot squared because i think that Gexbot uses actually coincidentally the same yeah it's the same methodology as this particular site so What's going to happen is these bars are indicating how much dealers are going to need to hedge, given where spot is. And the bars are going to change as well, because the gamma of these specific strikes is going to change as either spot moves up or spot moves down.
So for instance, let's say that, just keep an eye on the red bars for this. In fact, maybe what I can do is I'll turn off Gex by volume. Can I do that? I don't think I can actually turn it off.
Yeah, I can't turn it off in the historical. In any case, if you look at, we'll observe what happens as spot moves, right? So spot moves, again, oh, sorry, spot price is this 4083.20. It's this kind of line here. So yeah, anyway, it's coming.
there you go as spot moves down see how the 40 50 strike expanded it's because it became closer to at the money so the gamma of that particular strike expanded so the hedging obligations for people who are on the other side of that strike are increasing as price is coming down in fact we can we can quantify it right they started around 2.5 billion and then they ended up going to you know by 10 30 it was more like you know 3.9, 4 billion. So yeah, that's gamma exposure by open interest. So one issue that we have is that, well, open interest just tells us the open contracts from yesterday. It doesn't tell us what the hell is going on today. And so what Gexbot does is it makes the naive assumption that, well, the way that they put it is all calls are bought, all puts are sold.
it doesn't really matter. They basically just take all the volume as if it were opening volume. And so then they perform the same calculation, except they use the volume column here.
So volume here, volume here. And what that does is it basically just assumes that every single... Oh, that's what I meant to say.
It assumes that every single transaction that occurs is to open. contract rather than to close a contract. So as we see the day progressing you can see how these maroon bars here are actually growing and growing and growing and growing. And some of that has to do with where spot is moving, right? Because of course max gamma is always going to be the strikes right on spot because those options could either be worth a ton or be worth nothing.
So it's the inflection point like I was talking about before, but another part of these bars growing and you can see hey the 4050s in volume are growing a lot as well. The second component that's making these bars grow is that volume is coming in. And more options are being transacted at those particular strikes And so this is giving us a pretty good understanding for how exposure is changing over the course of the day now, of course It is not the case that every single transaction is to open a contract It's not as if contracts are just being added and added and added Some people are bailing on their contracts from yesterday or bailing on their contracts intraday and closing them but That's something that's very, very difficult information to gather.
And what Gexbot has noticed, what I've noticed as well, is that this particular methodology actually gives you a very, very solid idea. And you have to use a little bit of your intuition. So, for instance, if I see that this 4100 call strike is growing in volume, which it has been, and let's say that at the same time as I see it's growing in volume, spot price is actually falling away from it, then it makes sense to infer that a good number of those transactions are likely sells, right?
So people are getting out of them or even selling to open those. They're selling those options essentially. So you have to spend some time with the tool to figure out, to start to see, okay, well, how does, how do these volume GAM exposure by volume nodes interact with the price?
And then you can start to build up an intuition. for how that is. A lot of times, for instance, this is a really good example.
I think in the interview with Jasper, we were talking about this. If you see price just consolidating and a node that's pretty far out of the money, like let's say this 4,100 is just growing and growing and growing in gamma exposure by volume, then it's a pretty solid indication that people are actually adding to it, right? Usually you only really see people bailing out of calls if price is actually moving away from that strike.
And so it means, oh, they're loading into it. So somebody knows something that I don't, and they're likely loading into 4,100 calls because we're going to make a move up there. Do I think that that's the case today? Honestly, I'd have to check, but it actually looks like it might be.
Yeah, because price has been consolidating. It would not be unreasonable to expect a move to either 4,900 or 4,100 by the end of the day. But, you know, still early in the day, so who knows?
All right, let me think if there's anything that I have missed in terms of the why. I think that's pretty solid. There's some little, a few informational points to make here.
So for instance, when I'm looking at this option chain, right over here that I was using as an example, this is just calls and puts for Wednesday, April 26th. But what Gaxbot actually does is it synthesizes the entire option chain. So it's taking every single expiration and blending it all into this one thing that we see. And they're currently working on isolating just zero data expiration gecks because it's so relevant. But I will say that it doesn't necessarily matter that much because, and this is something that I don't really necessarily have up, but intuitively you can kind of understand that, right?
Gamma is so intense for at-the-money options because they're at that inflection point of either being worth a lot or worth nothing. But as you go further out in time, gamma actually diminishes significantly because there's more time until that option is either worth a lot or worth nothing. So it's no longer quite at that same inflection point. The real inflection point happens with the really short-dated options.
So you'll see that eventually when this feature gets implemented and you switch between zero DTE options and... you know the rest of the entire synthesized option chain you'll see that there's not actually a huge difference in terms of gamma exposure and you know that may change going forward as if people start to move out of move away from zero dte options into other options but for now that's sort of just how it is all right i just wanted to go run through a couple of the sort of more visual aspects of the tool before moving on to looking at SPX. So I'm just going to run through this in case there are any questions that come up.
So in this sidebar, we have the date, just to make sure that we're on time, spot price, so that's spot price of SPX. we also have this whole part of this whole box here is for gamma exposure by volume right and then we have zero gamma and zero gamma is essentially if so let's say I start at the bottom of the chain right and then I work my way up and so I add this strike to this strike to this strike to this strike to this going all the way up and like these are all negative right so it's like some negative number and I can number negative number and then I have and then I move up here and then I get positive numbers up here. It's basically trying to find what you would call the flip point at which or the balance point where all of the positive stuff is offsetting all of the negative stuff.
That's zero gamma or zero gamma by volume of course would be using these red bars zero gamma by open interest which is I actually don't think they have it on here but it would be the same thing just using these the red bars instead. That level can actually be quite significant because it will tell you whether the overall complex, like whether hedging pressure coming from the overall complex is tending towards pushing price down or pushing price up. So it's sort of a really good way to get intuition for what is the midpoint of the day. It's kind of like a gamma type of VWAP, if you've ever used that.
So, OK. Then major positive gamma is just literally the largest gamma node and we can tell right now it's 40. It says 4089 It's really the 4090s Which are which are right here and you can see that and then major negative same thing for the negative. It's the 4070 These are kind of the guardrails for price over the course of the day Like if price gets under 4070 or above 4090 you should expect some fireworks like it's gonna really start to move in that direction Because, of course, the people who sold all those options will be caught off sides. They'll have to hedge and then it'll be either gamma squeeze up or gamma squeeze down.
So it's nice to have those two guardrails. And then net gex is just whether the overall complex, like if I were to add every single bar, do we have more negative or more positive? In this case today, we have, you know, we have more negative. So the next thing I want to get to, and this is actually a very, I think, underutilized and one of the most.
interesting and important features of Gexbot and it's these dots here right so the dots allow you to see and it says it here let me actually pull up this little color thingy here so you can see how it's different shades of blue and you can change those colors obviously one minute five minutes 10 minutes 15 minutes 30 minutes and so it tells you has this bar been diminishing or increasing over the course of the last few minutes so it essentially performs the same function As this history slider that lets you see, okay, how did gamma exposure change over the course of the day? Which is really cool, by the way. I'm just going to slide it slowly so you guys can take a look. And you can see, oh, wow, those 4100s were really growing for a while, really growing for a while. And now they started to kind of taper off there.
Very cool. Actually, it kept on growing all day. Oh, and they only started to taper off around 1230. Okay.
Let's get back to live action. Okay. in any case these dots allow you to see that sort of temporal dimension right now. So I can see, okay where was the 4100 five minutes ago? Has it increased or diminished since in the last half hour?
And that can be really important information because especially like I was talking about before if you see that for instance the bar like the dots are all on the inside then you can tell that it's been growing consistently over the course of the last half hour whereas if all the dots are on the outside you can tell oh it's been shrinking consistently over the course of all the last half hour and by inside outside i mean whether the dots are embedded in the bar or whether they're sort of in the space behind the bar or outside the bar and so you can get a sense for whether obligations are increasing or diminishing at that strike So that first part of the video, that was the vegetables, so to speak. We're eating our vegetables, figuring out the basis for this fun chart. And this part of the video is just going to be about how price responds and moves around gamma. I broke it up, so we're actually further in.
This is just about, we're just near the close here of the day. Today is the 26th, if anybody's wondering. But I'm actually going to start by going back a little bit, and so to around where we were earlier in the day.
So we're going to load today. Let's go back to what we were talking about before, and we were looking at those 4090s. So given what we know about the gamma exposure and hedging obligations, we can sort of start to infer how price is going to behave around a good and strike. And for that, I'm going to go over to this chart again. And so, right, if maximum risk for an option seller is right here, then anything coming up.
to the at the money is increasing increasing risk and then anything beyond here is decreasing risk. So this is why a lot of times you'll actually see for instance if we're focusing on okay maybe for the purposes of this this part of the video we'll talk about the 4100 if we're focusing on the 4100 and assume get rid of all these other strikes like let's just think about this one isolated strike this one isolated curve As we're coming up, the risk for holders or for the sellers of this 4100 call contract is increasing. And it's increasing because the game is increasing like this, right, until we get to 4100. So they actually are being forced to buy deltas all the way into 4100, which is what they're going to be doing, buying deltas, which is going to push price even further into 4100. But as soon as we've hit 4100. their risk in terms of pure deltas, it's still increasing if price passes the 4100 strike.
But in terms of the rate at which those deltas are increasing, their risk is actually diminishing because the gamma is actually tapering off. And so you can see that in this delta curve quite clearly where the rate at which the delta is increasing is itself increasing until around here. and then all of a sudden it starts to taper off.
So what that means is that once we've already hit the 4100 strike there is not as much of an incentive to push price beyond it, which is why these big gamma nodes tend to be quite sticky, or these big gamma strikes tend to be quite sticky. In fact the only way that we can really get beyond the 4100 is if people start to liquidate their 4100s and pile ours with 4105s. Or they don't even need to liquidate the 4100s, they can hold on to them.
But we essentially need enough people buying the 4105s that we get this sort of laddering effect where all of a sudden there is a new gamma curve that's principally moving spot and that gamma curve is sort of like the next magnet essentially, right? So we can kind of think about it like that, right? Like with at least for the purposes of a call if we're underneath that call and that call is being added to, then it actually, from a gamma exposure perspective, is pulling us up.
And then as soon as we get above it, again because the gamma of that particular strike is actually going to be diminishing the further we move away from it, it is actually pulling us back down. So essentially attraction below and actually attraction above too. And something similar can be said for put strikes. With this 40-50, if people are piling into the 40-50 and they're increasing risk at the 40-50 level, then hedging out that risk is going to drive us closer to 40-50.
But once we've already passed 40-50, it no longer acts in the same way. That being said, the behavior of call gamma and put gamma is slightly different because you have a volatility component which maybe I'll get to in another video. That's a little more complicated right because typically as price moves up volatility contracts and as price moves down volatility expands.
So this 40-50 once we pass it, it has slightly less of a tendency to act as a magnet from underneath. If spot is trading underneath a big put strike. it's actually more likely to continue lower rather than to hang out right underneath that put strike.
If it's above that put strike, then that's a completely different issue. But in general, we can say that we can look at these big strikes as magnets and think about them also sort of in the sense of... One of the experiments I like to...
I like to kind of run in my brain is just to think about all these strikes as a ton of superimposed gamma curves on each other, right? So you'd have to draw a gamma curve around here. around the 4110, around the 4105, around the 4100, probably a bigger one over the 4100. And then this chart is actually just showing us a ton of those gamma curves superimposed on one another.
And so if you were to imagine, and there are charts out there that do this as well, for instance, like I think that spot gamma has one, and it kind of shows you peaks and valleys, so to speak. But in this particular case, the run up to the magnet here or the magnet zone around 4090 and 4085 and then to 4100 it seems to be like highly incentivized but then it seems to be very very difficult to get above and over right so it's almost like there's an easy ramp up but then it's harder to get over that peak right the like gamma peak so to speak in any case that's probably a pretty decent way to at least start thinking about how these strikes affect the movement of spot. The last thing that I'm going to get into is just that there's a little bit of reflexivity going on here.
So if multiple market participants know that 4100 is likely to be a sticking point, many participants who have calls that are 4100 calls are likely to liquidate when we reach that level. And so that also makes right and this is This is how these gamma exposure profiles end up operating somewhat like general market volume profiles, right? Because there is that reflexivity involved there. And then another component, which kind of adds to that, is that let's say that I'm buying an option, right?
And I think that the market's going to go up really, you know, it's going to go up a certain amount. Then I'm most incentivized to hold an option. for this zone between right around this amount of gamma and this amount of gamma, right?
So I want maximum gamma because it's giving the maximum amount of convexity to my option. As soon as we've hit, like as soon as my option goes in the money even by a little bit, then all of a sudden I'm in a completely different situation because I'm no longer getting the maximum convexity from that option. Now I could have a different sort of strategy which recommends holding on to that option for some other reason, but if I'm just playing the move then that option is not the most efficient one to hold on to anymore.
So either I need to move to another option which is going to be over here let's say so that I can ride this what I call the gamma ramp again or I need to liquidate that option. So that's another aspect of not so much reflexivity but just market structure or options pricing structure that ends up making it such that we have a tendency to stick around large gamma nodes. which going back to the beginning of the video is why I was talking about you know these as guardrails as major negative and major positive gamma as guardrails for the general market and even more broadly why a lot of the times this zero gamma can operate as sort of a balance point for the overall market yeah in any case in another video I'll get into some of the more complicated aspects especially going into the close I mean you guys can see that things get pretty crazy as we go into the close even not zoomed in all the way.
Let me actually scale it down a little bit so you guys can see how crazy that is. But also it's not a coincidence right that we saw that 4050s were building, we ended up right on major negative gamma, pinning major negative gamma for the day. But that's again that's the topic for another video.
So there I'll talk a little bit about what I was hinting at with regards to the role that volatility expansion or contraction can play into navigating checks. and then also the effect of theta or time decay on a lot of these gamma strikes and how that influences the nuclear spot. But yeah, I hope you guys enjoyed this one and like and subscribe and I'll see you in the next one.