When news-driven momentum meets a negative gamma environment, stock price movement can accelerate quickly. Hims & Hers Health (HIMS) delivered a clean example of this dynamic, as a major partnership announcement set the stage for continued upside.
After a sharp multi-day rally, SpotGamma tools highlighted the potential for further expansion, indicating that a move higher could trigger increased volatility. As traders aggressively bought calls and sold puts, market makers were forced to buy stock – fueling a breakout above key SpotGamma levels.
This alignment between a major news catalyst, negative gamma structure, and real-time flow created a high-conviction intraday long setup, resulting in a 10:1 reward-to-risk trade as HIMS surged from support into resistance.
Author: Doug Pless
Professional Trader & SpotGamma Content Contributor
| The Setup | The Tools | The Execution | The Payoff |
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Stock: Hims & Hers Health (HIMS) Trade Type: Intraday long using stock shares Bias: Bullish continuation after news-driven rally Volatility: Negative gamma environment signaling potential for acceleration Thesis: A move higher toward the $32 high-volatility point could accelerate as gamma becomes more negative, with options flow driving continued upside momentum. |
Compass • Positioned on the left side of the chart → upside potential • Neutral IV conditions (no strong premium edge) Equity Hub + Gamma Levels • Put Wall: $24 • Call Wall / Key Gamma Strike: $25 • High Volatility Point: $32 • Negative gamma below key levels → potential for expansion Put/Call Impact Chart • Showed negative gamma positioning • Indicated increasing volatility on upside move HIRO • Strong bullish flow: – Traders buying calls – Traders selling puts • Market makers forced to buy stock → fuel for upside move |
Entry: $23.74 on pullback near 9:40 AM (just below $24 put wall) Trigger: Call buying + put selling in negative gamma environment Breakout: Cleared $25 call wall / key gamma strike around 10:00 AM Trade Management: • Held through consolidation below resistance • Rode momentum as flow remained bullish Exit: $26.85 as flow exhausted (~11:15 AM) |
Reward/Risk Ratio: ~10:1 Risk: ~$0.30 stop below entry Move Captured: ~$3+ upside move Result: High-conviction momentum trade driven by flow + gamma structure Exit Signal: Call buying and put selling faded → momentum exhausted |
- Negative gamma set the stage for acceleration, amplifying the upside move once price started trending higher.
- HIRO confirmed strong bullish flow early, with sustained call buying and put selling driving momentum.
- The breakout above the $25 Key Gamma Strike / Call Wall triggered expansion, turning structure into a directional move.
- Flow exhaustion marked the exit, delivering a clean 10:1 trade from entry to peak.
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